COMPLEX PROBLEMS

Hawke's Bay Tribune, Volume XXIII, Issue 71, 6 March 1933, Page 8

COMPLEX PROBLEMS

FACING MR. ROOSEVELT FOREIGN POLICY PRESENTS KNOTTY PHASES. WAR DEBTS AND ECONOMIC CONFERENCE. Washington, March 3. With the administration of the oath of office, Mr Roosevelt has faith, born of hope, reposed in him, perhaps in a greater degree than accorded any previous President, but with a path impeded by greater and more complex problems than the nation has known since its foundation. The President apparently has the confidence of the people in an unbounded measure, yet the greatest psychological obstacle he must overcome in his national constituency is their apparent loss of confidence in their own country and something of the dramatically extraordinary is expected, and indeed demanded, of the new Government.

The nation seems to have suffered a shock, particularly within the recent few weeks—namely, the almost complete disappearance of the one-time sense of certainty in the stability of its material and economic order —from which it is difficult to pull itself out without the aid of stimulating leadership. There is a demand for a virtual economic dictatorship for President Roosevelt, but behind the need of novel and unexpected methods or t, miracle to restore the nerve of the 'ljaople there must linger for the obserAr the more certain conclusion that it will take many years of the soundest and most careful administration and legislation, plus persistent and prudent private, industrial and financial effort, to renew that efficient functioning of America’s economic machine which is known as prosperity.

Mr Roosevelt and the country face exceptionally acute and disheartening problems. The foreign policy presents such knotty phases as the necessary readjustment of international economic affairs wherein the American attitude to war debts, international tariffs and other trade prohibitions and inhibitions is of the utmost consequence. It is difficult to learn what Mr Roosevelt plans for the impending World Economic Conference. WAR DEBT DISCUSSIONS. It now seems to be indicated that the hope of an early conference with the British officials on war debts, whereon negotiations with other nations apparently depend, has vanished. The plans which included expectations of the opening of the British-American conference at Washington the day after the inauguration have again become nebulous now. “The New York Times’ ” chief correspondent here declares that representatives of the new administration are not pessimistic of the outcome of the Anglo-American discussion, “but frankly they do not know when progress will be made.” The reason for the sudden hitch is not made clear.

Three other items closely related in the foreign policy are Far Eastern affairs, Russia and disarmament. American recognition of Russia is now expected. It is believed that the American attitude to the Japanese in Manchuria and to further reduction of naval armaments may be modified one way or the other, depending on the outcome of such recognition.

An immediate crisis not permitting further delay, even of hours, is the keynote of internal affairs. Mr Roosevelt has been conferring since late on Thursday with his own advisers and the experts of the outgoing administration on pressing domestic problems, the most immediate being banking conditions. Apart from a reported Emergency Executive Act he is said to have in readiness should events turn for the worse, ho is faced with certain drastic necessities of a long-time financial policy. WILD DEFLATION. It is for instance confidently believed that ho will not allow the present progressive deflation to continue to run wild. It is considered that beyond possibly a technical and limited increase in the note issue he will oppose any of the numberless proposed inflationary measures with which he is deluged. Some quarters hold that remonetisation of silver will be authorised, and there will be encouraged the private readjustments of domestic debts under some law for a provisional debt moratorium under the concept that prices of goods cannot permit the payment of debts created when prices were much higher. There must also be “bold and intelligent reform of the banking system,’’ with the elimination of speculative features from the. present bank operations. Concerning the Federal finances, Mr Roosevelt is known to seek a 25 per cent, reduction of war veterans’ relief, an immediate 200,000,000-dollar cut in Governmental administrative expenditures and stringent departmental reorganisations, with a winding-up of the affairs of some of the most expensive commissionary activities of the previous Administration, chiefly the Farm Board, whose losses possibly exceed 500,000,000 dollars. These steps are essential to meet the mounting de-

licit, which is expected to reach 200,000,000 dollars by the end of the financial year. IMMEDIATE AID. Immediate Federal aid must, how ever, be provided for the private financial structure of the country; for the farmers, burdened with top-heavy mortgages and low- prices of commodities, for hunger and unemployment relief and for the cities and States, for the maintaining of schools and other essential services, which are threatened by drastically diminished incomes, and for railways, which in many cases are bankrupt or on the verge of bankruptcy. Finally, some Government support for the restoration of the present 45 per cent, drop in domestic trade must be planned. It seems obvious from the foregoing that President Roosevelt—the "Constitutional Liberal,” as ho is dubbed by friends— will be compelled to intensify the trend towards “State socialism” in America. These friends claim, however, that the policies ultimately adopted will not merely be original and dictated by a. partial economic philosophy, but will be a healthful compromise between conflicting views and essential expedient actions, and that the country will be well served at his hands.