THE New Zealand Herald AND DAILY SOUTHERN CROSS WEDNESDAY, MARCH 7, 1934 GROOMING THE BLUE EAGLE

New Zealand Herald, Volume LXXI, Issue 21743, 7 March 1934, Page 8

THE New Zealand Herald AND DAILY SOUTHERN CROSS WEDNESDAY, MARCH 7, 1934 GROOMING THE BLUE EAGLE

At the end of a year of experiment, the National Industrial Recovery

Act produced by the Roosevelt Administration is under examination at Washington. In the course of a threediiysi' review it is to give an account oil itself; or, rather, those responsible for its working are to review their endeavours to make it a success. What amount of freedom they will have for pooling and comparing their experiences is not clear: three days will scarcely suffice for this among several thousand authorities. So lirge an assembly suggests an inspirational purpose, not a critical one. • A few; days ago there was an expectation that the critics of the scheme were to be invited to the Capitol on the anniversary of the New Deal, to express their minds and get their convincing or devastating answer, but quite other use is being made of the date; the President has given an address proclaiming the necessity for the. legislation, announcing further use of it, asking Jfor closer co-operation and ridiculing the idea that it means dictatorship, and he has been followed by General Johnson, his Blue Eagle generalmanager, who has made a tentative proposal for a reduction of working jhouis by 10 per cent coupled with an increase of 10 per cent in wapes. j Together, they have seemingly done their best to exhilarate those en-!

trussed with the task of arousing support in the various industrial

'"codes" and to make a popular appeal for enthusiasm throughout file United States. Apparently, such efforts have been needed to reinvigorate the scheme. Lately it was circumstantially reported that the Recovery Act, which is the centre and soul of the scheme, had lost its attractiveness, that public interest had languished, that the Blue Eagles proudly posted in shop windows six months ago had become faded and half-forgotten. The proceedings at Washington now confirm so discouraging a report. Throughout the campaign open admissions have been inadii that President Roosevelt was proceeding by a "trial and error" method. No theoretical objection can be raised on this account, for so colossal and venturesome a scheme could not be expected to proceed 'irithout modification, but the official admission wan in sharp contrast to the tone of confidence in a complete remedy with which it- was inaugurated. A psychological sound-1 liess was in the initiating announce- j ment;, yet another of the kind can j hardly have equal rallying effect after a year of mingled success and failure.

The scheme has not emerged from | the experimental stage. Its opponemits say that it has—to be con- [ demned as futile and bound to re- | act badly. This view is doubtless exf travagant: an immediate purpose Iwas1 was iserved, mainly in the removal of I a prevalent despair and also in some improvement in actual conditions. It sihould be obvious, however, that there are limits to the psychological effect of a spectacular programme and that ultimately, unless the programme be markedly and continuously successful, the effect must be prejudicial The economic life of the United States needed a stimulant, but a sober diet will be sooner or later essential.. Millions and millions of unemployed were to be given permanent work, according to General Johnson's - flamboyant speeches as he. toured the country, and he has claimed that between 4,000,000 and 5,000,000 have been absorbed in industry : the official figures of the Secretary of Labour put the number at barely 2,000,000. By the raising of wages, it was intimated at the beginning, there would be a grear, increase in purchasing power: instead, there has been a corresponding increase in retail prices, so that the cost of living has gone up and the increased wages cannot buy more goods to any appreciable extent. On the heels of this experience, the outcome: of as arbitrary an attempt to "manage" domestic conditions as the world has seen, it seems utterly reckless to proceed with a further programme of increased wages and shorter hours. In the speeches of the President and the administrator of the Recovery Act is a common note of misgiving, in spite of their bold front. Mr. Roosevelt pleads rather than directs, and talks of safeguards against evil results ; General Johnson's proposals of 10 per cent on wages and 10 per cent off hours is put forward only tentatively. Twelve months of experiment have been far from reassuring, and the new effort to rally confidence is dogged by dispiriting facts. . Few details are available at this distance for precise judgment and only general impressions can be gathered. Indeed, a feature- of the National Recovery scheme has been its own procedure by generalities in public statement rather than by publication of partieidars. But it is becoming increasingly evident that the measures adopted, meant as purely domestic expedients, can only with great difficulty achieve anything of permanent value, within the bounds of the United States, so long as t'ley are pursued regardless of

foreign trade conditions. It any country in the world can justifiably act as self-contained!, and hope to pull itself up by its own bootlaces, thafc country is the United States; but there is no such country in these times. Mr. Roosevelt is realising this, as he is asking Congress for newpowers in the makine of foreign trade agreements. The national policy has been to discourage imports, to maintain an excessivefy f'avQurabfe balance of trade, with the result that foreigners' paper debts to the United States have continued to mount in volume. In endeavours to restore prosperity to the farmer, dependent on his exports, there ought not to be forgotten the truth that exports can only be paid for by imports: and imports, necessarily manufactures in the mam, mean to some extent competition with .American industries. At this point the projects of the National Industrial Recovery Act are touched by considerations of international trade, and a purely domestic handling of prices and currency becomes eventually impracticable. Sooner or later a revision of policy, including what is now being attempted for domestic purposes, must be accepted as inevitable.