NEW DEAL DIFFICULTIES

New Zealand Herald, Volume LXXV, Issue 23009, 9 April 1938, Page 14

NEW DEAL DIFFICULTIES

President Roosevelt is trying still another shift to disperse the dark clouds lowering over the American economy. He is now bringing forward a "business revitalisation programme" to cost 1,500,000,000 dollars. Previously hp desterilised gold reserves to broaden the basis of credit, although the essential element of confidence had been lacking to use the ample credit resources available without desterilising gold. As that did not serve, he next revived the Reconstruction Finance Corporation. Apparently the effect has been disappointing, since the latest move is to finance business revitalisation. The change in the American outlook from the boom conditions of a year ago is startling. In January last year,' at his second inauguration, Mr. Roosevelt was claiming that he had "ended by action, tireless and unafraid, the stagnation and despair" of 1933. Now, with, over 10,000,000 unemployed in the United States, stagnation and despair have fastened on the giant economy once more. So the President is again trying to "prime the pump" and at present is not succeeding. His failure offers a commentary on the policy of "buying prosperity," of "spending a way out of debt and depression," or of "increasing purchasing power." It may succeed for a time, this new deal, but the effect has proved to be temporary in both France and America. The weight of new taxes and new debt piled up in "increasing purchasing power" bears down industry sooner or later. Mr. Roosevelt and M. Blum put the cart before the horse, consumption before production, and are finding the prosperity created by such mjans to be brief and spurious.