The Timaru Herald WEDNESDAY, JANUARY 5, 1938 PRESIDENT’S CHALLENGE TO CAPITAL.

Timaru Herald, Volume CXLIII, Issue 20927, 5 January 1938, Page 6

The Timaru Herald WEDNESDAY, JANUARY 5, 1938 PRESIDENT’S CHALLENGE TO CAPITAL.

Faced with the likelihood of the eighth successive budget deficit, it is not surprising that President Roosevelt should be looking for a scapegoat upon which to impose the blame, not only for the country’s unbalanced budget, but for the growing gravity of the increasing recession in business. Manifestly the delivery of a message to the nation presented the President with the opportunity he sought to turn the eyes of the people away from the unsound budgetary position, to a class of American citizen upon whom the popular opinion would delight to see poured the most outspoken criticism. “All segments of the nation,” declares the President, “should co-operate in order to achieve a better economic balance.” Doubtless this is sound philosophy, but important interests in the United States are charging the President with creating conditions that make it too risky, if not impossible for capital to function in face of the implementation of the President’s programme. It is therefore of interest to note that the President in a message to the nation, said he would submit to Congress later, a comprehensive legislative programme for business reform: "Misuse of powers by capital of the selfish suspension of employment by capital must be ended Or the capitalistic system will destroy itself with its own abuses. The goal is an increase in the national Income to ninety or one hundred thousand million dollars annually.” Manifestly the President is seeking a scapegoat, because for some months leading business men in the United States have been saying that the “accomplishment of private enterprise in increasing employment depends more on what is done in Washington in the near future than on anything else.” The other day Mr Winthrop W. Aldrich, chairman of the board of the Chase National Bank, made these interesting observations in reply to political criticism: “Private enterprise goes forward only when the conditions are such that confidence exists in the possibility of conducting busi-

ness on a profitable basis.” “Business recession may be laid to important governmental policies, some of which already bear heavily on business and others of which undermine confidence in the future on the part of the investing public and the business community. Many governmental policies, moreover, create uncertainty and uncertainty is the one thing above all others that is most difficult for business to cope with.” All over the United States the question is being asked: “What is the President going to do to encourage business to counter the recession which is daily gaining momentum? “If the Treasury reaches its goal of a balanced budget,” declares the head of the Chase National Bank, “the cornerstone of the foundation of true business recovery will have been laid.” The President, on his part, suggests that the budget can be balanced by an increase in the national income to ninety to one hundred thousand million dollars annually. All the leading authorities in the United States have warned the Government of the United States of the danger of destroying the only vestige of confidence remaining, if further tax impositions are enacted. It is realised, of course, that if something approaching confiscatory taxation is imposed, in relation to profits from business, a commencement will be made in the slide into a fresh slump. On the other hand, Mr Aldrich suggests that easing of an almost unbearable load of taxation, and the drastic purging of governmental operations should be made, so that men would be encouraged to take profits, shift investments, set immobilised funds in motion, and once more take reasonable risks in putting millions of funds into fresh enterprises that are held up because of the nationwide loss of confidence.