Truman’s Second "New Deal" Likely To Arouse One Of Most Bitter Political Controversies

Wanganui Chronicle, 7 January 1949, Page 5

Truman’s Second "New Deal" Likely To Arouse One Of Most Bitter Political Controversies

WASHINGTON, Jan. 6 (Rec. 6 pm).—“The second New Deal” which President Truman has submitted to Congress is expected to arouse one of the most widespread and bitter controversies in American political history, says Reuter.

The predominantly Conservative American press complains that even when faced by a threatened collapse of the capitalist system in the depression, President Roosevelt never went as far as Truman plans to do. Truman does not go so far as to propose nationalisation of any industry, but he does warn that if private industry cannot produce scarce materials, the Government may have to construct facilities for their production. Prices of most stocks rose on the New York stock market after President Truman's message. Gains ranged from a few cents to over a dollar. The Associated Press says leaders of business, industry, and finance examined Truman’s words, but found nothing more than had been widely predicted. There was some comfort for them in his omission of mention of an excess profits tax. Even his request for authority to control commodity speculation had little effect on the market, as the move had been anticipated. Democrats generally have hailed President Truman’s message an fulfilling to the letter his campaign pledges, but greeted the proposal for 4,000,000,000 dollars new taxes with marked coolness. Democratic leaders conceded that some tax increases would be necessary if the Administration were to make good on a vast social economic programme promised, and still balance the Budget, but they found the tax plans difficult to swallow. Southern Democrats' reaction was surprisingly mild. This is interpreted as a sign that many of them are prepared to fall into line with election returns, despite their opposition tc most of the President’s civil rights programme. .Republican reaction ranged from pledges to support some of the President’s recommendations, to denunciations of his whole programme as e blueprint for a Socialist State.

Senator Robert Taft, of Ohio, chainman of the Senate Republican Policy Committee, declared that the President's programme would impose such a heavy burden of taxation that it would bs increasing!, ditficull foi private enterprise to survive at all. Mr. William Green, president of the American Federation of Labour, and Mr. Philip Murray, President of the Congress of Industrial Organisations, and leaders of independent unions, gave ready approval to Mr. Truman’s call for a repeal of the Taft-Hartley Act and restoration of the Wagner Act. Mr. Murray said he was sure both labour and management, meeting within the spirit and framework of the President's message, could reach substantial agreement once the Wagner Act was restored, on any problems that might arise. Mr. Murray said he regarded Mr. Truman's statement on labour as in the best traditions of American Liberalism Mr. Green said ths Zonericun Federation of Labour would be glad to co-operate in such a constructive programme.

“After the Taft-Hartley Act is repealed and the Wagner Act restored, we will be more than willing to give sympathetic consideration to the suggested amendments to the Wagner Act to strengthen the processes of collective bargaining and to promote a higher degree of labour and management peace. We also are highlyencouraged by other recommendations dealing with housing, increased minimum wage, promotion of civil rights and the rebuilding of the Department of Labour.”

“DESIRABLE, BUT RAG-BAG.” The New York “Herald-Tribune,” in a leader, says: “Truman's proposals are, for the most part, desirable, but they do not add up to consistent economic or social strategy in terms either of planned economy or of enterprise system. Moderate as it is in tone, and at least superficially coordinated, it still is a rag-bag message, in the Truman tradition.” The “Tribune” says the proposals are not clear or even consistent until supported by the Budget message and economic report. “The President

seems to be going three ways at once,” says the “Tribune." One way he is interested in inflation control, but going in another direction at the same time he is interested in a social service State, whose measures essentially are inflationary, however socially desirable. "In the third direction the President seeks to balance the inflationary demand by increasing production, and he proposes an increase in steel capacity and development of water •resources. The difficulty is that such stepping up of investments as against consumption is inflationary in the early years, when plants are being built and the new capacity may begin to produce only when demand has to recede.” The New York "Times," in a leader, applauds the tone and temper in which the President discussed such contentious economic issues as taxes and price controls. The “Times” says: “He foresees the danger of the Government operating ‘in the red,’ and he, therefore, asks Congress for new taxes to bring in an additional 4,000,000,000 in revenue, but he does not plump for excess profits tax, which many businessmen believe would cripple new capital investment. His whole recommendation is broad enough to leave the initiative to Congress.” PURPOSES AGREED WITHThe “Times" says it agrees with the purposes at which Mr. Truman is aiming, except the proposed repeal of the Taft-Hartley Labour Act, and the

support of farm prices which are in danger of outdistancing a reasonable objective orderly marketing . The “Times” says better housing, better health, better schools, broader social security and more areas reclaimed are all proper objectives o£ a democratic people, and the proper concern of a democratic Government in a modern age. The real question is how rapidly such reforms can be accomplished without breaking the back of the Government’s credit, and without burdening the economy of the country.”