One Month; One Code

President Roosevelt last week gave up his Sunday evening to U. S. industry. Pen in hand he approved the cotton textile code, first of its kind under the National Industrial Recovery Act. Because a code cannot take effect until the second Monday after the President's approval, by signing Sunday night Mr. Roosevelt saved a week. The cotton code now goes into effect July 17. The interval is set aside to give the 23% of the industry which did not subscribe to the code time to agree to its provisions, or be forced in by the Government's licensing power.

The President exclaimed with pride: "Child labor in this industry is here abolished. After years of fruitless effort and discussion this ancient atrocity went out in a day."

So great was the President's haste to put the code into operation that he did not wait for all its rough points to be smoothed out. Still to be settled, for instance, was the tough question of "stretch outs," the practice of making one mill worker tend a larger number of looms as an offset to higher pay. But President Roosevelt could & would not tarry on details because: 1) cotton mills have lately been boosting production to finish as much goods as possible at cheap rates before their costs go up; 2) on July 17 it will be 31 days since the Recovery Administration began to function; 3) big industries were beginning to lag in submitting their codes to Washington for approval.

Having stultified the efforts of the World Economic Conference by putting his domestic recovery program ahead of stabilization of currencies, President Roosevelt was under heavy obligation to produce results at home. Well over 500 trade codes were reported in the making. Milliners, sugar men, baby-carriage dealers, jewelers, druggists, furniture retailers, lumbermen, clothing-makers, printers, milk evaporators, cleaners & dyers, waste-material dealers, paper men, silk manufacturers, farm-implement makers, scrap-iron men, tent makers, rabbit furriers, undertakers, oilmen, pretzel bakers & benders, underwear men, restaurateurs, coal men, steel men--all were in the throes of codification.

Recovery Administrator Johnson was laboring to bring coal men to agreement.

The general's helper, Dudley Gates, labored to aid lumbermen with their code, got them to include in it Roosevelt's pet, forest conservation. Helper Earl Dean Howard labored with the badly disorganized clothing industry (which was favored last week by a strike of the Amalgamated Clothing Workers) until he was felled by an acute heart attack. Helper Donald R. Richberg, counsel of the Recovery Administration, was busy stimulating merchants in Manhattan with dire prophecies: "If this adventure should fail . . . it will be the failure of an industrial system. . . . There is only the choice presented between private and public election of the directors of industry. . . . If they fumble their great opportunity, they may suddenly find it gone forever."

For more help General Johnson turned last week to Edward Reilly Stettinius. In this choice the influence of Bernard Baruch, master mind of the Recovery Administration, was again apparent, for Edward Stettinius Sr., Morgan partner who died in 1925, was one of Mr. Baruch's associates in handling Wartime industry. Son Stettinius. only 32, graduate of the University of Virginia, a vice president of General Motors, was given the job of stimulating the tycoon members of the Industrial Advisory Board appointed by Secretary of Commerce Roper (TIME, June 26) to throw their influence effectively behind General Johnson's efforts.

But with all these efforts the Recovery program had not picked up the momentum the White House had anticipated. In its first month only one trade code had been approved. Some 50 other codes, mostly of minor industries, had been submitted, none of them yet heard. The big industries, coal, steel, oil, lumber, clothing, etc. were all working on codes but none was yet ready. Allowing time for hearings, squabbles, compromises and Presidential approval, the prospect of putting them in force in less than two months was dwindling.

General Johnson well appreciated that it was no half-an-hour job for a great industry to draft a constitution for itself, but he could not overlook that some industries were making fine profits now and might be in no hurry to raise their labor costs by adopting codes. With this in mind, Attorney General Cummings gave General Johnson a hand by calling industry's attention to the fact that the anti-trust laws are not suspended except for industries which had adopted trade codes approved by the President. General Johnson and the President wanted haste, wanted pressure put upon industry.

"I have not seen anyone that I can conscientiously say is holding back,"* admitted the Recovery Administrator. "But I know that people who are just two jumps ahead of the bear are a whole lot quicker than when the bear falls back."

Besides using Edward Stettinius as liaison man with the tycoons, and Attorney General Cummings as a bear to chase industries from behind, General Johnson engaged Charles F. Horner of Kansas City to work up enthusiasm for co-operation with the Recovery Administration. During the War Mr. Horner helped organize the "Four-Minute" men for selling Liberty Bonds. Like his old, his new job is to select a Recovery Act symbol for display in store windows and on factory chimneys, to make propaganda for public support.

Not without cause did the Administration resort to threats and propaganda. Last week General Johnson candidly told newshawks: "I would say from the appearance of their production that there must be a lot of speculative buying of cotton cloth and it gives me some concern because they may be piling up unmanageable surpluses. Later on there might be so much cotton cloth in existence that there would be no employment for labor. . . . If we get too far ahead of our purchasing power, it will mean a new collapse. . . . The figures indicate that we must do something about it. We may have a new collapse. I shudder to think what would happen in this country if we had another." The President and many another knew the dire truth of his words, felt that the bear of Depression was just two jumps behind the Recovery Program. "Charts prepared for Mr. Roosevelt by the Department of Labor and the Federal Reserve Board showed that industrial production is increasing much faster than pay rolls, exactly as it did in 1928 and 1929. Dozens of industries have stepped up production. Cotton shipments have tripled though it is far from likely that the public is consuming three times more cotton than last spring. Steel mills are working nearly four times as fast as last spring.* although steel's two best customers, railroad and building, have not resumed expansion. Inevitable inference is that stocks of such commodities are being laid in against higher prices, with a good chance that when prices do go up buying will stop. Last week the American Federation of Labor estimated that from March to May Industry had boosted production 35.6%, workers' incomes only 7%.

Favorable factors were, however, increased purchases of automobiles and a short wheat crop. When the Federal building program gets under way it also will distribute purchasing power. Meantime, with consumption lagging, much of the public's available cash was being used to speculate in stocks and in commodities just as in 1929. The value of stocks on the New York Stock Exchange last week had more than doubled since the low point in March. Business looked up, but the parallel with 1929 hung over the economic scene like a black cloud.

Knowing these things, General Johnson was all eagerness to get industries to agree to codes for shorter hours, higher wages before a slump sets in. Industries, glad though they were to cooperate in principle, disliked agreeing to hours as short or pay as high as the Administration wanted--especially if buying may drop off when prices rise. Last week General Johnson was grooming his staff to hold hearings for as many as ten industries simultaneously to get a maximum of action when wrangling over trade codes actually begins.

*Three weeks ago when General Johnson said over the telephone, "I've been listening to that line of bunk from you fellows long enough. You'd better change your tune," he was not speaking, as TIME reported, to Roy D. Chapin. Who was at the other end of the line remains unknown. Ex-Secretary of Commerce and Board Chairman of Hudson Motor Car Co., Mr. Chapin would be cooperative. * Despite increased production, U. S. Steel's backlog of unfilled orders swelled 176,000 tons during June.

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