Balanced Thinking

In 32 speeches on his "intake" Western tour, Franklin Roosevelt discovered two subjects that were sure-fire with all audiences. One was Peace. The other was balancing the budget. First thing the President did on his return was to reshape U. S. foreign policy. Last week he turned his attention to the budget.

Basic theory of New Deal economy has been that the Federal Government should spend in lean years, save in fat ones. Last week, while many another U. S. citizen had begun to wonder whether the country was on the verge of a major business slump, the President made it clear by his saving intentions that he finally felt that the lean years were over. The week began with a new budget estimate showing a net deficit of $695,000,000 for fiscal 1938, $277,000,000 more than had been estimated last April (see p. 19). During the rest of the week Franklin Roosevelt emphasized & re-emphasized two points: 1) that he does not expect the deficit to grow any larger, and 2) that he expects the Federal Government to take in as much as it spends in the fiscal year ending with June 1939.

Having announced that PWA and RFC would make no further commitments, he was visited by Indiana's New Deal Senator, Sherman Minton. Mr. Minton left the White House, telling reporters ruefully: "I asked for a hell of a lot of PWA money and didn't get a dime."

In opening a nation-wide drive for Community Chest funds, he announced that the Government "must more and more narrow the circle of its relief activities." warned relief agencies that "unless Federal taxes are to be greatly increased, the expenditures have to be brought within the existing tax receipts."

In duplicate letters to South Carolina's Ellison D. Smith and Texas' Marvin Jones. Chairmen of the Senate and House Agriculture Committees, he hammered home the point that "any new legislation should not unbalance the expected balancing of the budget . . ." and that any new Treasury obligation should be "backed 100% by additional receipts from new taxes."

At the first of his bi-weekly press conferences, he blamed the increased 1937-38 deficit on Congressional appropriations, said he expected next year's budget balance to be achieved without new or increased taxes. At his second press conference, he repeated "for about the 200th time" that next year's budget would be balanced.

In a week thus devoted to money talk, not the least remarkable fact about Franklin Roosevelt's preoccupation was that it included no mention at all of the one money matter which a big part of the U. S. had most upon its mind: the strange behavior of the New York Stock Exchange whose graph, by week's end, looked like a ski-jump. That Franklin Roosevelt's emphasis on governmental economy was intended to give indirect reassurance to U. S. industry in general was one theory voiced by economic theorists. That it had had exactly the opposite effect was the theory ingeniously advanced by the New York Post, whose publisher, David Stern, is usually one of the New Deal's staunchest supporters. The Post put the Roosevelt remarks on curtailment of Federal relief and budget balancing parallel to a column of similar remarks by Herbert Hoover in 1932, deplored a deficit of "only $695,000,000," blamed the stockmarket crash on Federal economy, urged the President to "go back to the New Deal."

P: Dedicating the Federal Reserve Board's new $3,500,000 building on Constitution Avenue, the President hinted vaguely at forthcoming changes in the nation's banking system "to promote the most productive utilization of our human and material resources . . . [and prevent] the disastrous extremes of booms and depressions." On the platform behind the President sat Virginia's Senator Carter Glass, who helped both to found the Federal Reserve Board and to defeat Franklin Roosevelt's Court Plan. Gracefully the President paid tribute to "the courageous leadership . . . for which the senior Senator from Virginia . . . will always deserve the nation's gratitude."

P: After a Hyde Park chat with Ambassador-at-Large Norman Davis, who sailed next day to represent the U. S. at the Nine-Power Treaty conference in Brussels, the President announced that "Mr. Davis, of course, will enter the conference without any commitments on the part of this Government to other Governments."

P: Last January Franklin Roosevelt asked Congress for a bill to reorganize the executive branch of the Government and give him "six personal assistants," all to be equipped with fabulous efficiency and a "passion for anonymity." In the absence of such a law, he last week took the first step toward lightening the superhuman burden of Presidential chaos by appointing "my little son, Jimmy" to a new White House job. Not previously celebrated for his passion for anonymity, 29-year-old James Roosevelt has been one of his father's secretaries since January. His new duty is to act as liaison officer between his father and the heads of the 18 biggest independent and emergency Governmental agencies, including the Federal Reserve Board, U. S. Maritime Commission, Federal Power Commission, National Labor Relations Board, AAA, and CCC. As explained by Son Jimmy, his routine will be to devote two days a week to conferences with agency heads who can then arrange conferences with his father if necessary. Wrote Columnist Hugh Johnson:

"Jimmie Roosevelt was the only possible solution of a problem that simply had to be solved. He has nearly everything the system requires--love and loyalty to his father and the latter's complete confidence --naturally. These are all indispensable, and he has others, tact, modesty, respect for elders and superiors and his share of ability. But, above all, there was this--what prima donna can be jealous of the closeness of relation between a man and his own son?"

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