Talk

"The Federal Government can pull the country out of Depression by spending and can drop the country in again by economizing. We had to prove that by experiment because hardly anybody believed it in 1933. Now that this relationship is proved by experience, many people still can't believe it. . . ."

This breezy solution of an economic riddle which has puzzled the world's ablest savants for the last decade was proffered last week in Middletown, Ohio by 30-year-old James Roosevelt. If several of the Assistant President's statements seemed a trifle brash, the last at least was indisputable. So many people still could not believe that young Mr. Roosevelt's father's current $5,000,000,000 pump-priming program would promptly end the current Depression that, even though Son Roosevelt's arguments were being stated less ingenuously by James A. Farley, Henry A. Wallace, et al., the program last week had not proceeded much beyond the talking stage. While economists, political pundits, politicians, columnists, editorial writers and even members of the President's own circle of advisers vied with each other over the vital point of whether Government spending was 1) the best cure for or 2) a chief cause of Recession, practical developments in the pump-priming campaign were as follows:

1) Appropriation by Congress of $51,500,000 carefully earmarked for the CCC as a start on the President's request for $1,500,000,000.

2) Announcement by the U. S. Treasury that it would immediately but gradually begin to implement desterilization of gold by redeeming maturing Treasury bills at the rate of $50,000,000 a week.

3) Announcement by its chairman, Jesse Jones, that the RFC was ready to loan funds to utilities, underwriters and businessmen on their inventories (see p. 53). Meanwhile, what U. S. Business was inclined to consider the most helpful move of the week was not the Administration's effort to pour water into the well but a Congressional effort to give thirsty Capital a drink from its own spring--by modifying taxes (see below).

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