$3,019,000,000

The Bank for International Settlements in Basle, Switzerland has lost most of its large customers. Nations have about quit settling with one another, financially. But the bank does a lot of observing and thinking, and last week the most newsworthy observation of its annual report was a carefully documented conclusion that government spending cannot cure Depression. The bank's president, Johan Willem Beyen of The Netherlands, used the U. S. as a prime example of that policy's failure. Main thesis of the report, however, was not so much that U. S. spending since 1933 had been misguided ("natural forces of recovery were partly strengthened and partly hampered by the action of the Government") as that current Depression in the U. S., as a failure of purely national planning, serves to emphasize the need of greater international economic coordination. Excerpt:

"The interdependence of modern countries is so great that though economic nationalism and freedom to change monetary parities may allow them to walk out of step ... it does not make them free to move independently of each other. . . .

Experience rather proves that the chief effect of this walking out of step is greater disorder in the general economic development of the world and a psychosis in which the feeling of living in depression never leaves the world because it always is justified in one country or another."

Plenty of people like Senator Byrd. House Minority Leader Snell and a whole slew of ladies from New York, New Jersey and Connecticut who descended on Washington last week are convinced that any further so-called pump-priming will be money down the drain. But that Government spending from 1933 helped bring the U. S. at least a temporary recovery few qualified observers deny. Main objection to resumption of spending has been that the Recovery apparently lasts only so long as the spending and the Government cannot spend forever. To a press conference last week. Franklin Roosevelt gave his rebuttal to this argument. According to the President, previous spending programs had not "failed" but had rather been impeded by faulty business and economic methods. This time, said the President, means would be found to prevent unabsorbed inventories and unjustifiably high prices from, in effect, "running away with the ball." To find means to prevent such a mishap was the prime purpose of the antimonopoly investigation he had already recommended for Congressional consideration.

Meantime, appropriation of $3,019,000,000 of the President's $5,000,000,000 spending program went through the House like a breeze. The $3,019,000,000 is relief money: mainly $1,250,000,000 for WPA, $965,000,000 for PWA (plus a $500,000,000 revolving fund to be used for loans to States & cities), $175,000,000 to the Farm Security Administration. As such it represented the rest of the program proposed by Franklin Roosevelt a month ago, except for the $300,000,000 for slum clearance.

There does not seem to be much doubt that if U. S. relief were handled locally it could be done cheaper. The State Auditor of Ohio informed the President last week that 20% of the States relief expenditures were attributable to chiselers. He wanted a WPA appropriation to find them and kick them off.

When the relief appropriation measures came before the House last week, therefore, proposal to turn relief administration over to bi-partisan State boards came in the form of an amendment offered by Long Island's socialite Congressman Robert L. Bacon. As a minority member of the 39-man Appropriations Committee, Mr. Bacon also endorsed a Republican five-year plan--calling not only for non-political relief administration but for tax-revision, cooperation with Business, elimination of Government waste. The five-year plan lasted barely long enough to remove from his party the stigma of criticizing the Administration's program without offering an alternative. When his amendment had been turned down, the House was ready to pass the bill.. This it did, without major amendment, 329-to-70. Observers surmised that neither house of Congress, having got a taste for relief pork five years ago, was prepared to go on a self-imposed diet.

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