Applied Economy

Last week the U. S. people were witnessing and undergoing an experiment in applied Economy. The Congressmen who initiated it having gone home to their guinea pigs, the officials who had to direct it from Washington went sadly but not silently to work.

"PWA simply has no funds to administer any program beyond next June 30," said Federal Works Administrator John M. Carmody, explaining why he must fire half his staff of 10/417 by January i, wind up all PWA public housing, power and similar projects by the end of fiscal 1940.

Works Projects' Commissioner Francis C. ("Pink") Harrington, with a reduced appropriation ($1,477,000,000) pared his rolls from 2,200,000 as of last week toward 1,800,000 by mid-September. By September i he must discharge 650,000 (one in three) WPAsters who have been on the rolls 18 months or longer. Off "on furlough" must go 56,500 of Ohio's 166,700; 62,200 of Pennsylvania's 153,000; 22,900 of New Jersey's 67,900; 22,400 of California's 89,800; 11,200 of Alabama's 42,100; 400 of smallest Nevada's 1,600. About half will be replaced with other applicants. If the record of previously discharged WPAsters holds good, only 15% of the 650,000 will find private jobs; those who do will average $2.98 per week. The rest must crowd onto overloaded local home relief rolls.

In further obedience to Congress, "Pink" Harrington last week: 1) warned subordinate officials to shun local, State and national politics, on pain of dismissal; 2) reduced the differences between WPA wages in the South and other regions. He increased the minimum pay for common labor in the South from $19 per month to $31.20 in rural areas, the maximum in cities from $35 to $50.70, meantime readjusting rates elsewhere to hike the national average from $53 to $55.50. Even this beneficence had a shock effect on the South where WPA pay already was sufficiently above private pay (for farm hands, domestics, etc.) to make labor hard to please.

Relief Rolls into Payrolls? Last week Manhattan's Republican Congressman Bruce Barton, who as a good advertising man would never try to put Business on the spot, said in Rochester: ". . . The [New Deal] heresies are being swept away; the threats [to Business] are one by one being dispelled; the responsibility now comes directly to industry. Its leaders mast banish unemployment from America . . . put men and women back to work. This is their challenge and their opportunity. . . ." The one sign vouchsafed up to last week's end indicated that Business will do very little until Congress has done much more. Said National Association of Manufacturers' President Howard Coonley: "Considerable overemphasis is placed on the claim that Congress 'has accepted industry's challenge' and that responsibility for complete recovery has now been shifted to Business. . . . Substantial and sound recovery depends on further positive action by Congress." . . . But he did add: "I know it is not necessary to urge that all members of the N. A. M. examine carefully their present and near-future production demands. . . . Industry must do its utmost, within the limitations of permissible volume of production, to translate relief rolls into payrolls."

In search of positive action from Business, Under-Secretary of the Treasury John Hanes hustled from Washington to Chicago, Philadelphia, Manhattan with a reminder to key industrialists that Congress had given them, tax reform, a small measure of Economy. Let them, said Mr. Hanes, now put money into new plants, increased production, expanded payrolls. What they said to John Hanes was not printed. Michigan's Republican Senator Arthur Vandenberg announced that further remedy lay in "private initiative and private investment and private enterprise under a solvent, sympathetic Government. . . ." Solvency and sympathy, he implied, are what Republicans offer in. 1940.

A. F. of L.'s Monthly Survey of Business meantime appeared with an explanation of Business inertia, a suggestion for Government action. Said A. F. of L.: "No national businessmen's organization . . . has within its power the means to get its members to expand production. . . . Increases in production have always depended on the personal judgment of individual businessmen. . . . If the Government were to take the initiative in calling forth the cooperative efforts of business, labor, farmers and other groups for a national increase in production and living standards, we cannot believe that the talent of our leaders would fail. . . . If this is not done . . . we see . . . further Federal spendings next year . . . danger of inflation . . . consequent losses to wage earners."

Deficit into Deficits. Nowhere was there assurance that dumped WPAsters could light anywhere save on their States, cities, counties. In other words, Congress in braking the Federal deficit, had enormously strained other governmental budgets. Stupendous was the sum of human distress. But the sum of political and fiscal trouble for States and cities is more likely to compel additional appropriations for WPA when Congress next meets.

Unique and fortunate was Maryland. Its total on WPA had been held to rock bottom (14,000), and the impact from a discarded fraction of that number was therefore slight. Governors elsewhere, Republican and Democrat alike, pored over their creaky budgets. Few found any solution except special legislative sessions to borrow more money.

P: Having almost no provision for nonFederal, direct Relief, the South did almost nothing. New Orleans had $4,000 to care for 8,700 ex-WPAsters; Atlanta, nothing for 6,000.

P: California's incredibly, impracticably pure State Relief Administrator Dewey Anderson resigned with a blast at Democratic Governor Culbert Levy Olson for turning SRA into a "political spoils system." Upped from personnel director to Acting Administrator was bland, chubby Walter Chambers, a wealthy Los Angeles businessman who understands politics. With scarcely enough money ($35,000,000) to care for 79,500 direct Reliefers until year's end, Olson & Chambers must find funds for 22,000 WPAsters. >For their riotous strike against WPA's new "security wage" in Minneapolis last month (TIME, July 24), a Federal Grand Jury last week indicted 70 WPAsters and strike leaders. In Manhattan, to the New York State convention of the A. F. of L., William Green scornfully quoted Franklin Roosevelt's "You cannot strike against the Government." He declared that the Federation will never recognize that principle, will continue to fight by strikes or otherwise for the prevailing (union) wage rate on WPA.

P: Typical of Republican economizers embarrassed by Federal economy was Pennsylvania's Arthur Horace James. Governor James last week had summoned his Republican legislature back to Harrisburg to vote more money, appraise the workings of their famed "No Work, No Dole" plan. More to appease taxpayers than to meet a sudden emergency, James & Co. last June arranged to require that any able-bodied citizen on direct Relief must take any job offered by a State, city or county agency or by non-profit charities (hospitals, etc.). The conscripted Reliefer must work, earn his keep at hourly rates determined by local employers. If he refuses, off Relief he goes.

Organized WPAsters and Democrats denounced this as a Republican "work-or-starve" club to hammer down private wages. In a Gallup poll, 84% of Pennsylvanians and 81% of citizens outside the State endorsed it. By last week, only 100 forced labor projects had been approved, taking from direct Relief 5,200 of Pennsylvania's 175,000 unemployed.

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