Newspaper Page Text Denial of Aid to Business Political Factors Seen Too Strong to Permit Real Co-operation. By DAVID LAWRENCE. THERE are lots of people In America who would like to be lieve in President Roosevelt's program of “pump priming" if they could pet a persuasive explana tion of where it leads and how it Is ■upposed to function. They would ap proach it sympathetically if the ad David Lawrence. ministration could but outline exactly how the pump Is supposed to Bet primed. Obvieusly the objective is to stimulate private business by giv ing It a start through the use of public funds. This presupposes that at a certain time, after the pump .has been primed, business should be able to get along without the Government's money. But the managers of business have found certain impediments interposed by Government itself. They have cried out against these barriers for a long time, but Mr. Roosevelt stub bornly refuses to remove the barriers. He will not even let Congress pass a tax bill" to help business along. Un der such circumstances the pump priming procram must inevitably fail to get the wells of private business to function. Opinions will differ on this point, but in order to determine for one self what the probable trend will be, It is necessary to have a clear under standing of just what “pump prim ing" really Is. Perhaps the best, analysis was given by Dr. John H. Williams, professor of economics at Harvard University, in a speech he marie early last Novem ber, at a time when the business re cession had started, but when the second experiment with “pump prim lnz" had not. of course, been decided upon. So his remarks ran be con sidered as unprejudiced by the exist ence of any pending prneram and as devoted wholly to an explanation of the theory of “pump priming." Said Dr. Williams: rtecovpry ny means of public spend lng is supposed to have three phases. The first is the artual spending by the Government of such and such an amount. The second is the secondary spending of that amount. It is gen erally thought that, the multiplier is something between two and three. So that if the Government spends $1,000. 000.000 the total effect of that in money terms would be between $5 000,000.000 and $3,000,000 of na tional income. Effect on Investment. "And then comes, and this is the crux of the matter, what is called tertiary spending, the effect of the whole process on new investment. It Is thought that by increasing the con sumer incomes, handing out money and haying it spent and revolving through the system, business is en couraged to finance further capital facilities, in order to be able to pro duce enough and to get rpady to pro duce enough to satisfy this mounting Wave of demand. That is the tertiary stage. When people talk about prim ing the pump they are really talking about that. At that stage you reach j the end result, which is private in- ' vestment. "Then the thought is that as re- ; covery comes along you taper off your ■ public deficits from both ends; the need of spending is less, because ! private business is employing the 1 factors of production and providing j Income so that the Government need not do It. Relief and all such ex penditures should go down. On the other side, the tax revenue should in crease with the greater volume and profitableness of business. In this way the budget is balanced. Tertiary spending is then well under way, private investment ' is going along under its own steam and there is no further occasion for the Government ! to do anything. "Now’ that is the theory, and it has ! good many adi'ocates. I personally i believe it was never adopted in this : country on theoretical grounds, but that we found ourselves faced with a I condition and rationalized it a good deal, .and evolved out of it this then- j retical justification. I think it was a fact rather than a theory that, we were i acting upon. I myself think the i spending program has been justified in some measure. I want to qualify that j I think it was slow in starting and ' I think it has bpen slow’ in ending. I I think our timing has been poor, and owing to that fact the magnitude of the operation has been greater than it needed to he. A very large question j is whether you can operate this, kind i of policy successfully in a democratic state. I do not know the answer to that. We have not had enough ex perience.” R. F. C. Principle Preferred. Dr. Williams then pointed out that one part of the theory—lending through the R. F. C. for capital ex penditures—has worked out better than spending through the W. P. A. He declared that by 1935 the R. F. C. was showing an excess of repayment, whereas direct expenditure through such things as work relief did not get under way really until 1934 and expanded when recovery momentum was strongest. Declaring that the tearing has been late, he adds: "In my own view we should have ■tarted the transition to a balanced budget at least one year and possibly even two years ago, when the mo mentum of the recovery was strong. Surely last winter and spring, when we were worried about the excesses of a boom character, we should have been reducing our deficit. As it is. it has come now, and we are effecting the transition mainly in this fiscal year, If the present budgetary estimates materialize.” But since that speech was made the administration has reversed its policy and endeavored to correct its first blunder by more ‘‘pump priming.” The main reason the administration did not stop spending when Prof. Williams thought it should was that Mr. Roosevelt had to win the 1936 elections and he couldn't stop the W. P. A. or the other grants and sub files until he was past that hurdle. He tried it afterward in his budget outline in January. 1937, for the present fiscal year and then did it too suddenly, and now as the congressional elections of 1938 are at hand he finds It necessary to resume the spending The Capital Parade Wall Street Battles Over Stock Exchange Presidency. Robert Hutchins a Leading Candidate. By JOSEPH ALSOP and ROBERT KINTNER A VIOLENT struggle Is raging up and down Wall Btreet over the choice of the next president of the New York Stock Exchange. The plum Is worth fighting for; the handsome salary and autocratic powers granted the presidency under the exchange’s liberalised constitution make the job the best in the financial district. At the moment the four leading candidates are: Robert. Maynard Hutchins, youngish, brilliant and ambitious president of the University of Chicago. His intimate friendship with Chairman William O. Douglas of the Securities and Exchange Commission and the fame of his remarkable work as an educator are both atrongly In his favor. uen. rrariK i. Mines, wno nas served both Republicans and Dem I ocrats efficiently as chief of the Veterans' Bureau. His big point is his reputation as a non-partisan civil servant. Robert Moses, dynamic park commissioner of New York City, who has furbished the dingy face of megalopolis and shown himself to be the ablest servant of the pub lic now operating. T>UTi JoiT rut \ vJ©® re * / —= g Morris Tremaine, elderly, cautious controller of the State of New York, whom the conservatives like because many bond issues have ac quainted him with Wall Street's ways. * * * * The most remarkable inclusion on this list Is obviously that of Mr. Hutchins. On the face of the situation, the thought that Mr. Elutchins might desert, his present post for a purely commercial one, owever eminent, is a trifle difficult to swallow. But his enemies at the University of Chicago—and he has made many by his forward looking policies—are moving in'on him. He has been looking for a new plough to put his hand to for some time. And while he was at first cold to the stock exchange's proposals, he has shown himself seriously Interested in the idea In more recent conference* with leaders in exchange affairs. Of Gen. Hines, not murh more need be said except that he has the immensely Important backing of the now predominant exchange group led by Paul Shields and E. A. Pierce—the heads of the large commission houses who were the spearheads In exchange reorganization. Probably Gen. Hines would be almost as well looked on by the S. E. C. as Mr. Hutchins. Mr Moses and Mr. Tremaine would both be far less well received by the Washington authorities. While any one who takes the trouble to visit New York can see that Mr. Moses is one of the few men to whom American citizens have any real reason to be grateful, he is not loved by the New Deal. He onre ran for Governor on the Republican ticket. He even once called Secretary of the Interior Harold L. Ickes a few well-deserved names. He has a somewhat, pugnacious nature, and after so many months and years of bickering, the S. E. C longs for a little peace. As for Mr. Tremaine, his opposition to the S. E. C.’s Maloney bill, regulating over-the-counter dealing, has made him about as popular with the officials there as the stock exchange old guard. Moreover, the general belief that J. P Morgan «fe Co. has regularly advised him on the issuanre oi New iork state bonds causes him to be “suspect, thought to be in league.'* * * n* * Bumming up the chaneps of the four men, Mr. Hutchins can have the job if he will take it; Gen. Hines will probably get it, if Mr. Hutchins doesn't want, it; Mr. Moses’ chances are poor. since his backing is not strong; while Mr. Tremaine will win only if the stock exchange old guard, now in rout, can reform its ranks and put over a smart one. And, of course, there is the possibility that an entirely different man will be chosen. Tt_, yhp Npw Dpal SPPms to be determined to shower Senator Burton K Wheeler of Montana with the most elaborate tributes to his effectiveness po*y 11 r iv^eetee. y~ C'C Tfc/j/ • I' ip as an opponent. Recently the President gently resigned the Na tion's railroad system to impend ing chaos, apparently because he feared what Senator Wheeler might | say if he proposed a chaos-avert ing plan. And now the administra tion leadership has gone to the trouble of having the House of Representatives pass a complete bill to avert a Wheeler outburst in the Senate. The Glass hill expanding the lending powers of the R. F. C. escaped a Wheeler attack when it passed the Senate by a narrow margin. A special amendment, continuing a requirement of I. C. C. certification of solvency on all R. F. C. loans to railroads, was written into the measure to satisfy him. This amendment was omitted in the version of the bill first, passed by the House. Mr. Wheeler, always suspicious, promptly de cided that even the Senate's amendment had 'jokers in it.’ He swore to sail into the whole measure it it came out of conference. The administration leadership, shrewdly advised by Vice President P?.rn15r' 1w'hose crony- Jesse H Jones, was naturally interested in the Glass bill hastily introduced the original Senate bill in the House. This was vTn. i°n an<* *5asse<^ Intact. Thus, no conference was necessary, and Mr. Wheeler s tongue did not get its chance. (Copyright. IP,'?*, by the North American Newspaper Alliance. Inc,) lavishly and speedily so as to hold his majority in Congress, What is overlooked by many of the advocates of “pump priming” is that they are reasoning solely with eco nomic theory end then 'the best of :heir plans are broken down by the political minds who refuse to do logi cal things because it might hurt their nolitieal position. The conclusion reached by Prof. Williams is therefore worth quoting: “This theory ("pump priming") must at all times assume that there s to be a transition from public spending to private investment. Other wise at some point you get into a very different range of problems. You find yourself asking whether the end result is to be inflation, as many people were thinking two years ago, or some sort of disorderly break down of the existing system: or even, though it might take place more smoothly than that, some kind of transition, not to private investment, but to a different kind of an eco nomic state. "Now, I do not mean those words to mean anything more than that I am Just looking at the problem ob- i jertively. I am not prophesying any thing nor sounding any alarms.” (Copyright, 1P3P.) r ' " ” r ^ Established 1875 ''“DRUGS' /Carpets } Deserve HinkeVs MATCHLESS^ Cleaning Service ... and Storage We Are Specialists in Rug and Carpet Cleaning ... and Storage • Hinkel’s matchless service cleans THOROUGHLY . . . expels moths, germs and dirt . . . restores floor coverings to their original brightness and beauty —without destructive rubbing! • jrnore than two generations we have CLEANED and STORED Rugs and Carpets for the *™ Washington ... a tribute to our EFFICIENCY, RESPONSIBILITY A RELIABILITY. Telephone Us to Send for Your Rugs and Carpets LOWEST PRICES FOR FINEST WORK ASK US FOR DETAILS Rugs and Carpets STORED for the Summer in STEEL STORAGE RACKS, at moderate cost. OUR SPECIAL FREE SERVICES • All Domestic Rugs Shampooed by Us Are Olue-Slsed. • All Rugs and Carpets are INSURED TOR FULL VALUE against Are, theft or damage, while in our care. E. P. HINKEL & CO. ORIENTAL RUGS Washed and Repaired by Our Expert Weavers, on the Premises 600 Rhode Island Avenue N.E* Telephone: POtomae 1172 CTHE opinions of the writers on this page are their own, not __ necessarily The Star’s. Such opinions are presented in The Star s effort to give all sides of questions of interest to its readers, although such opinions may be contradictory among themselves and directly opposed to The Star’s. Back of the Depression New Deal’s Attitude on Cure Raises Some Questions On the Nature of the Problem. By DOROTHY THOMPSON. THE President's fireside chat was conciliatory in tone, and will be taken by most of us in the spirit in which It was uttered. “Immoderate statements, appeals to prejudice, the creation of unkindness” are, indeed, "offensive asainst the Dorothy Thompson. wnoie population of the United State s.” And "bitterness is never a useful In strument. in pub lic affairs." Bitterness has been rampant on both sides, dur ing the past years, and much of the debate has spread more heat then light. But the President must not confuse his personal enemies with opponents of certain- of his poli cies. If we go on the presumption—and I think we may—that what we all want is a great increase in the na tional Income, its more equitable dis tribution, and greater economic and social stability and security, and that to achieve these ends most of us are willing cheerfully to make consider able personal sacrifice, in the convic tion that, such sacrifice will pay us, even individually, in the long run. since we do not live in isolation, but as part of a sorial order, then the question is whether the policies pro posed are likely to further that end, or not. That is a matter of analysis and Judgment. Must Agree on C ause. Therefore, before we can agree upon a program for recovery, we must 8gree as to the cause of the present depres sion. The cure has to begin with correct diagnosis. Now, it would appear that the administration’s diagnosis has been faulty, and that that Is where the trouble started. The administration still hardens on its theory that, in April, 1937, there was overproduction and a danger of inflation. "Fearing Just such an event," says the Presi dent, "the Federal Reserve System curtailed banking credit, and the Treasury commenced to sterilize gold, as a further brake on what it was feared might turn into a runaway Inflation." They did. Indeed, and by those 1 measures they started the present he- I pression. Obviously, the measures, j on the scale and with the .vehemence j that they were undertaken, were ! wrong. The administration lightens the re serve requirements which it unwisely and unnecessarily stiffened, and re leases the gold that it unwisely and unneeessarily froze. Warnings Against Deflation. As far back as last March and April liberal economists, among them ; Mr. Alexander Sachs, who set. forth ! his views in early autumn before the 1 price conference of the National As sociation of Manufacturers, were pre dicting that radical deflationary mone tary measures were fraught with grave dangers. But the Government chase to listen to other advisers So the ship didn't sail. It didn't, even drift. It started with great speed In the direction of an iceberg. And was their overproduction In 1937? And what does the phrase mean? It 1* very important to ask, be cause if another recovery start* and is going happily in, let u* say, 1939 and 1940, what assurancea have we that the Government, still sticking to its present theories, will not again radically reverse the trend? If the cause of the 1937-8 depres sion was overproduction, and the same cause accounts for the depression of 1929. then the New Deal turns out to he the same thine as the Old Deal, and Mr. Roosevelt's mistakes the same as Mr. Hoover's. But, since the entire procedure and strategy of Govern ment have been very different since 1933 from what they were before, isn’t it reasonable to inquire whether this may not be a different kind of de pression? If you enforce sudden and radical deflation, of course you get overpro duction! If a man is starved even a regular meal can make him sick. Example of Underproduction. On every known ground we have not even begun to take care of the normal demand for new houses. There is one example of flagrant underpro duction. But if you deflate and thus unemploy and produce through a sophomorlc mlsregulation of the stock exchanges a slaughter of equity values, then there is neither the money nor the desire to buy new houses. If, through an undistributed profits tax and a capital gains tax regarded as part, of annual income, you take away reserves and reduce the working capital ratio of even big business to lower levels than at any time since nit: i.npn no one ran nuy ma chinery and make improvements. And, thus. Inventories that were inadequate when business was oper ating at fin per cent of capacity, be come, on the way down to 30 per cent, overstocking! Overproduction can be an effect as well as a cause, and in this depression our belief is that it was an effect. An effect of policies. Auto Sales Cited. Were too many motor cars manu factured? The present level of auto mobile sales, exclusive of foreign sales, which have remained remarkably constant, is about half of normal. We should have three or three and a half million new cars a year for replace ment. demand. And we have had a lower level of building activity throughout the entire recovery than we ever had in the ’20s, prior to the New Deal. The truth is we hardly scratched normal in 1937, and then began the second most severe depression in our history. Of the $7,000,000,000 proposed re covery program nearly a third is nothing except the reversal of mone tary measures taken last spring. That reversal is all to the good. It’s only too bad that the measures were ever taken. Compared with the capital and In come losses sustained in the last seven months the spending program is chicken-feed, and this economy will not recover until more is reversed than the monetary deflationary measures. It can only recover by private invest ment and spending and when capital again is given the opportunity to be come venturesome. tCoprrlaht. 1P3P. New York Tribune Ine > T i X HINNING hair at the temples, M frontal point, or the crown, should warn ! you and alarm you—but should not j||| cause you to feel that baldness is in- yjM evitable. Thinning hair can be stopped 7 J and baldness can be avoided if you con- Vl suit a Thomas expert. ® Ninety percent of all cases of hair loss result from the 14 local scalp dis orders which respond readily to Thomas treatment. A Thomas expert knows the ** symptoms of each of these local scalp ills and knows precisely hcjw to overcome them. He knows how to end dandruff, how to stop abnormal hairfall, and how to promote hair growth on the thin and bald spots. Consult a Thomas expert today and learn the truth about your hair and scalp. If you do not come within the scope Thomas treatment you will be frankly told. • A**adih* Hat* c^ar?c *s ever made for advice, consultation, or comPletc scalP examination. ^SUIT^05^1WASHINGTON BUILDING I (Corner N. Y. Avenue and 15th St. N.W.) H tBepprete Department* tor Men pnt Women I <# HOUM-4 AM, ti T FJfc UTOISiZ to *.10 FJL A - . This Changing World Powers Trying to Patch Up European Situation With ’Gentlemen’s Agreements.’ By CONSTANTINE BKOWN. THE Easter week wu marked by an effort to appease the European situation. The British and the Italians signed another “gentleman’s’’ agreement, which It Is hoped will be more In keeping with the meaning of the word than the last one. The French, under their new Premier, Daladler, are prepared to follow suit. Premier Daladler and his foreign secretary. Bonnet, have succeeded s® in getting inemseives invited to London to discuss the situation with Chamberlain and Lord Hali fax. Blum and Boncour had hinted, prior to their fall from office, that they wanted to see the Brit ish at home. But they got no en couragement. They were told there was nothing of consequence they could take up with hi* majesty’s government at present and what ' ever matters might come ud they could easily be Handled by Ambassador Corbin In the ordinary routine manner. Daladier’s and Bonnet’s visit to I/mdon Is expected to be pre cursory to a gentleman’s agreement between France and Italy. As long as the French are prepared to yield In the same manner the British have done, It Is probable that such an agreement Is possible. There is, however, an important point which could not be settled with ease. And that Is the question of Tunis. Officially, there is no such problem. Tunis is under the protectorate of the French and nobody has challenged thla fact. But there Is a strong feeling in Italy that a change In that protectorate from Paris to Rome would more or less round up Mussolini'* ideas of the Roman African empire. * • * • While a deep silence Is maintained regarding the Anglo-German con versations to lead to a similar gentleman’s agreement, there Is no doubt that the Berlin and London foreign offices are talking quietly and endeav oring to find a basis for such discussions. Hitler has placed himself on record that he want* colonies returned to Germany. On this point he might come easier to an understanding with the French than with the British. Chamberlain is still adamant on that question, although he seems prepared to “consider the matter” If Germany could offer a substantial quid-pro-quo. In diplomatic quarters it Is felt that the four-power pact advo cated by Hitler and Mussolini since 1936, comprising Oermany, Italy, Great Britain and France, but leaving out all other countries, is by way of being completed. The French refused heretofore to Joint In any such arrangements unless the Germans gave assurances that such a pact would rover the Soviet Union and Czechoslovakia against any possible aggression. This Hitler refused to accept. Now it seems that the French are disposed to leave the U. S. S. R. to their own devices and are counseling moderation to the Czechoslovak government. That moderation means yielding to the German request for a new constitution of the republic with autonomous rights to the Sudeten Germans and the Incorporation of Czechoslovakia in the German economic system. • * • * Despite the urgent demands of the loyalist government for more airplanes and tanks from France, the Daladier government has decided not to answer President, Negrin's 80S calls. It Is too late. In any case. The French, like the British government, are becoming reconciled to the aura nioi/ jt i oiiv'ci is oouna oe come the ruler of Spain and are hoping to be able to come to terms with him. Although a large section of French public opinion is still warmly in favor of the loyalist gov ernment, Daladier and Bonnet are adopting a realistic policy similar to Chamberlain's: Let bygones be bygones and concentrate on the immediate future. They feel that w,c huwwuu ui rmuies security irom me Pyrenees siae wiu oe Deicer served by an agreement with Italy rather than by antagonizing that power. * * * * The navy Is contemplating placing a station ship In the Gulf of Davao, where a Japanese fleet is reported to have been sighted at anchor. Davao Is an island where there is a Japanese settlement of some 20.000 inhabitants. They are there legally. But being off the beaten path, there is little supervision of the Island. There has been no official confirmation that a Japanese fleet was actually at anchor in the bay. It is considered, however, quite possible that a few destroyers should have stopped there without notifying, as international regulations require, the Philippine government of their in tentions. The Japanese have done this on other occasions. In order to keep a better watch, Admiral Harry Y&mell, the com mander in chief of the Asiatic Fleet, has been advised to send either a destroyer or a smaller unit, as a permanent station ship in those waters. Headline Folk and What They Do Anna Case Mackay Is Now a Popular Song Writer. By LEMUEL T. BARTON. YESTERDAY was Clarence H. Mackay’* birthday. This, with talk of Easter "song-o-grams," sung by the Postal Telegraph Co., was a belated reminder to this department t-hat 'Mrs. Anna Case Mackay, former opera star, has found a new career, not only In writing the Mri. Hicku, lyrics for the Postal •warblers, but In a prolific output of songs for general public consump tion. Within the last two years *he has written words and music, for more than 50 songs, and they are getting Broadway publi cation. She has been unusually active during the last few weeks. Her first song was writted for Mr. Mackay's birthday two years ago. It was called "Irish Eyes of Blue," a romantic ballad, later published and sung by John Charles Thomas and other famous singers. Other successful songs by Mrs Mackay are "I Know an Irish Garden,” and "Just an Old Fashioned Picture.” But she says she particularly enjoys writing the "song o-grams” for such occasions as Easter and Christmas. Mrs. Mackay was 13 years old, a household drudge 1n a poverty-stricken home at South Branch. N. J, when she began her long climb to the mag nificent estate at Harbor Hill. Long Island, where she now write* her songs. She walked dark and lonely country roads at night, giving piano lessons at 50 cents a lesson. In the remote coun tryside, always carrying a revolver, as she has frequently recalled. She saved and borrowed money to study In Sweden with Mme. Augusta Ohstrom Renard. At the age of 21 she was singing at the Metropolitan. For 21 years she criss-crossed the continent as a concert artist, sometimes traveling 30,000 miles a year. An odd turn In the news was her marriage to Mr. Mackay. seven year* ago. Five years before, there had been quite a dither over the marriage of Mr. Mackay’s daughter, the late Ellin Mackay. to Irving Berlin, song writer. Mr. Mackay. a lover of musical classics and a backer of the philharmonic, sharply challenged Mr. Berlin’s musical pedigree, which ranged back to East Side restaurants that employed singing waiters. He Is now said to be de lighted with Mrs. Mackay's song writing. including the “song-o-grams ” Most of her songs are ballads, but in cline toward swing. "I adore the natural primitive rhythm of music.” she says. "I sup pose that is because I always enjoyed dancing. I often wonder why I didn't become a professional dancer Instead of a singer when I began my career ” Glance at the map and be convinced that the West offers more ... in its amazing variety of vacation activities... in startling scenic beauty... in delightful places to play and rest... in romance and adventure. 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