Indianapolis Times, Indianapolis, Marion County, 14 April 1938 — Page 7

THURSDAY, APRI

Text of Roosevelt's ‘Pump-Priming” Message :

WASHINGTON, April 14 (U. P.).—Following is the text of President Roosevelt's message to Congress on re-

covery and relief: To the Congress of the United States:

The prosperity of the United States is of necessity a primary concern of Government. Current events, if allowed to run undisturbed, will continue to threaten the security of our people and tne stability of our economic life. The national A: tion has promised never to stand idly by and watch its people, its business system and its national lif€ disintegrate. It is because the course of our economics has run adversely for half a year that we owe it to ourselves to turn it in the other direction before the situation becomes more definitely serious. When this Administration took office it found business, credit and agriculture in collapse. The collapse had followed on the heels of overspeculation and overproduction of practically every article or instrument used by man. - the processes of overspeculation and overproduction—in the Twenties—millions of people had been put to work, but. the products of their hands had exceeded the purchasing power of their pocketbooks, with the result that huge surpluses, not only of crops but also of buildings and goods of every kind, overhung the market. Under the inexorable law of supply and demand, supplies so overran demand which would pay that production was compelled to stop. Unemployment and closed factories resulted. Hence the tragic years from 1929 to 1933. Starting in March, 1933, the Congress and the Administration devoted themselves unceasingly, not only to re-establishing reservoirs of credit, but to putting purchasing power in the hands of the consuming public and actually securing a more equitable distribution of the national income. Thus the down=ward spiral was stopped—and -not merely stopped, but started on an upward course—a trend lasting through four years and a half. In 1928 the national income was 80 billion delalsr; in 1932 it had fallen to less than 40-billion dollars.

NATIONAL INCOME RISES

Since the low point of 1932, each year including 1937 has shown a steady increase in the income which the nation produced, reflected in increased wages and salaries, in in- . creased dividends, interest and individual’s income. In 1937 the total of our citizens’ income had risen to 68 billion dollars. At the end of 1936 the efforts of the Government to ald in increasing the nation’s purchasing power and in stimulating business had become so well recognized that both the business community and the Government felt that a large measure of the Government's spending activities could be materially reduced. But the very vigor of the recovery in both durable goods and con‘sumers’ goods brought into the picture early in 1937 certain highly undesirable practices, which were in large part responsible for? the economic decline which began in the "later months of that year. Again production outran the ability to buy. : There were nrany reasons for this overproduction. One: was fear— fear of war abroad, fear of inflation, fear of nation-wide strikes. None of these fears. have been borne - out. There were other causes of overproduction, and these causes differed in each industry. The net result of these causes and ill-advised practices was a repetition, on a small scale, of what had happened in 1927, 1928 and 1929 on:a much larger scale. In other words, production in many important lines of goods outran the ability of the public to purchase them. For example, through the winter and spring of 1937 cotton factories in hundreds of cases ‘were running on a three-shift basis, piling up cotton goods in the factory and . in: the hands of middle men and retailers. For example, also, automobile manufacturers not only turned out a normal increase of finished cars, but encouraged the normal increase to run into abnormal figures, using every known method to push their sales. This meant, of course, that the steel mills of the nation ran on a 24-hour basis, and the tire companies and cotton factories speeded up to meet the same type. of abnormally stimulated demand. The buying power of the nation lagged behind. :

‘PRICES ROSE TOO FAST

nomic process of getting out the raw materials, putting - them through the manufacturing and finishing processes, selling them to the retailers, selling them to the consumer, and finally using them, got completely out of balance. The Government of the United States fearing. just such an event had issued warnings in April, 1937, against these practices of over-production

and high prices. The Federal Re- | turn

serve System curtailed banking credit, and the Treasury commenced to “sterilize” gold as a further brake on what it was feared might turn into a -away inflation. The simple fact is that the laying off of workers came upon us last autumn and has been eontinuing at such a pace ever since that all of us, Government and banking and business and workers, and those faced with® destitution, recognize the need for action. It should be noted in fairness that since Jan. 1, 1937, the President has recommended to the Congress only four measures of major importance to the business of the country: 1. Legislation to stabilize agriculture. A comprehensive law was approved by me two months ago. 2. Legislation to end serious loopholes in our ‘personal income tax laws. . This was enacted last summer. 3. Legislation to put a floor under wages and:a ceiling over hours of labor in industry, and 4. Tax legislation to remove inequities from the undistributed profits tax, especially as they effect the smaller type of business. Both this measure and the third are still under consideration by the Congress. The record speaks for itself. No other measures affecting business have been proposed.

‘INCOME MUST BE RAISED’

All the energies of Government and business must be directed to increasing the national income; to putting more people into private jobs; to giving security and the feeling of security to all people mn all walks of life. I believe that improvement in Government and business practices must go hand in hand with recovery —that they should be, and will be, a definite aid to recovery. While I do not wish in this message to overemphasize some of the needs, I do want to say that I believe that we must be definitely aware of certain of them—the elimination of future tax-exempt bonds of all kinds of Government, agencies; the subjecting of Government salaries and wages of all kinds to Federal and State income taxes; a serious undertaking to solve the railroad problem and the problems of monopolistic practices and price fixing. These are no new subjects; nor have I anything to add to them except the statement that their solution will help and not hurt business. At the same time, I must repeat what I believe the overwhelming majority of both housés of the Congress will agree to—that the Con-gress-and the Chief Executive can ill afford to weaken or destroy great reforms which, during the last five

years, have peen effected on behalf |

of the American people. In our rehabilitation of the banking structure and of agriculture, in our pro-

visions for adequate and cheaper

credit for all types of business, in our acceptance of national responsibility - for unemployment relief, in our strengthening of the credit of

State and local Government, in our

encouragement of housing, sium clearance and home ownership, in our supervision of stock exchanges and public - utility holding companies and the issuance of new securities, in our-provision for social security, the electorate of America wants no backward steps taken.

‘CONSOLIDATE GAINS’

We have recognized the right of labor to free organization, to collective bargaining; and machinery for the handling of labor relations is now in existence. The principles are established even though we can all admit that through the evolution of time administration and practices can be improved. Such improvement can come about most quickly and most peacefully through sincere efforts to understand and assist on the t of labor leaders and employers alike. The never-ceasing evolution of human society will doubtless bring forth new problems which will require new adjustments. Our immediate task is to consolidate and maintain the gains achieved. In this situation there is no reason and no occasion for any American to allow his fears to be aroused

or his energy and enterprise to be

paralyzed by doubt or uncertainty. | prise:

Our situation is vastly different from that which we faced five years ago. Let us use the tools already forged and laid out on the bench. ‘At this immediate time we suffer from a failure of consumer demand. The hoped for re-employment of this spring is not proceeding fast enough to creaté an eeonomic up-

Therefore the problem calls fer action both by the Government and by the people.

100 BILLION SET AS GOAL

It cannot be disputed that the national income which was 38 billions in 1932, 68 billions in 1937, is now running at the lesser rate of about 56 billions. If it can be increased to 80 billion dollars in the course of the next year or two the whole economic picture will be different. Hundreds of thousands more people will be employed in private industry, hundreds of thousands fewer will be in need of relief, and consumer demand for goods will be greatly stimulated. I do not set 80 billion dollars as the national income goal. It ought to rise in the next decade to more than 100 bil-

lions. I want to make it clear that.

we do not believe that we can get an adequate rise in national income merely by investing, lending or spending public funds. It is essential in our economy that private funds be put to work:and all of us recognize that such funds are entitled to a fair profit. As citizen income rises, let us not forget that Government expenditures will go down and Government tax receipts will go up. How and where can and should the Government help to start an upward spiral? ; I propose to Congress three groups of measures: 1. In the first category: I place additional appropriations for the fiscal year beginning July, 1928. These will not put more money in the hands of the cohsuming public than we are spending in the current fiscal year, but they will prevent men and women from being thrown out of work on July 1. They will stop the spiral from continuing its downward course: .

RFC LOANS INCLUDED

‘(a) I recommend an appropria-

tion of $1,250,000,000 for the Works

Progress Administration, to be used during the first seven months of the next fiscal year. Such a grant is ammunition of the highest grade for attack on recession. It will not greatly increase the present rate of expenditure, but ought to be sufficient to care for the, additional men and women who e gome or are coming to an of their unemployment in nce payments. (b) For the Farm Security Administration an appropriation of $175,000,000 for the next fiscal year. (c) For the National Youth Administration the sum of $75,000,000 to cover the full fiscal year. (d) For the Civilian Conservation Corps the sum of $50,000,000 additional to maintain the existing number ‘of camps now in operation.

I call your attention to the fact!

that these appropriations will avert the laying off of people now receiving assistance from the Federal Government. In this same category of stopping the downward spiral, I also place the authorization recently given for the lending of money to business

‘enterprises by the Reconstruction

Finance Corp. I do so because the greater part of such loans will go to businesses which are in grave danger of shutting down and throwing people out of employment, Some

of the moriey, but, in all probability |

only the smaller part of the loans, will enable businesses to employ

‘eral Government would assume the

more people or start new enter2. In the second category, the Administration proposes . immediately to make additional bank resources available for the credit needs of the country. This can be done without legislation, It will be done through the desterilization of approximately

by action on the part of the Federal Reserve Board to reduce reserve requirements by about threequarters of a bililon dollars. The Federal Reserve Board informs me that they are willing to do se. These measures will make more abundant

$1,400,000,000 of Treasury gold, ac-| Federal companied both methods should be limited to|f

the supply of funds for commerce,’| Year «

industry and agriculture. By themselves, however, monetary measures are insufficient to start us on a sustained upward movement. As a part of better administration I hope that Federal banking supervision can be better co-ordi-nated. In addition, I am requesting that the s Exchange Commission consider such simplification of regulations as will assist and expedite the financing, particularly of small business enterprises.

NEW WORK HELD VITAL =

3. I come, therefore, to the third) category which I consider to be vital. The first two , categories— maintenance of relief and the expansion of credit might prove sufficient—but in my judgment other measures are essential. You and I cannot afford to equip ourselves with two rounds of ammunition where three rounds are necessary. If we stop at relief and credit, we may find ourselves without ammunition before the enemy is routed. If we are fully equipped with the third round of ammunition, we stand to win the battle against adversity. This third proposal relates solely to definite additions to the purchasing power of the nation by providing new work: (A) I ask for certain amendments to the United States Housing Authority Act to permit the undertaking of the immediate construction of about $300,000,000 of additional projects. The Federal Housing Administration is prepared to increase the already mounting volume of home and apartment construction. % (B) I ask for a renewal of public works projects. I believe that by the expenditure of $450,000,000, and the granting of authority to loan up to $1,000,000,000 to states and their subdivisions, a vast number of well thought out, needed and permanent public improvements can be undertaken this summer and autumn. I believe that the aid of the Federal Government should be put in optional form—either the existing method of 45 per cent grant and 55 per cent loan, or the advancing of the whole sum as loans to states

and their subdivisions without in- |

terest. Under such a plan the Fed-

payment of interest and the borrow-

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Thus by the autumn of 1937 the nation again had stocks. on hand which the consuming public could not buy because the purchasing power of the consuming public had not kept pace with the production. During the same period prior to last autumn, the prices of many vital products had risen faster than was warranted. For example, copper—which undoubtedly can be produced at a profit in this country for from 10 to 12 cents a pound—was pushed up and up to 17 cents a pound. The price of steel products of many kinds was increased far more than was justified by the increased wages of steel workers. In the case of many commodities the price to the consumer was raised well above the inflationary boom prices of 1929. In many lines of goods and materials, prices got so high that buyers and builders ceased to buy or to build. ~ Once more, as in 1929, the eco-

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(Turn to Page 15)

BRONZE SHRINE GIVEN

The Indianapolis chapter of the Children of- the American Revolution, known as “The Old Glory Society,” today presented to Shortridge High School a bronze shrine for a copy of the U. 8S. Constitution. The presentation was made by Fred I. Jones, son of s. Joe Merriam, senjor president of the organization. A program of patriotic music was given by students under direction of Mrs. Laura OC. Moag. Arthur Northrup and John Pau Ragsdale spoke on the Constiution.

(BE) I recommend the appropria-

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— PAGE 7 THIEVES SPARING IN THEFT |P.).—Thieves entered the home of drawers and closets, but took only PAINESVILLE, O., April 14 (U.|Mrs. Catherine Lilly, ransacked|a fountain pen and a mouthorgan.

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