Economic Readjustments Essential to Prosperity

Report Outline
Toward Recovery: Poltical Control vs. Economic Forces
The Contrast of Light and Heavy Industries
Status of the Construction Industry
The Relative Position of Agriculture
Needed Adjustments in Transportation
Special Focus

Toward Recovery: Poltical Control vs. Economic Forces

Maladjustments in Prosperity and Depression

Whatever use is made by the President of the authority conferred by the inflation-farm relief act, and whatever may be the nature of the authority to be sought in the forthcoming “national industrial recovery act,” the outstanding significance of this and other legislation desired by the administration is the resort to political control, in substitute for ordinary economic forces, as a means of lifting the country out of the depression. These measures must be regarded as part of a program for a “planned economy” as distinguished from a system under which supply and demand are left largely to themselves to determine prices, and prices are left to themselves to direct production.

Senator Thomas (D., Utah) said in advocating the “controlled inflation” amendment in the Senate that its provisions made the farm bill unnecessary, but the administration continued to press for the extraordinary powers over production and prices asked for the Secretary of Agriculture. The recognition is implicit in this and other economic legislation which has a place on the Roosevelt program that the problem of general recovery is not to be solved simply by inflating the “general price level.”

All industries are not facing the same sets of problems at the present time. Some are much more depressed than others; some are suffering primarily from the low prices of their products, while others would be benefited by a lowering of prices if demand could thus be increased; some lack a market chiefly on account of the depression in other industries, while certain ones are suffering from past over-production and speculation in their own fields. Heavy debt charges burden some industries, but others, free from debt, are in a worse situation economically. Whatever policy is adopted with regard to money and credit, consideration must be given to the effect of that policy upon individual prices and individual industries, and their relation to one another. This is essential not only to recovery from the present depression but to the maintenance of industrial activity in the future—for it is now generally recognized that it is in times of prosperity that the seeds of depression are sown.