National Affairs: What Next?

After a sensational three-month spurt President Roosevelt's recovery program was slowing down last week. Farm prices had sagged from July highs, leveled out flat. September business was lagging behind August. NRA had yet to produce its miracle of re-employment. Public works made more headlines than new jobs. Banks were still tight-fisted on credit. Labor troubles pocked the land. Price rises due to NRA tended to cancel out A. A. A. gains in farm purchasing power. President Roosevelt was being bombarded with redoubled demands to turn to direct currency inflation as the one quick, sure means of keeping the country on a rising economic curve.

Into the President's office last week strode Mississippi's tall, bald Pat Harrison, chairman of the Senate Finance Committee, just back from a scouting tour of the South and West. For years Senator Harrison has been a conservative "hard money" Democrat. Yet now he boldly told the President that only by currency inflation could his recovery program be made a success. President Roosevelt listened, smiled, promised nothing. Declared Senator Harrison as he emerged from the White House:

"Commodity prices have got to go up. I favor some form of rational inflation. We've got to do more than we are doing. Personally I would try out the issue of Treasury notes. If commodity prices don't rise, I don't know when we are going to get out of this depression and the next Congress will repeal the President's discretionary-powers and make monetary inflation compulsory. If something isn't done quickly, you can kiss the baby good-by—I mean, the baby of agricultural prosperity. The success of the President's program may be in doubt."

Living proof of Senator Harrison's contention was soon furnished in Washington by the assembling of a cabal of cotton farmers' spokesmen represented, with Oklahoma's arch-inflationist Senator Thomas sitting coonily on the sidelines, by South Carolina's Senator Ellison D. Smith and Senator John H. ("Tallulah") Bankhead. More than 100 interested parties attended these caucuses, whose animated membership demanded two things:

1) 20¢ cotton futures (double that moment's market price).

2) $30 cotton seed (per ton) for the hand-to-mouth citizenry whose domestic economy has brought them scarcely enough to run their 1927 automobiles since 1929.

Eugene Talmadge, Governor of the President's "adopted" State of Georgia, was meanwhile recommending that the Government "print a lot of $10 and $20 bills and scatter them over the country by throwing the money out of airplanes."

The new outcry for cheap money failed to stampede President Roosevelt. Nobody was more ready than he to admit that his whole recovery program was experimental, that some parts of it worked better than others, that knots and kinks were inevitable. He was not discouraged by last week's slack-off. If one method of relief failed, he was willing to shift nimbly to something else, improvising as he went along. Currency inflation he still regarded as a last resort, to be used only in the event of a major business relapse. He did not propose to waste his best ammunition now simply because his front lines were slowing down in their advance.