Plight over Principle

The nation's needy have gone through three hard winters without a dollar's worth of direct aid from the Federal Treasury. Every proposal for first-hand Government relief of hunger and distress has been damned and defeated with the cry of "Dole!" Before a fourth and perhaps harder winter comes the poor and jobless will vote in a national election. In Washington last week political principle began to bow to public plight.

Senate Democrats under Arkansas' Robinson brought forth their first party plan for direct Federal aid to plain citizens. It was endorsed by such men as Alfred Emanuel Smith, Owen D. Young, Bernard Mannes Baruch. The plan: 1) raise $2,300,000,000 by a U. S. bond sale;

2) advance $300,000,000 to strapped States & Cities to feed and clothe their destitute;

3) lend them the balance for such self-amortizing public works as toll bridges and tunnels. The yet-to-be-balanced Budget would not be disturbed by a bond issue.

President Hoover, champion of private charity, was not slow in seeing the perilous possibilities of this plan as a Democratic campaign issue. He summoned Senator Robinson to the White House, thanked him for "opening the way for united action," made a counterproposal. He was ready to reverse himself on direct Federal relief if the Democrats would let his Reconstruction Finance Corp. handle the whole job. The Hoover plan: 1) increase the R. F. C.'s public borrowing capacity from $1,500,000,000 to $3,000,000,000;

2) advance, through it, $300,000,000 to, States (but not to cities) for direct relief;

3) earmark $40,000,000 to stimulate agricultural exports; 4) lend $1,160,000,000 to industry on the strength of contracts for new production.

The President's plan not only steered clear of the Budget but also of the Treasury's credit. It would be financed by the sale of R. F. C. debentures which are only indirect obligations of the Government. Senator Robinson took it back to the Capitol where his party colleagues closeted themselves in an effort to draft a legislative compromise. Most Democrats objected to the idea of R. F. C. loans to private industries rather than to public agencies on the ground that the Administration could use this financial power to muster election votes. Republican Senators, generally cold to their President's proposal, were reported aggrieved at his apparent desertion of them in their "anti-Dole" fight.

To win public support for his plan the President issued another statement about "balancing the Budget," "unity of action, and "frozen confidence." Said he: I have no taste for any such emergency powers. [But] the battle to set our economic machine in motion takes new forms and requires new tactics. We used such emergency powers to win the War; we can use them to fight the Depression.

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