Partnership Papers

Papers for President Roosevelt's proposed "partnership" between Government and Business finally reached the White House last week. Late one evening New York's Senator Wagner handed them to President Roosevelt as the best composite thought of a swarm of Administration advisers. The President carried them with him on a quiet Sunday cruise down the Potomac, mulled over their details, began to think out a special message with which to submit them to Congress this week.

For long days and nights Senator Wagner, Democratic expert on unemployment relief legislation, had been working over a National Recovery Act with Budget Director Douglas, Secretary of Labor Perkins, Assistant Secretary of Commerce Dickinson and other members of the "Brain Trust." Their White House instructions were to combine in one measure a broad program for public works to make new jobs and the "partnership" idea for Federal supervision of industrial production, prices, wages and working hours as enunciated by the President in his broadcast fortnight ago. The bill would be the Administration's substitute for the crude null and minimum-wage legislation pending in Congress.

Senator Wagner and associates were deluged with recovery plans. Organized labor had one. The National Association of Manufacturers had a second. Economists, experts, bankers and businessmen trooped in with many another. Day after day press headlines blazed away over speculative stories of what U. S. Industry could expect from the U. S. Government. "Principles" were threshed out at White House conferences and details were left to legislative drafting clerks. The final bill that President Roosevelt took down the Potomac was still studded with question marks and blank spaces for him to emend.

The general outline of the National Recovery Act, however, was fairly well set. Government and business were to be made partners by means of a Federal Control Board consisting of four members of the Cabinet and an executive chairman. Through their trade associations a majority of each branch of industry was to draw up agreements to ration production, fix prices, eliminate cut-throat competition, set working hours, establish a fair wage scale. The Federal Control Board would approve such agreements as were in the public interest. Others would be ordered revised or scrapped. The anti-trust laws would be waived to permit each agreement to become effective. Minorities in each industry which tried to buck majority agreements would be whipped into line by the Federal Board. Labor would get the right of collective bargaining; "yellow dog" contracts, wherein workers promise not to join unions, would be outlawed.

The second part of the National Recovery Act was to provide about $3,300,000,000 for public works as part of the President's capital or "extraordinary" budget.* The Government was to raise this sum mostly by the sale of its securities, possibly through the Federal Reserve's new authorization to buy in the open market up to $3,000,000,000 worth of U. S. obligations. Reconstruction Finance Corp. would disburse the cash but the program would be in direct charge of an independent Administration of Public Works. Not only would the U. S. turn builder on a grand scale but it would lend to states, municipalities and even private industry for the same purpose. The prime test was to be not whether a project would some day pay for itself but whether it could be started immediately to make jobs.

Last week's biggest blank in the National Recovery Act was on the method whereby the treasury was to raise by taxation some $220,000,000 per year to pay interest and amortization charges on its building borrowings. Suggested were a tea & coffee tax, an increased income tax, a payroll tax, a stiffer gasoline tax. But on the advice of Budgeteer Douglas, the President seemed to incline in favor of a general manufacturers' sales tax, without exemptions, of slightly more than 1%. Because both he and the Democratic House had sternly turned down the idea of a sales tax earlier this year, the President's friends diplomatically renamed the proposed levy a "re-employment tax," referring to its purpose instead of its nature. P: Last week's news of three Roosevelt sons: Elliott got a job as 'general manager of Gilpin Air Lines (Los Angeles-Agua Caliente), backed by a good family friend, Mrs. Isabella Greenaway of Arizona. Franklin Jr. planned an $800 tourist-class vacation in France and Spain. John got a summer job with a boys' camp in New Hampshire.

P: Mrs. Roosevelt told a woman reporter that she had received "a great many" letters criticizing her multifarious activities. Said the First Lady: "I always answer these letters . . . and I am sorry if I offend. . . . No one can live according to someone else's idea of what is proper."

*Last week this budget was set at about $5,200,000,000. In addition to public works, it included $1,900,000,000 for farm and mortgage refinancing, the Civilian Conservation Corps and direct jobless relief.

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