Baby Scrubbing

It was almost like old times last week when General Hugh S. Johnson appeared before the Senate Finance Committee to testify on the bill to renew NRA. The huge Senate caucus room was jam-packed to the doors with twittery spectators. The onetime NRAdministrator looked as tired and bleary-eyed as he did in the late summer of 1933: he had just spent three driving days, three sleepless nights preparing a 20,000-word manuscript on NRA's merits and demerits. And when he hunched himself forward in the witness chair, cocked his spectacles on his nose and began to read his statement, his words crackled and thundered with oldtime gusto. Excerpts:

"Let us scrub our infant offspring vigorously but let us not throw the baby down the drainpipe with the dirty water. . . .

"We can't make another mistake like 1929 to 1932. One more and the fat is in the fire. The next step will be abolition of the profit system--and page Mr. Stalin.

"Did anyone notice the cigaret manufacturers rushing the NRA in order to get a code? . . . The total amount paid to producers in the nine principal tobacco States didn't equal the net profits of the big four cigaret manufacturers in '32.

"Most of the complaints before you were routine complaints . . . the backwash of run-of-the-mill NRA Administration. . . . My first attempt to [get at complaints] was the Darrow Board which I set up in good faith. ... It was a political wailing wall. . . . There was not one fair hearing before it. ... It packed the record with framed testimony .. . hazed witnesses

. . . insulted NRA officials . . . spent $50,000. . . .

"I think Section 7a has substantially failed of its original purpose. ... To abandon NRA now would be like burning down your houses to get rid of a few rats in the attic."

When, after two hours and 20 minutes of direct testimony. General Johnson had finished, the Senate committeemen were too exhausted to question him in detail.

But the General had hardly quit the committee room before Senators were given something new to chew on. It was a report on NRA's accomplishments by Brookings Institution, an independent Washington foundation which makes economic studies and researches. The authors were Leon C. Marshall (who prepared some of the material before leaving the Institution to become executive secretary of NIRB), Leverett S. Lyon, onetime deputy assistant NRAdministrator, and four other economists including George Terborgh, a member of the Federal Reserve Board's staff. Only excerpts from the report were made public.

The survey announced that it made no attempt to evaluate NRA's reforms, had concentrated on the question of whether NRA had promoted recovery. Standard to judge recovery: Do citizens of the U. S. have more to eat, more to wear, etc.? Conclusions :

"Because of the delay attending the inauguration of codes and the speculative anticipation of their effects, prices rose on the average ahead of wage rates. ... On the whole, price and wage-rate levels both moved to considerably higher ground without material change in their relative positions. . . . Not only did the program fail to work out as planned, but the plan itself was in our judgment a mistaken one. The conditions were not propitious for a sizable expansion of wages at the expense of profits. If this had occurred it would probably have frozen up more purchasing power than it released. . . .

"In trying to raise the real purchasing power of the nation by boosting costs and prices, the NRA put the cart before the horse. Raising the prices either of labor or goods is not the way to get a larger volume purchased. . . . The conclusion indicated by this resume is that the NRA on the whole retarded recovery. . . . We do not feel justified in stating our own judgment more definitely than to say that the retarding effect of the NRA has been substantial. . . ."

When Donald Richberg, who now serves as chief apologist for the Administration's recovery policies, read these words in his morning paper, his heart swelled with wrath. He was particularly bitter because the Press, having only parts of the report, assumed that Leon Marshall had approved these conclusions whereas Mr. Marshall had left the Brookings Institution before these conclusions were drafted. But Mr. Richberg was equally wroth that an institution of Brookings' standing should speak so critically of NRA. He vented his feelings in a long statement charging that to judge recovery by whether people had more usable goods was not a fair test and went on to cry the report down thus: "Anyone reading the book will see (as indicated in the advance publicity) that it has been designed as political propaganda in order to influence Congressional action in support of the pet theories of a few reactionary economists. The publication of this intemperate, emotional document in aid of a political attack upon the NRA, and the timing even of advance publicity apparently in an effort to 'blanket' General Johnson's testimony, are actions quite unworthy of an institution assuming the character of scientific impartiality. . . ."

This file is automatically generated by a robot program, so reader's discretion is required.