Washington, May 5.
President Roosevelt's obvious fear of a "dangerous boom" and of a "run away inflation" hag been described a8 locking the stable door not after the horse has gone, but before the horse has come.
Since early April the efforts of the President and Administration spokes mon have been concentrated on alk Ing-down" the boom, or ins some people express it attempt {he brake on recovery.
Ihave been looked upon with a certain amount of bewilderment, Almost before the general public had grasped the fact that recovery from the depression could be said to be complete the dangers of another economic crash are being discussed, As former President Hoover used to say "prosperity is just round the corner," $0 does President Roosevelt say "crisis is just round the comer." Yet there are stil! large numbers of unemployed, three times as many as there wace in 1929, Could recovery be said to have arrived until. they Jhad been absorbed; when " minimum of $1,500,000,000 had just been asked for relief? Prices had been rising, both commodities and stocks but production Was increasing.
Dangerous inflation was usually hela to be a rise in prices when production remained the same or diminished. The present position of the United States could hot be compared with 3029; it was more like 1927.
Potential Political Effect that very fact which is alarm= ing the Administration. Tf business were allowed {0 boom ahead then there might be another depression in. 1040, the Democrats would be. dis~ credited and 'a Republican president elected (or a Constitutional-Democrat-Republican president), The New Deal would be entirely discredited. It would be pointed out that it had increased the National debt by $15,- (000,000,000 "and had accomplished nothing. It had been even worse than the Republicans for it had. passed through several years of prosperity without appreciably reducing that debt, The fear of another 1920 is 0 vivid that at the frst sign of any tendencies similar to those which brought about the 1940 crash the Administration feel that they must something about it immediately.
The opening gun in this war against possible inflation was directed at high prices in the heavy industries, 'The President declared at a Press con~ ference that prices were too high and that Government relief agencies would curtail their purchases of steel, cement copper and. similar' primary commodities and use the relief money on minor projects ju which most of the outlay went "to. labour and secondary goods industries. This was followed up by the Department of Justice which began proceedings Against the aluminium industry for violating the anti-trust laws, little while Inter the President @eclared that he was in favour more stringent anti-trust, legislation and believed in a restoration of com= Petition as a method of keeping down Prices. With perfect consistence he asked' Congress to abandon a bill Aesigned fo prevent "cut-throat competition" once the chief economic enemy. The bill would have enabled manufacturers engaged in commerce to fix the price at which they felt their product should be retailed and would have imposed penalties on stores selling the goods for less.
Text read from the printed page and cleaned; old type leaves the occasional error.