Economics in Manhattan

For the first time since he became President, Franklin Roosevelt last week made a political speech in Manhattan. The occasion was the Jefferson birthday dinner* of the National Democratic Club. Its importance was that New York is rated a close state in 1936 calculations. Any serious wavering on the part of New York City's nominally heavy Democratic majority might cost Democrat Roosevelt New York's 47 votes in the Electoral College. With Alfred Emanuel Smith and James John Walker notably absent, the powers of Democratic politics in New York sat down to dine with President Roosevelt in the Commodore Hotel's main ballroom and hear his arguments for their support. They turned out to be largely a dissertation on New Deal economics.

Said he:

"Economists are still trying to find out what it was that hit us back in 1929. I am not a professional economist but I think I know. What hit us was a decade of debauch, of group selfishness. . . . "Some individuals are never satisfied. People complain to me about the current costs of rebuilding America, about the burden on future generations. I tell them that whereas the deficit of the Federal Government this year is about three billion dollars, the national income of the people of the United States has risen from thirty-five billions in the year 1932 to sixty-five billions in the year 1936, and I tell them further that the only burden we need to fear is the burden our children would have to bear if we failed to take these measures today. . . . "Other individuals are never satisfied. One of these, for example, belongs to a newly organized brain trust--not mine. He says that the only way to get full recovery --I wonder if he admits that we have had any recovery--is to lower prices by cheapening the costs of production. "Let us reduce that to plain English. You can cheapen the costs of industrial production by two methods. One is by the development of new machinery and new technique and by increasing employe efficiency. We do not discourage that. But do not dodge the fact that this means fewer men employed and more men unemployed. The other way to reduce the costs of industrial production is to establish longer hours for the same pay or to reduce the pay for the same number of hours. If you lengthen hours you will need fewer workers. More men out of work. If you choose lower wages for the same number of hours you cut the dollars in the pay envelope and automatically cut down the purchasing power of the worker himself.

"Reduction of costs of manufacture does not mean more purchasing power and more goods consumed. It means just the opposite. ... If you increase buying power, prices will go up but more goods will be bought. . . . Higher wages for workers, more income for farmers means more goods produced, more and better food eaten, fewer unemployed and lower taxes.

"That is my economic and social philosophy, and, incidentally, my political philosophy as well. I believe from the bottom of my heart that it is the philosophy of 1936 America."

The President had hardly set the stage with his Manhattan speech for a campaign debate on economics before another amateur economist, generally friendly to the New Deal, cracked back at his statement that reduction of manufacturing costs means not more purchasing power, but less. Wrote Scripps-Howard Pundit Raymond Clapper:

"Henry Ford will be surprised at that statement, having led the way to establishment of one of the greatest of American industries by reducing costs and putting out a low-priced car within the reach of almost anyone with a job. So will the radio industry, the ready-made garment industry and all business men who have participated in building up the great consumer industries by getting their prices down within reach of the average pocketbook.

"Even some of Mr. Roosevelt's own New Dealers will be surprised at it. Especially those in TVA, who have been boasting that lower electricity prices will stimulate consumption and who point with pride to the fact that in the TVA area sales of electrical household equipment have increased more than in any other area in the country. . . . [Mr. Roosevelt] has given the Republicans an opening for a real program built upon an effort to restore free competitive prices. . . ."

P: Before going to Manhattan to argue the theory of New Deal economics, President Roosevelt put his signature to a new law empowering states to enforce compulsory crop control of tobacco (TIME, April 27).

P: In the East Room of the White House funeral services were held over the body of the President's Secretary Louis McHenry Howe. Then President & Mrs. Roosevelt accompanied their late friend on a special train to Fall River, Mass., where he was buried, hurried back to Washington.

P: Dr. Stanley High, onetime editor of the Christian Herald, who was recently loaned by National Broadcasting Co. to work for the Democratic National Committee, brought to the White House the first fruits of his new labor: the directors of the Good Neighbor League, newly organized to promote the New Deal's "Good Neighbor" policy. Among the directors were Mrs. Carrie Chapman Catt, Methodist Bishop Edgar Blake, Dr. George Foster Peabody, Mrs. Estelle M. Sternberger, Banker Amadeo Peter Giannini, Social Worker Lillian D. Wald, Dr. Henry Goddard Leach. Object of the League was to unite the forces of Feminism, Piety and Pacifism behind Franklin Roosevelt for reelection.

P: After his speech in Manhattan, the President spent a night at his town house, motored on to Hyde Park for a few days rest and fun.

* Jefferson's birthday is April 13, but since that date was not a Saturday and since the President had a previous engagement with the Gridiron Club on the Saturday following, Democrats postponed Jefferson's birthday for twelve days.

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