Secretary of Economics

One day last week, Franklin Roosevelt appointed three of the six Executive Assistants with a "passion for anonymity" whom the Reorganization Act allows him. When the news came out one astute reporter dashed over to the white marble palace of the Federal Reserve Board. He wanted to be the first to bring the good news to the President's new economic adviser. He was. Economist Lauchlin ("Lauch") Currie, a man whose economic ideas will henceforth be of No. 1 concern to U. S. business, thanked him.

Anything but a politico is new Assistant Currie. Short, Scottish Nova Scotian Currie went to the London School of Economics, thence to graduate work at Harvard. Duly Ph.D.'d, he taught Harvard boys from 1927 to 1934 that the purpose of business is profit. In 1934, Secretary Henry Morgenthau Jr.'s then economic soothsayer (and still his privy counselor), conservative Chicago Professor Jacob (Balanced Budget) Viner, induced Currie to leave Harvard, made him his assistant. Later that year, Chairman Marriner Stoddard (Unbalanced Budget) Eccles of the Federal Reserve Board spotted Currie for his technical qualifications, made him Assistant Director of Research and Statistics and personal adviser.

As No. 1 Federal Reserve economic troubleshooter, Currie quickly won recognition inside political brain-picking circles. But not till May 1939 (via his becharted Temporary National Economic Committee testimony on capital investment) did nation-wide public recognition come for his analytical prowess.

Highlights of his TNEC presentation (which earned him a fan letter from John Maynard Keynes) were his demonstrations that:

1) Political misgivings did not prevent businessmen from investing $5,341,000,000 in new equipment (distinguished from plant) in 1937. This was 94% as much as in 1929, more than any previous year. Currie's argument: investment still follows production, not the editorial page.

2) During the prosperous Republican Twenties, while Washington boasted balanced budgets, State and local governments were running up debt at the rate of nearly $1,000,000,000 yearly; since 1932, however, State and local governments instead of providing an outlet for savings have been piling them up. Carrie's argument : the net Federal investment now has to be at least $1,000,000,000 to provide equivalent purchasing power.

Lauch Currie probably comes nearer to having a passion for anonymity than any other New Deal adviser. First evidence of Currie's growing technical weight in Washington came in the spring of 1938, when he wrote an influential memo on the Causes of the Recession. Its prime theses, now commonplace: 1) U. S. Social Security taxes took so much out of the public pocketbook that the Government's net contribution was reduced during the crucial March-September period in 1937 to a monthly average of $60,000,000 from $335,000,000 during 1936. 2) "Compensatory" Federal spending to stimulate heavy industry might be more flexible if concentrated "in large part outside the regular budget."

Outside the regular budget, accordingly, are to be the Federal corporations investing in self-liquidating projects (under the Lending-Spending Bill now before Congress). Though Anti-Spending Henry Morgenthau frowned on original public works items in this Bill, he favors the rail equipment plank which Currie ingeniously formulated to please business. Cash-pressed railroads will be allowed to acquire cost-cutting equipment without running up more debt. They may just lease on an attractive hire-purchase basis, end by owning the equipment, thus stand to save millions a year and stimulate heavy industry without putting the U. S. Government into the equipment business or adding to the Government debt.

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