The Lost Art of Economy

A fact that became apparent last week was that no one in official Washington any longer knows how to save money.

Month ago Secretary of the Treasury Henry Morgenthau Jr. dazed the House Ways & Means Committee by recommending that non-defense expenditures be cut; that $1,000,000,000 could be saved by cutting down farm, NYA and CCC appropriations. Stunned by the sound of a New Dealer recommending economy, Congressmen feebly toyed with this brandnew idea.

Presently, after passing two appropriation bills that included record non-defense expenditures, Congressmen appealed to Mr. Morgenthau to be specific.

Mr. Morgenthau retorted: "Congress has been complaining about being a rubber stamp. Why do they have to be told? Why don't they take the initiative? They are elected by the people for the purpose.

If you tell them, they don't like it." In the meantime Congress had passed one farm bill, had another almost through. The first promised farmers parity payments of $450,000,000 (raised from $50,000,000); the second raised the crop-loan rate from last year's 75% to 85% of parity.* The parity-payment bill guarantees farmers a return at least as big as 1909-14; if prices go above parity, the farmers are in clover. The crop-loan bill permits loans to be made on a fixed valuation, so that if farm prices fall below that valuation, the farmer's crop goes into the Government's surplus bins, and the Government takes the loss, while market prices are kept at an artificial level. If farm prices go above that rate, the farmer sells the commodity and pockets the profits. Said the New York Times acidly: "Congress has committed a shockingly irresponsible act. . . . It is tails the taxpayer loses, heads the farmer wins." Last week Congress kept the parity-payment bill pocketed in conference. The new loan measure had been sent to the White House in the spirit of take-a-dare.

Economy, that hateful, brown-tasting word, was doornail dead.

Then this week the President interred the body. He signed the crop-loan bill with a defensive statement, noting that farmers did not have so great a share of the national income as other groups, but adding that now they would receive 85% parity loans, plus parity payments, plus soil-conservation payments in cash. He did stipulate, as his understanding of the bill's "obscurity," that "under no circumstances should the sum of these three exceed parity." No matter what the President might now say or do, Congressmen had received a clear direction: the lid was off. Anything goes. Franklin Roosevelt had intoned the benediction over economy's grave.

Buck-Passing. From this background, Congress cynically watched the White House to see if the President would dare suggest Federal economies. But Mr. Roosevelt had just recommended a $158,000,000 expansion of the NYA program. Recently when reporters brought the matter up, the President growled like a sore bear. He defended the NYA and CCC appropriations, then passed the buck back again.

Said he: the responsibility of cutting down non-defense expenditures by $1,000,000,000 belongs to the House and Senate.

The picture was complete. Neither the Administration nor Congress knew how to economize. The U.S. was helpless.

Congress, the Treasury and the President were now off in a veritable spray of buck-passing. On Capitol Hill happy members rolled out the pork barrel, singing a song of defense. The House Rivers & Harbors Committee, traditional Congressional gravy boat (composed of members who never let their right hands know what their lefts are doing), last week dusted off the defunct old $150,000,000 Florida Ship Canal, named it a defense project, urged an authorization. Other measures were:

P: $15,000 to improve the strength of onions.

P: Establishment of a Beetle Eradication Claims Commission.

P: A $500,000 increase in Congress' already substantial allowance for the franking of cost-free Government publications.

P: $1,000,000 to buy surplus canned oysters.

P: A bill to develop the 4-H Clubs, costing $86,000,000 for the first six years; $24,000,000 annually thereafter.

P: A bill to collect and publish monthly statistics on cottonseed, peanuts, copra, sesame seed, babassu nuts, etc.

P: Scores of highway, rivers & harbors, waterworks and pension pork-barrel bills.

Added to the usual list of farmer-fattening measures, these last week clearly demonstrated Congressional scorn for any policy of peeling-paring, pinchfist economy.

Finally badgered into it, the President at last did make a gesture, a feeble, finger-twiddling gesture toward economy, but at least a move. In a special message to Congress he suggested that $109,000,000 be sliced off the $995,000,000 WPA appropriation for the 1941-42 fiscal year. This was a drop in the bucket, but economizers thought $109,000,000 better than nothing.

And the President had now passed the buck back to Congress.

*"Parity" is a political concept which holds that the farmer should receive prices for his products which will give him a purchasing power (in terms of other commodities) equal to that which he had in the period 1909-14-- one of the most favorable farm-price periods in history. Most economists regard this procedure as similar to passing a law giving brokers the profits they made in 1929.

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