Harry Hopkins, Convert

"We must make plans to avoid mass unemployment after the war. We must not imagine that increased taxation and vast public works alone can do the job. . . . It must be done by the establishment of new businesses. . . . Industry must be given every incentive to expand."

These words were noteworthy last week because they came from no free-enterprising businessman, but from New Dealing Harry Hopkins. Once, in the old days of "tax & tax, spend & spend, elect & elect," WPA Boss Harry Hopkins had spent over $5 billion on vast public works trying to prove that federal spending could make the U.S. economy move. But last week, in an article in the American Magazine, Spender Hopkins fervently embraced free enterprise. Skeptics might growl that this was merely a pre-election phony. But it seemed more than that.

As far back as 1939, Hopkins, then Secretary of Commerce, admitted some doubt about public works and flirted cautiously with free enterprise. Now Harry Hopkins' plan to take the federal wraps off business is surprisingly close to what businessmen, notably the Committee for Economic Development (TIME, Sept. 11), themselves want. Wrote Hopkins:

"A constant reliance upon large-scale Government spending . . . with heavier taxes, deficits . . . and perhaps increased competition with private business is not consistent with . . . our competitive system. Public works must be supplementary to the effort of the people."

This effort can be best exerted, wrote Hopkins, by giving business greater incentive to expand and create jobs, chiefly by "levying taxes with an eye to their economic effects."

To do this, said Hopkins, the Administration should:

P: Remove the excess-profits tax as "soon as the threat of inflation" vanishes.

P: Shift more of the burden of financing the federal Government onto the individual income tax--that is, lighten corporation and excise taxes.

P: Reduce heavy income taxes in the upper brackets until they are not so high as to "remove incentives for assuming risk." Modify the double tax on dividends.

P: Boost buying power by lifting all taxes, i.e., income and excise from those earning $15, or less, a week.

All this would go down easily with most businessmen. But there was a bitter pill: Hopkins would boost the present wage-&-hour-act floor under wages from 40-c- an hour to "at least 50-c- and subsequently 60-c- an hour." (After the article appeared, Florida's Senator Claude Pepper drafted a Senate resolution to give the War Labor Board power to raise the floor to 65-c-.) This, said Planner Hopkins, smoothly ignoring all hold-the-line thinking, should bring approval from "enlightened businessmen." It would steady consumption "during the transition to peace."

This seemed like bald politicking, like a broad wink to reassure labor leaders that Hopkins was still one of the boys. For to raise the wage floor would have little effect on established industries, most of which now pay hourly wages far above a 60-c- minimum. Those who would be affected, notably textile workers, are too few to have much effect on consumption.

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