The Charlotte News

Wednesday, April 20, 1938

SIX EDITORIALS

Site Ed. Note: "In Partibus Infidelium" suggests to us that the hapless Mr. Tippett was only a forerunner to Justice Scalia of the Supreme Court, who, when asked a couple Sundays ago while exiting church a question about the continued viability of Roe v. Wade, performed much the same gesture to the newsman and his photographer as did Mr. Tippett. Good thing the gesture of Justice Scalia wasn't likewise to a jaypee.

"Wild Statements" refers to "Billions for Votes" by Hugh Johnson, and so we include the latter as well. The incidental mention by Johnson of "South Sea Bubbles" refers to the aleatory investment schemes of the South Seas Company of England between 1711 and 1720 in which the company promoted ventures in South America, predominated by Spanish colonial interests. Because of the War of Spanish Succession, there was no profit to be made in the ventures, but, as the Enron of its day perhaps, shares were given to wealthy and influential citizens in Great Britain who were then promoted as shareholders, with lavish puffing going on artificially to pump up the value of the stocks, causing a stampede for the stock by the wealthy and the not so, alike, until eventually the Bubble thus generated in the stock's price burst, gravity coming ultimately into play, such that most who hadn't gotten out already through insider information, went bust. Proving that, at least among the honest traders, gravity in such instances plays no favorites, Sir Isaac Newton lost £20,000.

The reference, replete with its coupling to the Mississippi Company boom era in France of 1717-20, a similar scheme of a Scottish gambler named John Law, apparently the paradigm by which the South Seas Company conjured its bubble machine, is also incidentally in The Mind of the South, viz:

So who copied whom? Who came first? Johnson's piece was the one first published. So, we guess we'll have to give the nod to him this time. But did he see advance drafting work by Cash through Knopf? If so, were there other such perceived cribs of Cash in Johnson's pieces explaining more thoroughly Cash's usual annoyance with the General? Indeed, we do note that many was the time a Cash piece was shadowed several days later by a Johnson piece on the same topic with similar thoughts expressed. Then again, since the schemes developed at the same time in history in countries separated but by a channel, other writers before either had associated the two ventures, so perhaps neither stole from either. Ah well, only the Mississippi's and South Seas' Shadows know.

By Hugh S. Johnson

Washington.--Comment on the President's spending message has been deliberately reserved from this column to allow time to cool off and observe the horrendous thing with at least a moderate temperature.

Of course, the purpose is to purchase the election. If what had been proposed were only spending--increase in debt--this might not have been so clear. But it did not stand alone. Every single known pressure leading to inflation was applied--except, perhaps, the outright expedient of printing money.

There are two intangibles that lead to active markets and increasing business. They are diametrical opposites. One is confidence. The other is fear. When people think that prices and business are going to be better, they begin to buy things, through confidence. Because they have faith in the immediate future, prices and business improve. Their thinking makes it so. That is a slow steady normal process and is the only sound way in which business can be activated.

THE POLICY IS TO KILL FAITH IN OUR MONEY

But there is another way. When people begin to be afraid of the money and credit of their government, they recall such incidents as the French assignats, the depreciation of the Russian ruble, the German mark, and our Continental and Confederate currencies. In those cases, wealth in the form of money became as worthless as second-hand wall paper. I remember reading the memoirs of a Confederate civil servant in Vicksburg. His year's salary in Jeff Davis' currency was not enough to buy meat for his cat.

When people fear this, they want to get rid of their money and turn it into wealth in the form of goods or common stocks as quickly as possible. A panic buyers' market results. All prices go through the ceiling. People who do not turn their money into things are ruined. People who depend on wages, salaries, pensions or life insurance policies see the buying power of their income cut to fractions. This is "inflation" in its most sinister sense.

Mr. Roosevelt had two choices. He could have relied on a sound recovery through confidence. He elected to rely on recovery through fear. There are advisers at his elbow who insist that we can turn on just a little fear--and then regulate that to prevent any panic or runaway market. It is to those people he has listened in making these menacing inflationary gestures.

AND THAT IS TO LEAP HEADLONG INTO RUIN

The fault in that philosophy is that any such fear is necessarily mass fear. Exactly that has been incited. But mass fear is mass madness--mob madness. Man acting alone, as someone has said, has reasonable intelligence, but as one of the crowd, man is a blockhead. This has been proved too often in human history to question it now--the Mississippi and South Sea Bubbles, Tulipomania in Holland, the Florida boom, the 1929 fantasy of the "new economics," the Crusades and the Tarantella (dance craze) in Italy.

You can't turn on "just a leetle panic" and then regulate it, any more than you can fire off a gun gradually. And if you could in this purely fiscal problem, where would it get you? When people buy through confidence, they buy to have and use and consume. When they buy through fear of the value of money, they buy to hoard. Someday they must sell and when they do--the deluge. It has been so since the world began.

Yes, it is quite possible that Mr. Roosevelt's measures will make a hump in all economic indexes broad enough to get him by the elections, but afterward, as sure as sunrise, will come a worse depression than we yet have known.

It is not only in North Carolina that the jaypees are like that. From Philadelphia, for instance, comes this moving tale of one yclept Thomas O'Hara.

He got into a traffic jam. He said he didn't sit on his horn. Mr. Frank D. Tippett, of Washington, said he did. Which was why, said Mr. Tippett, that he, Mr. Tippett, felt moved in the spirit of good clean fun, to thumb his nose at him, Magistrate O'Hara. Anyhow, the jaypee was incensed. Anyhow, he hauled Mr. Tippett out of his car and had him carried to the police station. And there, serving as both jury and judge in his own case, he found that Mr. Tippett was guilty--of lese majeste? Not that precisely, but disorderly conduct. And fined him.

Here's a little test in applied psychology, or something like that. Your reaction, now, if you please, to this headline:

MILL OFFICIAL CONVICTED OF VIOLATING LABOR LAWS

Favorable or unfavorable? Does it serve him right, or do you feel that the Federal Government, through its agency, the National Labor Relations Board, is high-handed and quite arbitrary in its methods of enforcing a one-sided industrial code?

But suppose it was, as it was, the State of North Carolina's labor laws that this mill official had violated; does that put a different face on the matter, and have you no longer any slight sympathy for the offender? If that is the way of it, you are probably an old-time Democrat, at least slightly anti-administration and more conservative than progressive.

It's a slider, inside, for ball four...

The baseball season opens tomorrow, and they tell us that the home club has a team that is going to be interesting to watch. Young fellows, a lot of them, without an old-timer in the crowd. Hustling to make good and so get the call to the big show and fame and the real money. Eager to set this league on fire so that the folks back home may read about it and be impressed. What they lack in experience, which is valuable, they are said to make up in aggressiveness and the old pep.

It's a grand game, this baseball that is still the national pastime in spite of the spectacular nature of football and the inroads of the more effete sports like golf and tennis. The rules are simple, familiar to nearly everybody; and the play is easy to follow, so that even the girlfriend may have a fairly good idea of who's ahead and who's playing a good game. She may miss some of the strategy, but the real objective is to get the most runs, and she can keep up with that if she can count. Some of them can.

And as for Charlotte's team, it seems somehow more than a little fitting that it should be a young team, terribly anxious to go places. After all, that's a description that will do as well for the town itself.

The practice of taking a lawyer's job with the Government, familiarizing one's self with Governmental procedure and personnel (at the Government's expense), resigning and hanging out a shingle in Washington in the expectation of capitalizing on knowing your way around,--that practice is general. For one, Tyre Taylor, a canny Young Democrat, did it. Any number of Democratic national committeemen have done what amounts to the same thing, except that entree was already theirs without the necessity of an apprenticeship.

A new twist, however, is given to this ethically questionable business of representing the Government in order to acquire the inside experience to represent clients before the Government. The assistant general counsel to the HOLC resigned to enter private practice--in Washington, of course. To the lawyers HOLC employs over the country went out a letter, under Government frank, from HOLC's head legalite, baldly soliciting business for this private practitioner, emphasizing that he would specialize in Government practice, and giving his office address. This head legalite resigned, and that's that. But the method of using the Government as a stepping stone to practice before the Government is still unofficially condoned.

Say this for the departed Tugwell--before he left the Resettlement Administration he handed down a ruling that lawyers in his employ cannot take cases before the Government until they had been disconnected from the Federal payroll for a period of two years.

General Johnson represents the remarks he makes in the column to the right as the product of several days of deliberate consideration and "a moderate temperature." If so, then we'd hate to hear the General when he was really in a rabid temper.

If what he says is so--if it is really true that the purpose of the President of the United States in proposing to spend $7,000,000,000 is "to purchase the election"--if it is really true that the President of the United States is deliberately trying to stampede people into buying by destroying confidence in the currency and in the solvency of the government behind that currency--then the President of the United States is obviously a sinister scoundrel who ought to be impeached forthwith.

But, of course, it is simply not so. The General, in his dislike of the policy, has forgotten himself and allowed himself to be grossly unfair to the man. The President may or may not be wrong in his policy. Certainly, this proposal for the spending of $7,000,000,000 more seems desperate counsel. But it must be remembered too, that we once more face desperate times. Something must be done and done quickly, or we stand to find ourselves back in the dreadful slough of 1932. It may very well be true, probably is true, that some of the policies of the President have contributed to the making of this situation. But, in any case, that does not matter now. The situation is before us, implacably. And so, reluctant though we are to say it, we ourselves incline to agree that spending is inescapably necessary at present. Perhaps it will not work, perhaps it has never really worked. But perhaps it has--and will, for the short pull. About that we believe nobody really knows or can know with certainty. We are too close to the facts to analyze them dispassionately.

That, however, is only our opinion. The President may be right, he may be wrong. More than that, the President is not immaculate. It is all too plain that, like every other man who has lived in the White House, since the time of Andrew Jackson, at least, he has not been above the assiduous practice of politics. There have been times, indeed, when his practice of politics has been crass and offensive. And we are far from suggesting that considerations of politics have not entered secondarily into the making of the spending policy.

But to say that isn't a very different thing from impugning the ultimate good faith of the President of the United States. Granting his practice of politics, granting his errors, granting the existence in him of an unfortunate stubborn will to insist that he has always been right, the record still adds up to something which enables us dogmatically to assert that the good faith of the President is beyond rational dispute--that he is utterly incapable of proposing any such scoundrelly scheme as spending $7,000,000,000 to purchase the election or trying to create a mad boom by destroying the nation's good faith in the solvency of its currency. The first consideration in his mind, we believe and state flatly, is the welfare of the country, in the future as well as in the immediate present--and he indubitably believes that his policy is the policy best calculated to serve that welfare.

About as bad as the utterances of General Johnson were those loosed Monday by Governor Olin Johnston of South Carolina. He said that he would be a traitor to the people of South Carolina if he did not hasten to endorse the spending program in toto. And from that he went into a long, swooning encomium of everything the President has ever done, ever proposed to do, or ever will propose to do. Here, he argued in effect, was the Bayard of the Poor, the most perfect knight sans peur et sans reproche, who could never do wrong. And whoever opposed him or criticized him in any respect was necessarily a scoundrel in league with the oppressors of the Poor.

There is entirely too much of this thinking in extremes right now. Which is to say, of course, that there is entirely too much thinking with the emotions rather than the intelligence. Mr. Roosevelt himself has been sadly guilty in times past. But in his last speech to the nation he was temperate and reasonable. The Johnsons and the Johnstons would do well to emulate him. Discussion in terms of black and white, of allegations that patently are absurd and of gushing adulation, help not a whit to solve anything, but on the contrary only heap new confusion on confusion.