Changed Tunes

Among the more arresting phenomena of current U. S. political life has long been the relation between the country's most important man--Franklin Delano Roosevelt--and its most important activity-- Business. Business has been apt to regard Franklin Roosevelt as a malicious ogre who has its fate in his perverse hands. Franklin Roosevelt has appeared to regard Business as a malevolent force, somewhat parallel to original sin, which cannot be wiped out but should be perpetually chastened. In this strange misapprehension, the gravest flaw is obvious: it does not approximate reality. Last week, in the light of glaring facts, the President and Business were forced to see each other in better perspective. Results of the mutual reinspection were practical and ironic.

The glaring facts which forced a change of viewpoint were: 1) the stockmarket slump that had reduced paper values $25,000,000,000 in ten weeks; 2) growing fears of a major business recession. The results were: 1) an immediate move to give relief to Wall Street stock traders; 2) clear evidence that New Deal was giving thought to helping Business and Business was beginning to regret the bitter things it had said about New Deal spending. During the week, the Federal Reserve Board loosened margin requirements,, effective Nov. 1, thus carrying stocks through their steadiest week in two months (see p. 59). By week's end, Washington was seriously considering the possibility that Congress must soon revise and modify the capital gains tax and the undistributed profits tax, which Business bemoans as a stumbling block to recovery.

Not a word of this did Franklin Roosevelt allow to creep into his public utterances. Business has never been the favorite child in his political family. That place has been, reserved for Business' weaker brother, the underprivileged "one third" of the U. S. population ("ill-housed, ill-clad, ill-nourished"). The President was at pains not to show any signs of changed feelings.

At Hyde Park, he had a succession of callers including Joseph Kennedy of the Maritime Commission; Chairman Douglas of the SEC; Board Chairman James Handasyd Perkins of Manhattan's National City Bank; Broker Paul Shields of Shields & Co.; William Averell Harriman, board chairman of Union Pacific Railroad and head of the President's Business Advisory Council. That these business-minded visitors talked about means of easing up on New Deal restrictions on Business, both Franklin Roosevelt and his callers solemnly denied. Confronted by Washington reports of tax revision, the President avoided endorsing them. Instead, he told his press conference that the reports were written from the point of view of those-who-have rather than of those-who-have-not--who were, said Franklin Roosevelt, still his major concern.

But last week Washington knew that the New Deal was suddenly feeling a new pressure, not primarily from big business but from all those who fear a business recession--a force so general as almost to amount to a pressure of circumstances. For even the left wing of the New Deal was alarmed by the possibility of a slump and Franklin Roosevelt's attitude appeared to reflect a tacit change. Likewise modified was the attitude of many a business man who has groaned because of unhealthy Federal deficits. The President last week reiterated his intention of balancing the budget in 1939, had a long Hyde Park conference with Chairman Marriner S. Eccles of the Federal Reserve Board, Secretary of the Treasury Morgenthau and Budget Director Daniel W. Bell. Fearing the medicine of reduced Federal spending more than the disease of unbalanced budgets, businessmen, like the New Deal, began to sing a different tune. P: In Boston, where she went to visit her son John, convalescing after the removal of four wisdom teeth, Mrs. Roosevelt said to a group of cameramen: "I should think you'd get tired of taking my photograph." Said a rude photographer: "We do." P: Later in the week, in her column My Day, Eleanor Roosevelt wrote: "I ... drove over ... to talk for a few minutes with the Prime Minister of Norway, the Norwegian Minister and his wife. They were lunching with the President. . . ." Mrs. Roosevelt would have had a long wet drive had she indeed gone to see the Prime Minister of Norway, Johan Nygaardsvold, for he was last week attending to his business in Oslo. The gentleman with whom Mrs. Roosevelt chatted was Norway's Minister of Foreign Affairs, Halvdan Koht, who is visiting the U. S. to confer with Secretary of State Cordell Hull about a new trade treaty with his fatherland, and to give a series of lectures at Harvard and Columbia. A kindly, wire-haired Socialist of 64, Dr. Koht lectured at Harvard seven years ago, predicted much earlier, in a book, Capital and Labor in America, that the U. S. was drifting toward Socialism. Said Dr. Koht last week before his visit to the President: "And so today do I think that the trend of your government is towards a socialist form."

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