On the anvil of public controversy President Hoover and Speaker Garner last week hammered out a red-hot campaign issue on Unemployment Relief. The issue: How far should the Federal Government go to take up the burden of private debt?
President Hoover would limit such relief to banks, railroads, states, public corporations. Speaker Garner would extend Federal credit down through industry and private corporations to Governor Roosevelt's famed "forgotten man." Both relief theories are based on the same assumption, namely, that debtors are to be tided over until prices rise to restore solvency. Without that price rise either theory would obviously fail, leaving in its wake a widespread form of government ownership.
The Hoover-Garner battle began when the House & Senate conferees compromised on a general relief bill. President Hoover objected to public works financed by a bond issue as "pork." The conferees agreed to an innocuous $322,000,000 construction program which the Treasury, if it chose, could undertake when it had enough cash. On direct relief to the needy the White House view also prevailed when the final bill provided the R. F. C. with $300,000,000 to be lent to states on the basis of need rather than population. The third provision—R. F. C. loans—was the anvil. The final bill provided that the R. F. C. should lend $1,500,000,000 (the Senate figure) not only to states, municipalities and public corporations but also to private companies, partnerships and individuals (the House clause).
When President Hoover learned of the compromise agreement, he summoned Speaker Garner and the conferees to the White House. At the eleventh hour he wanted the bill revised, private loans eliminated. Speaker Garner, whose own pet idea the loan provision was, told him that Congress had bowed to him on direct relief and public works, that it was up to him to bow to loans. The President refused to bow. After a two-hour wrangle, the meeting broke up inconclusively.
Early next morning there was another White House conference. Again the President and the Speaker clashed. Again each refused to budge. Finally Mr. Garner marched out and returned to the House. There amid Democratic applause he took the floor, for the second time this session, to excoriate President Hoover's ideas of relief. Excerpts:
"We went to the White House. . . . The President said he could not sign the bill. . . . The House has surrendered 75% of its position. . . .
"The issue is this: We're going to broaden the base of the R. F. C. We propose that from now on there shall be no class legislation and no class borrowers.
. . . How can you say it is more important that the New York Central Railroad should meet the interest on its bonds than it is to prevent the forced sale of 500,000 farms and homes?
"I said to the President: 'I'm through with class legislation. You want to lend to the railroads, the insurance companies, the mortgage companies.' His answer was: 'Why, all the people will get a benefit out of it.' My friends, it's too high. The drippings do not reach down to the earth. I want to start at the bottom.