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February 17, 1933

It Is proposed that an Investigation be made
of fundament?! factors which may stand in the way of
attaining full employment and a steadily Increasing
national income. Specific recommendations based on the
findings of theee investigations should be made so that
policy might be formulated which would lead to an
increase in the national income. The following are sorie
of the basic questions to which the investigation should
be directed. (Questions marked *** are urgent, requiring immediate study, those marked ** ?re less urgent,
and those marked • are least urgent.)
1. * . h t are the prospects for continued
."a
recovery in 1939 and 1940? Eov 3oor. aay we c:;:^ct the
national income to reach e level of SO billion p ye^r?
.
What are the threats to continue" recovery?
***

2. Which important industries la( ed in the
1335-33 period, making less, than a reasonable contribution to the increase in the national income during that
period? Which Industries were foremost in the recovery?
what can be done to stimulate lagging industries, increasing their contribution to the national ir.cone?

#

3. Kow far is the claim that now Investment
is belnc; seriously blocked by specific Governnent
measures Justified?

#

4. To what extent does new capital investment
for plrnt expansion and new industrial development come
from (a) cash assets, (b) borrowing, (c) sale of enulty
securities? I F thin capital raised through {?) orrrnized
security exchanges, (b) Individuals, (c) banks, (d) other
institutional investors? How do those figures corvprre
with the 1923-?? period and what is their significance?

#

5. To what extent are depreciation reserves
not beinc reinvested?

##

6. Do industries or specific ventures with
reasonably bright r^rospects have p.ny difficulty obtaining the necessrry capital in satisfactory formi If so,
what can be done about it?




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o _

!

••

7. To what extent would private investment be
stimulated vere the Federal Government carefully to delineate the arers of our national economy to which it
proposes to confine its investment program in the near
future, leaving other areas exclusively for development
by
to
—
to

private enterprise? Is it posrible for the Government
specify exactly — by industry, or location or function
the field of investment activity to which it proposes
confine itself?

*••

8. What elements of our tax structure —
Federrl, State, or local — serve substantially to retard
the rro'.:t:. of the national income through their effect on
ccr.sui.rition or new investment? What modifications which
would stimulate the growth of the national income could
be made in (a) upper bracket personal surtaxes, (b) loss
crrryovers, (c) averaging of income, (d) capital fains
taxation, (e) consolidated corporation returns, (f) taxation cf dividends, (L;) corporation undistributed profits,
capital stock or excesc refits taxation, (h) depreciation
allowances, (i) payroll t?xes, (j) sale? and other excise
taxes?

*

9. Would the attainment and maintenance of
a substantially higher national income reouire a change
in the existing ratio of savings to consumption?

*

10. To what extent would a redistribution of
our national income contribute to the attainment and
maintenance of a higher national income?

**

11. The claim is made that privr.te industry by
itself can not profitably absorb current savings. Were
this true, a continued high national income would be impossible unless the Government provided Investment opportunities for capital through public works, etc. What
evidence is there that supports this claim?

*

12. Is there justification for the claim that
Government spendinr on public works or WPA projects results in a decrease in spendinr in behalf of private
enterprise?

***

13. What measures could the Government take,
either directly or in cooperation with State and local
governments to increase government Investments in selflicuidatlnf: enterprises without addin; to the budgetary
deficit?




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14. Which types of Federal Government expenditures operate to increase the national income most and
which least? To what extent is it possible to shift from
those that Increase income lesst to those that Increase
income most?

•••

15. How larre a volume of unemployment must we
expect to make provision for during the next five years,
and what means should be used?

*••

16. To what extent, if at all, does the present
social insurance program constitute a drag on recovery?
What changes could be made that would aid in the attainment of a higher national income?

•

17. Is there a foreseeable danger of inflation
or deflation arising from current fiscal or monetary
policies? What changea in our monetary, banking, and
fiscal mechanisms and controls can be made to improve the
adequacy and effectiveness of monetary and fiscal policy
and the timing of o"or>ratlonR to avoid inflation or deflation?
19. Is th~re a danger that recovery .\P~J be
checked by higher interest rates? What bearing does this
possibility have on Treasury and Federrl Reserve monetary
policies and on Treasury financing policies?
19. How far, if at all, is the existence of an
unbalanced budget a psychological deterrent to recovery?
If the deterrent exists, is it sufficiently serious to warrant an Increase in taxes, a decrease in expenditures, or
both in order to balance the budget? To what extent could
this deterrent, if it exists, be modified by the introduction of -orlvate business concepts into Government accounting?
20. How rapid a reduction in net Government
expenditures would be consistent with a continuation of
private recovery?
21. Would a substantial increr.se in the public
debt have any important effect on the public credit?
22.
public debt?

What is the burden and incidence of the

23. Are monopolistic practices such as Drice
production, and patent controls retarding investment or
consumption? If so, how might such controls be removed
modified, or offset?
'



- 4 **

24. Would the collection and publication of
current information on inventories, new and unfilled orders,
etc., lessen the clanger of over-production which results
only in excessive Inventory accumulation?

**

25. To what extent, in what fields and with
what effects on our national income has the Oovcrnr.ient
contributed to an uneconomic price structure, and, if
there are harmful effectn, hoi-: can they be eliminated?

*

26. Is expansion being retarded by lack of
skilled labor? If so, how can we correct the situation?

*

27. Are particular wage rates, labor laws, or
labor practices — such as union apprenticeship, membership requirements, or output controls — acting as
deterrents on recovery?

***

23. For what specific products can we expect
a substantial Increase or decrease in exports during the
next two years? What, if any, removable obstacles lie
in the path of important Increases in our total exports?

**

29. What steps can be taken to protect
economy from possible adverce developments abroad
from (a) foreign exchange developments, (b) trade
exchange policies of other Governments, (c) war
(d) international capital movements, (e) business
sion abroad?




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