Trouble; No Trouble

James Andrew Moffett, onetime vice president of Standard Oil of New Jersey, is a member of the Roosevelt Administration to whom most businessmen look with rousing hope. The Federal Housing Administrator, who speaks their language, has taken the lead within the Government of rallying chat conservative opinion which believes that sound recovery must wait on private capital, which opposes huge Federal expenditures that put the Government in competition with private business and frighten off the first faint flutters of returning business confidence. The other school of New Deal thought favors spending Federal funds on a grand scale for maximum social results. To the latter school belongs Secretary of the Interior Harold Ickes, New Dealer pure-of-heart and dour-of-tongue, who believes in "letting the Government do it" rather than in the Moffett philosophy of "let business have a chance first." Last week these two basic policies collided amid a shower of New Deal sparks.

Secretary Ickes, gathering newshawks around, began to talk further of his plan of "going the whole hog" on low-cost housing. He wanted one or two billion public dollars to erect houses and apartments to rent for around $5 a room. Said the Public Works Administrator testily:

"I've seen no evidence that the holders of private capital are ready to use it. We can't sit around indefinitely waiting for private capital to get going. ... If private industry charges rates socially too high, why shouldn't we compete? . . . We could build very attractive houses at a low rate of interest. We've been paying 3% for money, whereas private financiers have to pay much more. Conceivably we can make an agreement with labor so that we can pay lower rates and offer year round work."

Next morning at breakfast, when Mr. Moffett read Mr. Ickes' words, his food lost its taste. Having got his home modernization campaign well under way, he was about to launch his bigger drive to encourage private capital to build new houses. Only two days before he had told the Press that private capital was beginning to come forward in a big way, that already he had applications for insurance of $102,000,000 of mortgages, most of them for low-cost housing projects.

The thought that Mr. Ickes meant to scare house builders off by threats of competition turned Mr. Moffett cold with apprehension, then warm with resentment. The usually mild-mannered FHAdministrator went to his office, summoned newshawks, and told them what he thought of Mr. Ickes' remarks:

"Such a plan would wreck a 21-billion-dollar mortgage market and undermine the nation's real estate values. The National Housing Act was designed to take care of all housing operations. ... If the Government steps in now to finance housing projects, when private capital is able and willing to do it, our whole program will be wrecked."

The New Deal's teamwork certainly was not clicking. The team's captain could not afford to let the impression get abroad, least of all at a time when he was trying to get U. S. businessmen in the bleachers rooting for his side. Messrs. Ickes and Moffett were summoned to the White House and a three-way telephone connection was put through to Warm Springs. After a few minutes Messrs. Ickes and Moffett stomped out of the White House. Three-quarters of an hour later the President's second assistant secretary, Stephen T. Early, issued a statement signed with their names. Drawing a nice distinction between the Housing Administration, which aims to help people "who still have some borrowing power" and PWA which aims to help people who "could not fall into the category of those who are being helped by the Housing Administration," the statement made out that Messrs. Ickes and Moffett had no differences, that a vicious Press had misconstrued their fighting words:

"It seems a pity that either misinterpretation or a desire to stir up trouble where no trouble exists should have given rise to stories which create the impression that there is a divergence of views. . . . We decline to furnish the material for a Roman holiday for those who are trying to create this impression."

Upshot was a flimsy agreement whereby Mr. Moffett would see what he could do with private capital before Mr. Ickes takes the field with his Government billions.

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