Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-05-05
BUSINESS REVIVAL
!. IS STILL IN FUTURE
Government Officials Appear
| Confident That Recovery
Will Set in Soon.
BY DAVID LAWRENCE.

Puzzled by the fluctuations in the
stock market, the administration Is still
hoping that the words of President
Hoover about the passing of the worst
phases of the business situation may be
realized.
The disposition Is to regard the break
In the market as due to the sudden dis
covery of what really happened in the
first quarter of the year rather than to
any anticipation of what is going to
happen. Evidence of how bad business
Jared in the first three months of 1880
is now in hand in the form of quar-
terly reports from corporations. Two
hundred corporations representing va
riety of different businesses, for ex-
ample, showed net profits in the first
quarter this year of $293,000,000, as
against 1862 COO, 900 in the first quarter
Of 1929, which means a decline Of about
10 per cent.
Capital Return Smaller.
The interesting thing is that the
identical companies in 1928 had COM
bined net profits Of $3.50, 600, 900, so that
1880 actually shows gain of approx
mately 4 per cent over 1928.
In many respects 1929 was an alb
normal year, and II the remainder Of
1890 can keep up with or show q gain
over 1928 1t will be felt that the United
States has come through its depression
with remarkable vitality.
Owing to increases in outstanding
capital and surplus the first quarter of
1890, however. represented a return OF
2.S per cent on net worth, as compared
with 80 per cent for the first quarter Of
1928, and compared with 3.9 per cent in
1929.
There Is no doubt that the admins
txation Is nervous about the business
situation. A continued drop in the
market would, 1t is feared, mean o con-
tinued loss Of confidence. Somehow or
another the public has accepted the no
ton that the President can steer the
country to economic prosperity, and the
rather optimistic speech which Mr..
Hoover delivered last week, together
with q reduction of rediscount rate
both of which were heralded as favor
able signs, have now been more or less
weakened in their effects by the be-
havior Of security prices.
The truth, of course, Is that the
administration is viewing matters in q
longer perspective than Is the stock
market. The Government Is looking
for better conditions in the Autumn,
while the security prices reflect the i'm
mediate past or the immediate future.
Effect Of Unemployment.
The theory that the second quarter
will be only slightly better than the
FIRST quarter, but that the Autumn of
the year should see an improvement
on the first six months, and that the
last quarter will see substantial i'm
provement in business is tenaciously
held by Government officials, not few
of whom admit, however, that the wish
Ia father to the thought and that, I'M
less there is decided improvement in
business the country is apt to vote in
O Democratic Congress as an evidence
Of discomfort.
Widespread unemployment in q cam
paign year has always been associated
with q negative verdict at the polls
against the party in power. President
Hoover has had many troubles, but
none would be as disconcerting as to
have the country theoretically vote
lack Of confidence through election OF
q Democratic Congress.
Notwithstanding the perennial de-
bate as to what q President has 70
do with the economic ups and downs
Of country the administration has
been compelled to accept political re-
sponsibility for things as they are. This
is due partly to the promises OF the
that the President himself took the
leadership in the business situation that
followed the stock market crash. Con-
fidence prevails that the country will
work out of its difficulties toward the
end Of 1880 and during 1881, but from
o political viewpoint it is questionable
whether the upswing will come in time
to help the administration in congress
sional elections. II Republicans can
hold control and lose only q few seats
In November they are confident that
bv 1892 the business conditions will
have righted themselves.
Meanwhile the opposition is making
the most of its opportunity and drive
has already begun against the new
tariff bill on the ground that II Presi-
dent Hoover signs 1t the measure will
help to increase the cost Of living.
(Copyrisht, ls30)