Evening star., 1932-06-01
|MPASS|VE SENATE
HEARS PRESIDENT
Spirit Friendly but Need for
Action Appears Little
Understood.
BY MARK SULLIVAN.


As respects much of the Senate as
they listened to President Hoover's
speech. one would say that Europe can't
bluff them by selling American securi-
ties. and withdrawing gold from Amer
lea, ana selling the dollar short. On
the other hand, the impression of I'M
moved placidity made by the Senate as
it listened to the Presidents speech may
be incorrect. The appearance was dis
tinctly not one OF unfriendlineSS to the
President, but rather of impaSSlveneSS.
At the conclusion all, Democrats and
Republicans. arose and applauded. 1t
was observed that those who took the
lead in the gesture which led to ap-
plauSe were two Democrats. One was
King of Utah, who seemed on this Oc-
casion to have sense OF the slgnlh-
canoe of what has been happening
atout the country's credit structure.
The other was J. Ham" Lewis of Illi-
ncis. whose perceptions would naturally
sense a dramatic undertone earlier than
others and whose fidelity to fitness
would cause HIM to take the lead in
applaudlng a President doing an eX-
traordinary thing, even though the
President be of the opposite party.
Emergency Clearly Given.
It NAV be the Senate failed to grasp
the urgency implicit in the President S
action. His speech as a whole was
rather technical because he explained
in detail just what the present trouble
is and Just what must be done, the
whole amounting to two steps, one, pal
ance the budget, and, two, do 1t quickly
Almost any one, however, should nave
been able to observe that the first
phrase in the Presidents speech was
IAN emergency has developed Almost
any one should have observed the note
of immediacy and elOquenCe in the
Presidents closing sentences beginning
In YOUR hands at this moment is the
answer to the question whether democ-
racv has the capacity TO act speedlly
enough to save itself in emergency.
It is true the situation which caused
the President to act is little under
stood. The details of 1t appear IN the
newspapers only in the form OF op-
scure items about such things as gclo
shipments. What is happening is that
Europe has come to the CONCLUSION that
the United States is not going to bal
ance its budget. Europe has watched
Congress sit since the 7th of Decem-
Der without balancing the budget.
Europe has seen the House kick to
pjeces a tax bill written BY the leaders
of the party that controls the House.
Europe has similarly seen the House
take an economy bill which would have
saved S250000.000 and reject all the
savings except about S50.000000. Eu-
rope seeing these things has concluded
that Congress never will balance the
budget. Many of us in America may
have confidence. but Europe is hysteri-
cal about things like this. Europe re-
members what happened to the Ger
man mark. and the French franc, and
even recently. to a Slighter extent, the
British pound. Europe thinks some
thing like this is going to happen to
the American dollar. We may know
this is fantastic but Europe doesn't
know it. AS President Hoover eX-
pressed it, Fears and doubts have been
foolishly exaggerated in foreign cOun-
tries" AS a matter of fact. some in
America have been infected by Eu-
ropes fear.
Moves in Vicious Circle.
The effects of this take place in
sequence which at the end of the cir
Gle results in more unemployment and
lower prices for farm crops and every
other commodity. Europe and some of
sell securities. Sale of securities causes
lower prices for them. Lower prices
cause securities to become inadequate
as collateral for loans in banks
The banks feel obliged to sell these
securities. This sale, in turn. further
depresses price and the banks must
close out new set of loans. Thus the
vicious spiral takes a glide down to
lower level. That is what has hap
pened during the last few days Eu-
ropes fear about the American dollar
is retarding recovery from depression in
DeS Moines, Iowa; Decatur, Ill: Water
town, N. Y, and every other American
city and town.
The only remedy is to rid Europe of
its fears. The way to do that is to
convince Europe that the American dol
lar and the American Governments
promise to pay are going to be kept
sound. The way to do that is. as Presi-
dent Hoover put it, Ito place the
finances of the United States on an un-
aSSallable basis" The way to do that
Is to balance the budget. Finally, as
Mr.. Hoover put it, time is of the es-
sence: every days delay makes new
wounds"
1t is impossible to doubt that ulti-
mately Congress will do the needed
thing To assume otherwise would as
sumo pretty serious trouble ahead. Con-
gress will only act, however if there
IS sufhclent pressure of public opinion.
Lacking pressure from the country as
whole, Congress will continue to obey
organized minorities who resist econ-
onieS. 1t is certain the pressure from
the country will come