Evening star., 1932-09-08
RECOVERY IS SEEN
PAST FIRST STAGE
Early Phase Believed Ended
When Fear of Dollars
Collapse Ceased.
BY MARK SULLIVAN.

The Washington authorities, whose
concern is the state of business, regard
it as now between the first and second
stages of recovery. The first stage is
the recovery from extreme depression
and panic. That this has securely
taken place is now universally accepted.
There is practically no person of stand
ing. either in the Government or in.
business or among economists in COL
legeS, who now doubts that the panic
conditions Of last May. June and early
July are completely over ana will not
return.
The main characteristic of that con-
dition of two to three months ago was
fear entertained in all parts of the
world that the American dollar would
go off the gold basis as the British
pound did almost exactly year ago,
and that this would cause in America
a collapse of peculiarly disastrous pro-
portions. This fear came to an end
about the time of the adjournment Of
Congress on July 16 and in large part
because of the adjournment.
Feared Action of Congress.
The fear about the integrity of the
dollar was based on apprehension that
Congress would not act courageouSly to-
ward balancing the budget, that it
would not lay sufficiently heavy taxes,
that it would not practice economy and
that 1t would make vast appropriations
of Government money for unremuner-
ative purposes. When Congress, largely
because of pressure from the President
and public opinion. did not do the
things that were apprehended, fear
about the dollar and the gold basis
ended.
Secretary of the Treasury Mills esti-
mates July 27 as about the date that
marked the ending of that final phase
OF the depression, so far as it is possible
70 flx date for anything SO intangible
as the conclusion of a State of fear.
After Secretary Mills and Governor
Meyer of the Federal Reserve Board
we're satisfied that the final spasms of
the depression was over and that it was
really final, number of persons in the
New York banking world continued to
apprehend that there might be a fur
ther CONFUSION. The question was
enoed largely by change of mind in
Europe, which began to buy American
securities and to ship gold to America.
Many Of those who continued skepticai
until the middle of August or later now
announce they are converted.
Ihere Is practically no one in any
area OF serious thought who doubts that
the depression is ended in the sense
that the worst phase of it is securely
past. Practically no one doubts that
the rises which have taken place In the
prices OF securities and goods are ius-
tlned by the rebound from the final ex-
IRENE stage OF depression. Practically
no one doubts that the rises So far at
tanned will, on the average, remain or
go farther. All this is, of course.
wholesome turn of events and iustif1es |
the more cheerful state of mind in
which the country has been for some
Two or three weeks since the turn was
generally recognized.
Second Stage Remains.
There remains, however, the second
stage OF recovery. 1t consists of the re-
sumption OF manufacturing and other
business and of employment, in the di-
rectlon OF normal volume. About the
extent to which this has taken place.
or how soon it will take place. and how
rapidly 1T will proceed when once under
way. there is difference of Judgment.
everybody agrees that it will take place |
An tne dlfterence of opinion is about |
how soon and how rapid it will be
Some are confident that the beginning |
has actually taken place in a small way |
and that 1t will go forward with rather |
sensational momentum. Others more |
skeptical judge that the increase in |
volume Of business this Fall will be |
comparatively slight and that the real |
forward surge will come in the early |
Spring. So far there is not SUFFICIENT |
tangible data upon which to base a |
judgment.
Last Monday, Labor day, is tradition |
ally the date assumed to be the BEGIN |
ming Of the Fall season. 1t is vet too |
early for actual statistics Of accomplish |
ment to emerge. All that can be said |
yet Is based largely upon observation. |
Observation reports that there Is mate |
nal increase in volume of activity.
Upon one factor in the outlook there |
Is practically universal agreement. The |
momentum of volume of business, once
1t gets under way, will be rapid and will |
go far. To an extreme degree, shops |
are without finished goods. factories and |
mills without raw materials. There is |
what must soon be recognized as, in |
effect, famine of goods It is, so to |
speak, an accumulated deficit caused by |
nearly three years of subnormal activ- |
1ty. Sooner or later this will be filled |
by burst of activity which will do |
something like three years of normal |
business within the space Of one.
Copyright. 1927