Evening star., 1933-12-17
Gold Price Left Unchanged
as Natural Recovery
Gains HeadWay.
U. S. FINANCES ATTRACT
INCREASING ATTENTION
Cost of Federal Loans Mounts With
Huge Expenditures Planned
for Next Year.
BY CHARLES F. SPEARE.
Special Dispatch to The Star.

SbSSAd4 O4opdICI1 10 ne star.
NEW YORK, December 16.-The
charts from which a reckoning must be
taken of the Roosevelt money program
indicate that it has come to a turn
IN the road. The gold price throughout
the week has stood at the figure of De-
cember /. The commodity index is a
trifie lower. The average of common
stocks has varied little from that of a
week ago. Corporation bonds are some
what higher. The Government list has
been steadier.
The most satisfying feature of the
period is to be found in the statistics
OF business, which indicate progress
In a number of ways; also in the
steady influence Of a natural recovery
on situation that some time ago
passed out Of the phase of complete
defation into one of gradual recuper-
alton.
Naturally the long pause in the gold
marking-up policy has strengthened the
belief that stabilization of the dollar
Is approaching This is the hope of
those who regard such a readjustment
as the least of the evils associated with
change in the monetary base. On
the other hand, the suggestion that
the dollar may be fixed somewhere
near the present level in terms of for
eign currencies has brought forth
strong protests from those who are
convinced that no good can come from
program that stops short of a so
per cent devaluation. They are par
ticularly irritated by the suggestion
that the dollar and the pound sterling
may be linked together in a stabiL-
zation process. All of the evidence is
that the conversations" on this ques-
ton originated in Washington and not
in London.
Federal Financing Problems.
The lull in the gold price movement
has directed attention to other aspects
of the Governments financial affairs.
These are budget-making days in
Washington. The figures representing
the needs Of the Treasury for the fiscal
year ,1934-35 are staggering. 1t has
been evident for some time that ap-
propriations by the last Congress would
not be sufficient to carry on the work
of direct relief or ample satisfactorily
to revive. the Capital goods industry.
New quotas will therefore shortly be
set up. The question is pertinent as to
the method by which they will be
raised and their ultimate effect on
Government credit.
The cost of Government loans has
been steadily rising since October. The
market for outstanding paper has been
frequently depressed. New issues have
gone to considerable discount. The
Treasury faces payment in the next
| few months of about $l,000,000,000 Of
the fourth Liberty Az per cent bonds
| that were not exchanged into the new
| 4E-3i4 per cent issue.
The tax situation is another phase Of
! the Government fiscal program exciting
attention. If the maximum returns
| from liquor revenues are realized. the
! net gain to the Treasury from them
will be between $500 000, 900 and $780,
! 100000, as special emergency taxes now
in force are to be abandoned next year.
The increase to June 80 from the larger
volume of corporation earnings will be
helpful, but the indications are that
| personal income taxes will again be dis
appointing. Consequently, a further
rise in normal and surtaXes cannot be
avoided Social relief is necessary. But
it does not come down like mama from
the skies. 1t is expensive. The tax
payer has to cover the bill.
R. F. c. Program Changing.
The argument by which the Recon-
Struction Finance Corporation sought
to justify its original per cent charge
for loans to corporations, when it was
borrowing at an average half that
amount, was that it must provide earn
| ingS to offset probable losses on these
loans, Most of its commitments were
of self -liquidating character and sup
ported by collateral. Substantial amounts
already have been paid down on them.
The opposite of this financial pro-
gram is now taking place. Much OF
the work of public nature, paid for
by Federal funds. cannot be conceived
as necessary or of permanent value by
| the most charitable estimate of it.
There is no salvage in dollars to the
Government possible from it. There is,
however a more important recovery in
sustaining the morale of many millions
of men and, thereby, avoiding social
consequences that might be expensive
| to the country
Our problem is not unlike that of
Great Britain's after the war. We have
! met it in different way. The English
pay their unemployed sufficient to sus-
tain them in essential needs and to
maintain their self-respect. They do
not compel them to work out their
gratuity Our method of requiring the
recipient to work his way to his pay
check seems much the better of the
two, even though there is traffic
futility in much of the labor involved.
The important point, from the stand
point of Government finances. is that
both policies have to be supported by
Government funds. which are provided
by those who still enjoy moderate or
large incomes.
Retail Trade Expands.
Even if the labor of those employed
by the Civil Works Administration is
unessential and the additional forces
required to meet the N. r. A. codes
represent an management surplus, it
is fact that what they are paid each
week Is bringing direct aid to the re-
tail trade of the country and gradually
spreading its influence to the larger
industries. Further proof of this is to
be had this week in the reports from
most sections of the country where
holiday trade is the best in several
years.
1t is significant that in the States
where farm products determine the
buying power of the people, the store
volume has risen appreciably since
Summer. Brisk Winter weather in the
East has greatly aided the retail turn
over. There is more spending by those
who a year ago had sufficient resources
but were unwilling to draw on them
through fear of what lay ahead in the
banking world.
(Copyright, 1880