Evening star., 1933-07-16
Weekly Review Shows Public
Is Strongly Behind Re-
covery Program.
DECLINE IN CURRENCY
BRINGS INITIATION DOUBT
Momentum of Trade Increasing.
Securities Markets Are of
Less Positive Character.
BY CHARLES F. SPEARE.

BY CHARLES F. SPEARE.
Special Dispatch to The Star.
NEW YORK, July 15.-Emphasis has
been placed this week on industrial re-
covery, rather than on exchange fluc-
tuations, although these have again
been violent and the discount on the
dollar has run in excess OF 80 per cent.
It is fair to separate the administra-
tion program into two parts and TO
Judge each on its merits. The more
and controversial deals
with the devaluation Of the dollar. The
more practical. and the one with which
the larger body of opinion is most In
sympathy, has to do with measures
for stimulating production. increasing
employment and enlarging the pur-
chasing power of the mass OF the peo-
ple. This effort is understandable, 1t
is clear and concise in its purposes
and it he's a direct social, as we'll as
economic aspect.
Textile Code Step Forward.
The code Of the cotton textile in
dustry just adopted and accepted by
President Roosevelt Is the longest step
forward in industrial relations that has
been taken in this country in a gen.
Grafton. It should be made perma-
nent, not a means alone for coping
with temporary emergency.
One may subscribe heartily to this
portion of the general recovery cam
paign. It is essentially domestic In
character. In a degree 1t is expert
mental. There is enough resistance to
it to defer its anticipated early results.
DIT &c h c
If it is accepted generously it should
not only alleviate much of the present
distress, but afford protection to en-
ployers and employees for many years.
We have entered new industrial era
in which revolution can only be avoid
ed through close cooperation between
all agencies dealing with capital and
labor and where the profits of indus
try are more eQuitably distributed.
Uneasiness Over Dollar.
The production and employment
phase of the recovery effort Is In har-
mony with the natural improvement
that has been taking place since the
tain amount Of legitimate "priming"
necessary to start suction at vital
points. 1t is more easily controlled
than managed currency" There Is
not much danger that factory output
for any length of time will exceed con-
sumption. certainly none that wages
will be forced to too high level.
On the other hand there is already
evidence of uneasineSs over the swift
decline in the dollars value. When
Congress gave the President power to
initiate by a series of financial opera
tions, it had no thought that the dollar
would drop SO quickly and with so little
exercise of his authority. Neither did
it anticipate such rise in securities
and in farm products as has occurred.
accompanied by only small amount
of buying of Government obligations
by the Federal Reserve banks. 1t mis-
Judged the extent to which the coun-
try was Debated and had begun to re-
cover its health, and the fact that it
did not require the different medicines
prescribed for it. The error OF the
moment is that of persisting in the
first diagnosis and feeding of strychnine
pills to a patient with strong heart
and quieted nerves.
Less Aggressive Attitude.
There has been some evidence this
week that the Government recognizes
this and is becoming less aggressive in
its initiation policy. 1t certainly must
consider the effect Of rapid advance
in prices of essentials on public whose
earning power is still low and which has
very little reserve with which to make
purchases. The rise in bread prices has
already brought forth official proclama-
tions, though there seems to be great
inconsistency in condemning the bakers
and at the same time continuing the
policy and raising the price
of -four, when wheat has recovered on
a crop shortage we'll above the fixed
goal. The dilemma of some OF the
Industries is that the price schedules
which they expect to establish in the
early Autumn on goods recently pro-
duced may not fit the public pocketbook.
Effect ON Foreign Trade.
Unless a balance is established be-
tween costs and prices and average
buying power, little has been accom-
plished. The harm of mechanical
imitation is that it is likely to get out
of hand and that speculative interests
may insist that it be exended SO they
may have an opportunity to come
clear from their commitments. This
was recognized by Neville Chamberlain.
chancellor of the British exchequer, in
ernment this week.
The English pound has advanced to
about its normal quotation. though not
to its gold parity. Its discount actually
is slightly more than that of the dollar.
But the present rate throws all ordinary
commercial transactions in sterling into
confusion; in fact, with European ex-
changes huctuating widely from day to
day, the opportunities for foreign trade
by American importers and exporters
are small. There is no more evidence
that overseas trade by the United States
will be increased by deprecated dollars
than there is in the experience of other
countries that have abandoned gold.
Rise in Farm Crops.
The outstanding advances in cotton
and wheat since April have been related
either to a reduced acreage by plan or
a diminishing crop from the effects OF
drought. Most of the rise of over 100
per cent in cash wheat, corn, rye and
oats since the low prices OF January or
March has been caused by weather con-
ditions of unprecedented severity, which
will cut down the total cereal crops this
year by over 1000, 900 900 bushels.
Compensation for this to the farmers
will come from higher prices. To date
the rise in market value Of what he has
to sell or what he expects at harvest
has been much greater than that for
the commodities he buys. This modifles
cne of the distorted economic situations
involved in the national problem. It
should not only improve industrial con-
ditions, but lessen the need for adjust
ments on farm property and relieve the
condition of many banks in the agricul-
tural sections. For the railroads it is q
misfortune, for loss Of tonnage Of wheat
Is never Offset by gains In the movement
CONTINUED On Fourth Page.)