Evening star. [volume] (Washington, D.C.) 1854-1972, 1933-07-23
Revived Speculative Mania
Suggests Dangers of I'M
piled Initiation.
MANY RETURN TO JOBS
UNDER RECOVERY PLANS
Most Business Men Make Every
Effort to Back U. S. Program, but
Labor Strife Is Expected.
By CHARLES F. SPEARE.

ny NhhhAES r. SfkAhk.
Special Dispatch to The Star.
NEW YORK, July 22.-This has
been a week Of striking episodes and
Of significant movements in securities
and in commodities. It also has
brought nearer to climax some of the
efforts under way for effecting indus
trial recovery, with immediate and
drastic proposals in prospect
The net Of 1t all is a greater amount
Of confusion over the trend of specula-
tive markets, but at the same time
growth in the respect of the business
world for what is being attempted to
increase employment and improve pur-
chasing power and in the willingness
shown to cooperate with this program.
The centrifugal force Of a stock
market, excited by a revived pubic
gambling mania. threatened to do great
damage when 1t got out Of control at
midweek It suggests the danger that
implied imitation may do. The admin
istration and its advisers apparently
had not realized the extent to which
the American people were prepared 10
renew the game they had played in
1929 and to carry it nearly to the
extremes of that year.
Washington Gives Cue.
It has been many times proved that
the exchanges delay action until too
late. After three lean years, why should
they interfere with a trading momen-
tum that was rapidly restoring the
capital losses of that period? Obviously
Washington was in a ticklish position.
for, if it suggested that prices we're
rising too rapidly, it might put crlmp
in its recovery plan, which cannot be
embarrassed by any suggestion OF de-
feat
Wall Street, therefore, had marched
ahead confident that 1t could 60 to any
reasonable lengths and not be inter-
fered with. 1t has a right to feel even
more secure in this policy, since Sen
ator Thomas has notified the authori-
ties in New York and Chicago that they
must limit the loss in any stock or
commodity in any one session. No at
tention, however, was paid to this. as
the collapse ON Thursday and Friday
was worse than that of Wednesday.
Yet it must be apparent that b re-
covery in common stock circles OF more
than 100 per cent since March has
many times outdistanced the improve
ment in trade and that q substantial
reaction would give q healthier and
more genuine aspect to the general sit
uation whisky" stocks, of an aver
age of 40 per cent in a few days, and
wheat and other cereals down IS cents
a bushel indicate the intemperateness
Of the recent speculation.
Industry Moves Forward.
The significant and sound events of
he week are to be found in the progress
Of industry. Large numbers of un-
employed have been returned to their
jobs. Wage increases are taking place
all along the line. The records OF
enterprises having the broadest scope
show that demand is increasing under
the urge of replenishing exhausted
stores OF goods, as well as in antici-
patton Of higher prices in the Autumn.
It Is only necessary to examine the
June earnings Of the railroads, the
latest figures Of the power and light
companies, those Of the iron and steel
and lumber mills, of the textile manu-
facturers, makers of automobiles and
OF the wholesale and retail merchants
to confirm this fact.
In most instances business men are
making every effort to insure the sue
cess of the recovery scheme.
1t is not vet certain that the diver
gent PHILOSOPHERS of capital and labor
Already there are dissenting views ana
a militant attitude on the part of union
labor One finds among bankers the
fear that the labor strife may be even
more severe in the new regime than
while industry was operating under the
old individualistic system.
It is not too early to prepare the
business world for permanent accept
ance of many forms of controlled In
dustry that are being adopted to over
come an economic crisis. The influence
of the different administrators, whose
power today is supreme, will long out
live the period for which they were
originally appointed. The railroads, for
instance, never will again have the in
dependent management under which
Rhey reached, within one decade, the
highest earnings in their history, and
the smallest. No one can yet esti-
mate the effect of this on equity issues.
Bonds Show Vitality.
Certainly the bond market is giving
good account of itself. Even the
speculative group was little disturbed
by the violent fluctuations in stocks
this week. After a 20-point average
advance since March, 1t maintains It's
vitality to surprising degree. Like
the stock market it has outrun the
improvement in earnings on which
bonds that had approached default de-
pend. It has ignored the orthodox
trends of an imitation era. One reason
for this is the absence of any new sup
ply; another the constant absorption
by the institutional buyers, who are
enjoying an increased flow Of funds
into their treasures and who, paying
in deprecated dollars, see no error In
buying dollars that also are declining
in value