Evening star., 1933-02-06
IMITATION SCARE
sDELAY|NC BUSINESS
Financial Circles Awaiting
|. Action of Roosevelt
= and Congress.
BY MARK SULLIVAN.

------------
.ss~ BY MARK SULLIVAN.
- Financial communities in the Unite
Estates and Europe, watching the Gov
zsernn1ent at Washington, are fearful tina
q the Government may initiate the cur
h rency by issue of money not protecte
e by gold base. A more accurate de
scription of their state Of mind woul
i say they are waiting cautiously unit
p~they can feel sure there will be n
= imitation. This relation between financ
land politics, more than any other on
N~dactor, accounts for the present phas
~asof business. It is the suspense tina
A,-makeS for inactivity. IF imitation wer
a absolutely certain, there would be bust
1 ness activity taking ore form. If ad
herence to the goldpstandard were abso
Z lutely certain, there would be activit
Ttaktng another form.
~. The answer depends on President
seselect Roosevelt. That there will be N
= currency initiation under Mr. Hoover i
) fully taken for granted.
Mr. Roosevelt and the Democratic
platform are specifically pledged t,
Il maintain, in the platforms language
-sound currency at any cost" TIL,
senervous financial communities do no
r coubt Mr.. Roosevelt's fidelity to tha
Z pledge. The pledge has been repeated
by Mr.. Roosevelt to financial leader.
: who have talked with him. That Mr.
Roosevelt will be sound money Presi.
-.dent is not to be questioned.
ss@ Pressure Is Feared.
I y Whence comes, then, the caution o.
those who still wait to be sure? Par
2 OF 1t arises from wonder whether thC
a pressure may be SO great that Con.
= gress would enact imitation of cur
: frency over Mr.. Roosevelt's veto. To de
s.that would require two-thirds of Con.
Z gress. On paper, as matter of figures
= this is just family conceivable. The
new Congress, especially the House
3 elected in a landslide, and therefore
bringing in many beneficiaries o1
& political accidents. will contain an un-
usual number Of young men, mex
ssperienced men, irresponsible men anc
eccentric men. The total of these
however, will be less formidable than
= Spectacular. Fully four-fifths of the
new House will be the average and
= familiar type. 1t is said that every
new Representative from west of the
2 e Mississippi believes in either free silver
or other initiation Of the currency. Even
$50, the number is small. On the side
@Of faith that initiation will not take
place, it is to be remembered that Mr.
weRoo5evelt will have exceptional powe!
I over his party. For the reason that he
will have a very large amount @.
I patronage to give or withhold, and for
The broader reason that the party will
wish to show solidarity and capacity,
Aethere will be. for some months at least
Ia strong disposition to follow MIR
AsRoosevelt's leadership. The net of all
this seems to point convincingly against
I Imitation.
Al When a nervous leader of the
/ financial community is convinced OF
this, he gets back to his apprehensionS
by another path.
s~% 1t may be admitted that there Is
asome possibility of imitation that is not
direct, but comes about through a
chain of causes.
The budget is not being balanced
I There will be a deficit of about two
billions in the present fiscal year, end
5sfng June 80, next, It is estimated there
will be another of upward Of billion
lin the next fiscal year. To pay these
I deficits, the Government borrows
money. The argument of the nervous
: is that the Gevernment may borrow &c
much as to giVe rise to doubt whether
followed by same consequences which
would give rise to imitation.
Drastic Cuts Foreseen.
- As to whether there will be imitation
by this path, everything depends on
whether the budget will be balanced
s.sThat, again, goes up to Mr.. Roosevelt
sgn his campaign he promised to balance
1.-the budget by, among other means
cutting Government expenses 25 per
Rcent This intention he has repeated
to business men who have talked to
ss11im within week. Consequently the
Intention to balance the budget is not
doubted. But the nervous remain
anervous nevertheless. They say that
cutting Government expenses by 25 per
scent is extremely difficult. 1t involves
among other things, reducing compen-
-Sation to veterans. They fear Mr.
~Roosevelts party in Congress may not
.sfollow him in a course SO drastic.
There is one present condition which
tends to justify suspicion. The present
.aCongress has made no serious attempt
to balance the budget. 1t has laid nc
new taxes. It has made no reduction
In expenses to speak of. When the
matter of veterans pay was before this
Congress, 1t made no faintest gesture
toward reduction. This record of the
present Congress creates suspicion IL
two ways. 1t leaves the deficit un-
remedied, and that is portentous. True
the Democrats are not necessarily
Ncalled on to take responsibility until
they are fully IN power after Mrach
sat this point the suspicious argue
thus: IF the Democrats were really de-
termined to balance the budget, would
@sthey wait until March before doing
anything? If they really meant to cut
s25 per cent from Government expenses
would they not beg n now?"
= Such suspicion is Of course a state
of mind. The state of mind will prob
ably continue until fullhlment by the
democrats begins to appear Enough
sfulfiment to dissipate suspicion may
scome with Mr.. RooSevelt's announce
-ment of his cabinet. If, for example
~he appoints Senator Glass of Virginia
to the Treasury, everybody will know
that the currency Will not be inflated
and that the budget will be balanced
(CODyrieht. 1N23