Evening star., 1933-10-08
Fears of Imitation, Strikes
and Wage Price Ratio
Taken in Hand.
SOUND CURRENCY HOPES
REFLECTED IN MARKETS
Natural Recovery Still Continues
in Many Directions Despite
Confusion and Strife.
BY CHARLES F. SPEARE,

NEW YORK, October There have
been many kinds of drives" in the last
six months to revive business Just
now the main drive" is to restore con-
f1dence in the commercial and financial
world That extreme tinlidity has re-
placed assurance in these quarters Is
obvious The change is due to fear for
the currency. to the growing disputes
between capital and labor and to the
increasing disparity between the price
level and incomes.
These adverse influences are well un-
derstood by President Roosevelt and
his advisers. The encouragement re-
fected in higher prices for securities
this week comes from the conviction
that the administration has finally
taken a positive stand against currency
imitation and will adhere to its plat
form for sound money.
Anti-infatiOn momentum Is growing.
The declaration Of President Green of
the American Federation Of Labor that
until we can assure labor that We can
get more of these cheap dollars for the
days work we perform, so that it will
conform to the increase in commodity
prices, it is my Judgment that labor
will stand unflinchingly against infla-
tion," challenges that small group Of
inf1aticnists who have done so much
recently to check the expansion Of busi-
ness and to offset many of the benefits
Of the national recovery act.
So does the positive stand taken in
convention by the American Legion,
which almost unanimously voted against
imitation. The support Of the sound
money cause by these two bodies is Of
immense importance as the battle OF
the currencieS opens.
Monetary Decision Waits.
Rumors have been plentiful this week
that some announcement would shortly
come from Washington defining the
| money policy Of the Government. It
Is presumed that this will emphasize
| the need of stabilizing the currency and
perhaps fix the devaluation level for
the dollar. 1t is doubtful, however, If
We are as near to stabiliZation as Wall
Street imagines. 1t is more likely that
I the decision will be made in December
than In October and that it will have
an intimate relation to the trade now
starting between the United States and
Great Britain over debt obligations
Too many delicate international prob
lens are involved in devaluation to per-
init Of hasty action even though post
ponement may slow down the indus
trial machine. Most difficult to deter
is to be effected and how to anticipate
those features of it that are likely to
react against the sensitive structure of
business
This level is likely to be between go
| and 65 cents. The arbitrary point can
not, however, be fixed independent of
monetary conditions in Great Britain
| and France. The current depreciation
in the pound sterling is even greater
than that in dollars. Devaluation, as
| now suggested, would doubtless be fol-
lowed by a quick and heavy return of
American capital sent abroad since
April If the rate is made too low
there would be difficulty in maintaining
it; if too high it would not accomplish
what Is regarded as essential to the
price level
The acute labor situation calls for
immediate adjustment. This clearly
must come from the administration.
Strikes are daily being called in in
dustries that have been free of labor
troubles for several generations Busi-
ness men. who willingly accepted the
loss of profits imposed by adoption Of
their codes, expanding production and
increasing employment and wages, are
now set against further activity It is
useless to enlarge credit facilities for
their benefit, for they cannot or will
not use them. To the fear of perma-
nent Government interference in their
industry has been added the threat of
its domination by unionized labor. The
N. r. A. has led American business to
water. but it cannot make it drink.
The third difficulty to be overcome is
the lag in incomes in relation to prices.
This Is natural in period of mechan-
1cal imitation. A survey Just made by
the National Industrial Conference
Board indicates that, from April to
July. the business recovery created ad-
ditional purchasing power through
wage level that outstripped prices. In
June, weekly earnings rose 96 per cent
over those of May. In July, the rise
in prices had been great enough to
balance the wage account, and in Au-
gust, the entire trend was reversed,
with earnings under living costs. This
is about the situation today.
Trade Picture Brightens.
Against this picture may be placed
evidence that, in spite of confusion and
strife, progress is being made in many
directions. 1t IS part Of the natural
recovery that is taking place over the
world and which the League Of Ma
ttons report this week indicates was
more substantial during the Summer
than year ago.
For one thing, business failures are
smaller than In years. During 1882,
they were the largest in number and in
liabilities on record Not since the final
quarter of 1880 has there been the
gain in telephone connections reported
by the Bell system for September. Last
months automobile production was
nearly three times as great as in 1882,
and for the first nine months Of 1888
1t gained 81 per cent. Although iron
and steel operations are being inter-
fered with by labor troubles, the ra-
ito Of output to capacity this week was
AZ per cent, compared with 18 per cent
last year. Copper metal is aSous
cents pound. In October, 1892, 1t was
under cents and most mines were
closed. The American Smelling & Re-
flning %. has resumed dividends on its
preferred stock.
i. The latest figures of power and light
production indicate q 10 per cent gain.
However, the outlook for the public
utilities is clouded by rate reductions
and additional taxes, so that the num-
Der of suspended or reduced dividends
by the holding companies has already
reached large total.
Retail trade has improved this
month. Chain stores report earnings
well In excess of last year. Although
the carloadmgs Of the railroads have
contracted with the slowing up In in
dustry, they are Of size that would
have been dazzling to Wall Street
(Convripht 1o22>