Evening star., 1933-07-02

poS1tS W1tnhelQ by tlnllQ people put IL
cannot cure the underlying causes that
! produced the disease. These compel
more drastic action in the way of an
! adjustment between deposit liabilities
and the fair value of assets and the
eventual closing of more banks that
are structurally weak and are con-
slant menace. To bolster up such in
stitutions at the expense Of sound
banks subtracts from the benefits that
have been derived by the recent house.
cleaning.
Because of their intimate relation to
such a large portion of the public, 1t
seems essential that in the future both
the railroads and the banks should be
subject to more governmental super
| vision than they have had and be held
| closely within the regulations that have
been established to govern them. Many
of the banking tragedies could have
| been avoided If the examinations by
,, national and State authorities had been
more conscientiously made. Some of
| the undue severity that is now being
applied to their managements might
better have been imposed four years
ago.
Program to Create Jobs.
The main objectives In the admins
tration program are those Of re-em-
ployment. and with this a rise in wages
consistent with living requirements and
with the advancing price level; stimu-
| lation' Of output of factories and at
the same time control and contraction
Of the production Of staples now in ex-
Syya cr1ry, 1y Vic IN tn Y,yfn 1auA
to an indeterminate figure, but the
oretically to that of 1926, and sta
bilization of the currency, if this can
be effected so as not to upset the fun
damental effort for higher commodity
prices. It Is believed that the public
works program will return 100000
men to work by October l. The gen.
eral pickup in industry has already
absorbed more than 100000 of those
| who were unemployed in March, and
most of them at some advance in
wages over the scale prevailing at that
time
The industrial recovery act Is ex-
pected to put other millions back on
, their Jobs this Summer if the spirit
of cooperation between employers and
employees is fulfilled. This involves a
+, reduction in working hours SO that
/ employment may be spread over a
| larger number of available workers: it
also introduces into industry the Roose-
veltian philosophy that mo business
| which depends for existence on paying
less than living wages to its workers
| has the right to continue in this coun-
try" The reprehensible minorities in
industry. who have been responsible for
starvation wages and for price-cutting,
| will be eliminated
There is a worldwide effort being
made to reduce wheat production. The
| Secretary of Agriculture has proposed
| cut in cotton planting affecting TO-
900, 900 acres While the principle of
keeping production and facilities at
balance seems, in particular instances,
to be sidetracked in general this is
the thesis on which the Government
is working. This having been adopted
at a time when technical conditions
favored its promotion. there is little
doubt that the expansion in trade will
steadily proceed throughout the Sum-
mer and that by the fourth anniversary
| of the October November panic of 1929
we will see a decided change in the
Currency Problem Foremost.
Helping or hindering this will be the
| degree of effectiveness of that part of
| the administration program having to
| do with raising the price level for its
domestic value, and at the same time
giving the currency the stability nec-
essary to enlarge markets for interna-
tional trade. This is the great prob
| lem of the moment. It Immediately
| created difficulties at the opening of
|
There is every indication that the pol
icy of the United States is to work out
its own destiny, irrespective of its ef
| feet abroad.
Delegates to the London Conference
have not so far been able to reconcile
| their views to those of their trade COM
petitors. and We find wide gap be-
tween the Americans, the British, the
French and the Italians on the question
of the level at which to fix their va
| rious currencies as well as the time
| when there shall be general return
to the gold standard. 1t is safe to say
that we will be "off gold" for an in
definite period in this country-prob-
ably for not less than two years. In
general, the administration program
envisioned the year 1885 as bringing to
conclusion the various projects for
mechanically restoring normalcy in in
dustry.
That the momentum already attained
by business will give it strong push
forward for some months is probable.
It cannot be emphasized too strongly
that it had legitimate basis for Inn
provement, and would have, steadily
gained ground If its own recuperative
/ powers had been the single factor
What no one can now foresee Is the
ol1tconne of a compleXitv in industrial
! life and a confusion in applying en-.
tirely new codes of operation-the
sequel to the new business program-or
| to what extent our foreign trade is to
be hampered by our price level and
our new monetary standard.
That We have planned a program
| which may fail of expected results be-
cause it is so involved and requires
such delicate administration is not i'm
probable. It is the opinion of this writer
that there vii be universal gains in
| industry, whether or not the program
succeeds. Recovery had set in In trade
| and in security markets in many parts
Of the world before March. This was
automatic, and therefore, the strongest
basis on which 1t could rest.
Securities have gone long ways IN
! discounting both the automatic and the
mechanical phases Of recovery. The
spirit of speculation has been too much
| aroused. To rebuild the industrial
, structure from the present level it
should not be required that extreme in
| flation measures be adopted. Conse-
quently, the mad rush to exchange doll
| lars for securities that are intrinSically
worth little more than in March, even
! though they may have been rescued
from extinction or assessments, seems