Evening star., 1933-01-01

mentsry systems.
| And if the debt question cannot be
settled, what progress can be made on
| the other items on the economic agenda
which await international action?
Two Fundamental Factors.
| There are two fundamental factors or
methods by which economic recovery
can be accelerated. One has to do
with the increase in the volume OF do
| mestic and foreign business, and this
relates to stabilization of exchange, re-
moval of trade restrictions and barriers,
and hence the gradual increase in COM
modify prices through the restoration
of purchasing power. The other lies in
the direction of adjustment OF debts,
governmental and private.
| President Hoover laid before Con-
gress last Spring a recommendation
which has been slumbering, but of
which much will be heard during the
year 1888 In some respects it is the
most important proposal now being
considered by Congress 1t certainly
has in it possibilities of far-reaching
importance to the economic welfare of
the country It has to do with the
legal opportunities to adjust debts and
remove from the area of uncertainty
many thousands Of businesses and the
affairs of many millions of individuals
who find themselves unable to pay their
maturities.
It is a strange thing. but the laws
relating to debtors rarely undergo re-
vision except as a consequence of some
profound economic change, such as the
depreSsionS in the 70'S or the SOS.
This is probably because the debtor
class is insignificantly small in normal
times, but reaches large size when
there is a depression.
There Is no way OF estimating the
sums of money involved in the reor-
SANITATION processes which would be
made possible by the passage Of the
amendments to the existing law now
pending. Sentiment in Congress is
favorable toward the changes and be-
fore long they may be expected to be
adopted.
Foreign Trade Waits.
On the side of affirmative increases
in business there is no doubt that the
expansion of foreign trade waits now
upon stabilization of exchange. The
economic conference In the Spring and
the policies of the Roosevelt administra-
ton are looked forward to as possible
FGIllSlC0 1Oi tllC dCfCiOBllCllb Va bCbVCA
international understanding on eco
nomlc questions.
The year 1888 will see an adjustment
on the debt problems Of the world, both
governmental and private, but it will not
be an expeditions process. 1t will take
many, many months and it will run
into 1884, because the aftermath OF a
depression as extensive as the one
through which we are passing is not
quickly erased. The impetus &c busi-
ness will come out Of the increased
opportunities for the sale of Amer
ican products abroad, because the
present decline in foreign trade of
nearly 10 per cent is undoubtedly being
reflected in the diminished pay rolls and
closed factories at home. Governments
are in no position Immediately to rem
edy this situation, as it requires careful
building up by economic forces them
selves. On the other hand, governments
can be helpful by putting their own
houses in order and removing some Of
the large problems that interfere with
the commercial intercourse of nations.
A Billion Dollar Deficit.
1t would be encouraging, indeed, II
progress could be reported on the bal
ancing of the budget and the general
| fiscal situation of the American Govern
ment. Unfortunately, there has been
no such progress. The Government Is
running at a deficit of $1,000, 900 900 a
year and the Democrats have not yet
presented plan to balance the budget
Great hopes have been raised by the
belief that beer bill would become law
and thus yield an enormous revenue.
The truth is that two or three hundred
mi iIlin0 dollars uy01Ild ho O attys1
amount from this source and it is un-
likely that the machinery of retail dis
tributlon could be set up soon which
could insure a sufficient volume of sales
in competition with hard liquor to yield
the expected revenue. AS for the repeal
of the eighteenth amendment, it is con-
ceded that this is matter of two years
at least.
The latest figures from the Bureau of
Internal Revenue show huge shrink
age in incomes, both individual and COR
porate. When the time does come to
balance the budget-and 1t viii be
tackled probably in the Spring Of 1888
the contest wf1l be between broad base
OF taxation with many indirect taxes
and the levying OF higher income taxes
| In all brackets or classes.
There will be an extra session, prob
| ably about April !. The Democrats
have working majority in both Houses
sufficient to enable them to try their
hand once more with administration
measures that have the active support
Of the new Chief Executive.
Looking TO Roosevelt
The most hopeful factor in the whole
! legislative outlook is the belief that Mr..
Roosevelt will lead Congress and drive
through the measures that he sponsors.
Much depends upon how public opinion
rallies behind him The psychological
etect OF a Congress bowing once more
to the will of the Executive cannot be
overestimated
The economic situation in America
win be improved when it is assured that
the budget will be balanced. not only by
new taxes, but by reduced expenditures
! SUCH step would drive Government
bonos to new highs and produce a bet
! ter investment market than has been
seen since the depression started Much
depends, therefore. on The new deal"
and how the new President interprets
the mandate given him by the American
people.
For business in 1888 all that can be
conservativeiy said is that probably a
beginning will be made sometime dur
ing the year, possibly in the latter half,
toward the expansion Of our foreign
trade and that this may see the start
OF an improvement in commodity prices
which VIII make next Christmas a
mucn napier one than that Of 1882.
tcopyrieht. 1880
X-RhY hIlTu0pITy MEG