The Washington times., 1934-07-28

following: Sas
/. The new SM|
securities COM
mission has ex- Lewis Haney
pressed moderate and intelligent
views.
2. The Government Ais in.
creasing its expenditures an d
seems likely to pour out enough
money for relief and stimulation
to take the place of real business
for the while. MANY will doubt
this is favorableO
3. Some fair second quarter
earnings are reported.
4. Automobile production has
held up well.
S. Commodity prices have re-
manned fairly firm, although this
is largely due to the effects OF
the drought upon food stuffs-on
the other side of the ledger, we
find a longer and more substan-
tial list of unfavorable factors as
follows:
Drought is First
l. First, I would put the drought.
This has become a great natural
calamity which new deal expert
ments are obviously futile. BY des-
troying farm productivity on a
large scale, it has pushed some o.
the AAA schemed to an ex-
treme which illustrates their ab'
surdity. The resulting expendi-
lures and manipulationS by the
new dealers will be condoned as
"Relief", but will increase debt
and taxes, and may give the final
push into currency initiation.
2. The foreign situation is bad.
It will further upset our foreign
markets, it threatens further cur
rency trouble.
3. Our domestic labor warfare
continues on a wide front. It
means higher costs, disrupted busi-
ness plans. and probably In
creased Government expense and
interference with business.
ACAVAGy DcCuuAnS
4. Business activity is declin-
ing, and probably employment
has fallen off. The slight gain
in electric power merely reflects
the drought and domestic con-
sumption for refrigerators, etc.
We are witnessing another let
down such as usually follows
artificial stimulants. The Gov.
ernment checks went to auto
mobile dealers and mail order
houses. The railways bought steel
on Government loans. Now the
normal demand is more than
filled, and the New Dealers will
have to "create" some more "pur-
chasing power"
S. Profits are disappointing.
The General Motors net earnings
were below a year ago despite
larger volume, reporting the same
story told by Nash some months
ago. Railway net is off despite
larger gross.
6. Monetary uncertainty is as
great as ever. Just now, there is
a renewal of the fear of "stabili-
zation" and "soft pedaling" of in
flation. This merely illustrates
the condition. The New Dealers
have brought us to the point
where we must either initiate or
deflate. There is no m iddle
ground. Il don't think they have
the nerve to deflateO
Z. The NRA is in confusion
and adds to the general uncer-
tainty. Things might be worse.
In fact I believe that is-that is
we could tomorrow have a truly
businesslike administration a t
Washington which would imme-
diately return to sound economic
policies. Hope and confidence
would soon be restored, and cur
chanted business men would grad
ually bring order and get the car
on the upward trace. AS it is,
however, hopes for any real and
sustained recovery this fall must
be very moderate. The stock
market is likely to rebound soon.
but the recent wave of liquidation
has given an important warning.
It tells us that what we need is
more business and less radical
reform.