Evening star., 1934-07-01
Effects Hard to Separate
From Natural Forces of
Readjustment.
IMPROVEMENT OF BANK
STRUCTURE APPARENT
Labor Unrest Eased and Alarm
Over Exchange Control Act
Proves Exaggerated.
BY CHARLES F. SPEARE.
Special Dispatch to The Star.

NEW YORK, June 30.-The first
six months of 1884 was a period
when, by legislative action, old and
new, the effort was made to guide
and stimulate business and to meet
the needs of the unemployed. The
second half of the year now being
entered will attempt to prove the
wisdom and efficacy Of the measures
adopted and establish many of the
political and social policies under
which the United States and its
people must live for another genera
ton.
The experimental stage of the re-
construction era has continued over
IS months. 1t is difficult to sep
arate its values for the encourage
ment Of industry from those that ma
turally come into play after a long
term of liquidation and readjuSt-
ment. Obviously, business had to be
nursed along and given a push to
start a momentum. This it has had
out Of the abundance of Treasury
funds, supplied chiefly by the banks.
If there is any doubt as to the
improvement in business, there need
be none concerning conditions in the
banking world since the early part
of this year. The depositor is today
free of fear for his deposit. In the
public mind, the guarantee Of bank
deposits has become an accepted and
necessarily permanent feature in the
American money market.
Many Strikes Averted.
The second quarter of the half
year brought forward an element
that for a time threatened to offset
much of the benefit gained during
1888 and from January to April
namely, labor strife. The motor, iron
and steel, textile and railroad in
strikes, any one of which would have
made deep impression on business.
By wise direction at Washington and
| GOODNESS and cooperation on both
sides of these controversies, the prop
er adjustments were made so that
the time lost by employees from
strikes is the smallest that has been
reported following any of the modern
depressions. t'
Wall Street has been upset by
the securities act, which, in its orig
inal form, would have been unfair
and most harmful, but as enacted is
not prejudicial to legitimate stock
exchange operations. 1t is sanctioned
by a considerable portion of those
whom it affects. The head of the
largest commission house in Wall
Street makes the remarkable state
ment that 1.-The security exchanges
have suffered more in the past from
f1at-footed adherence to theadbare
| tradition than they are likely TO in
the future from experimentation at
the hands OF a commission with
fresh viewpoint"
1t will take time. possibly the re-
mainder of 1884, for adjustments TO
| the new status. During that period
| there is likely to be a wedding out Of
the weak elements in Wall Street. 1t
is estimated that a daily average
turnover of 100000 shares is neces-
sary to cover all brokerage house
expenses. Since January, the average
has been less than this, is spite of
fair amount of trading in the first
| three months of the year. The deal
ings in bonds, however, have been
the heaviest for the six months in
years.
1t has always been the belief of
those who were never influenced by
the Wall Street propaganda last
Spring that eventually brokers who
do a strictly commission business
for the public will benefit by the
regulations and prohibitions that
are contained in the Fletcher-Ray-
burn bill.
Devaluation of Dollar.
From another viewpoint, the
threat or fear of what might happen
proves to have been exaggerated. The
two intangible factors in the business
and banking situation have been the
probable degree of imitation and the
scope and force of the N. r. A. Late
in January President Roosevelt an
nounced his devaluation plan, fixing
the price of gold at S35 an ounce
and placing the dollar at 5906 per
cent of its former weight This was
a compromise with those who de-
manded the maximum gold price of
$4134 under the Thomas amend
ment
simultaneously, a $4,000 100000 ex-
change equalization fund was es-
tablished. Foreign currencies be-
came demoralized. During February,
S453, 100000 of gold was imported
from Europe, and, subsequently,
nearly $225 100000 more. France
and the other gold countries ap-
peared on the verge of abandoning
gold. 1t is interesting to note that
since March the Bank of France
has recovered nearly $200,000,000 OF
gold and the credit of the French
government, as represented in its
paper, has rallied sharply.
At various times the Roosevelt
administration has been importuned
to embark on a more vigorous in
f1ation policy, but with the excep-
ton Of moderate concession made
in the form of proposed silver pur-
chaSes, it has held to a moderate
course. 1t today appears to be more
definitely against currency expan-
sion than six months ago. This is
one of the important gains of the
half-year period.
It has been apparent for some
time that the N. R. A. has been
losing ground. Those who say that
it is done for" are misinformed. 1t
will continue to function and will
preserve those features which justi-
fed it as a disciplinary influence at
the low stage of the depression. 1t
has defeated its broad program by
its trivialities. Obviously, it has in
creased the power Of those indus
tries that already had too much pow
er. The consumer has been the