The Washington times., 1934-05-29

deals out the
dollars. S.
It has also = s11<@2
heen learned. Lewis Haney
we may hope, that effective in
dlation in the shape of bank
credit cannot occur unless condi-
tions are such as to cause de-
gnand for credit.
After pouring out billions Of
government funds and writing
up huge excess reserves on the
books of the banks, we now find
industrial activity receding. This
trend seems likely to continue
throughout the summer, unless
the President either Cd abandons
his New Deal as a program of rad
Gcal social reform, or (2) makes
the last desperate "play" in the
way of currency initiation.
tOf course, the serious drought
the West is a factor. But that
1erely emphasizes two points:
(9) No idealiStic scheme of social
UeeormS or government control can
overlook the practical difficulties
presented by material forces. (2)
Gf we had not had drought. we
would have had a serious problem
Nf overproduction.
Last week, steel production
Elumped. 1t now seems that even
the ordering for stock (to antici-
pate) has been less than supposed,
and steel makers look for dull
Business until fall.
The automobile industry appears
to have definitely passed its
seasonal peak, and last week the
production was curtailed much
more than seasonally. Evidently
sales have not been up to eXpecta-
tions. The attempt to raise auto
mobile prices in order to pay high
wages has failed doubly; it has
failed to bring income, and it has
failed to satisfy the New Deal
adeas of the laborers.
There was a small rise in the ad-
Husted index of railway carload
ings, but this was due to an abnor-
NAL Jump in ore shipments,
probably influenced by strike
fears.
Trade, on the whole, has con-
tinued SpOtty and backward. I'm
SeaSOnable weather and strikes
have been a factor. But the
plain fact is that many prices
are high compared with most
peoples incomes, and over TO-
100000 are unemployed. Retail
trade figures continue to show
that the average family is buy
ing smaller quantities of goods.
AS to prices, the weekly indexes
moved up again. This was en-
tirely due to higher grain prices
caused by drought. The more
sensitive industrial commodities
were lower, including steel scrap.
Thus it seems reasonably clear
that the New Dealers attempts
to prime" the business pump on
Government credit, have failed.
We cannot expect bank credit and
private initiative to go to work as
long as we continue to subject
them to so much uncertainty and
to so many restrictions.
The Government will either
have to run business itself, or let
business men do it.
That is the problem of the New
Dealers right now. Which way
will they take? The diSorganiZed
condition of the NRA, and the
Presidents edict allowing clothes
cleaners, etc.. to "fly the Blue
Eagle" although charging what
they want to for their services,
suggests that we may hope for a
more realistic policy.
Most Of us agree with the ideals
Nf the New Deal. They are as old
as the hills. We want social JUS
tice and better conditions for the
average man. We hate monopoly,
and deSpise financial manipula-
ton. Business" leaders" deserve
much chastisement.
But to attain our ideals we
must have practical methods. We
are never going to make business
and increase employment merely
by furnishing wrong doerS, or by
IaNNe