Evening star., 1934-12-31
AMERICA ESCAPES
DANGERS IN 1884
Initiation, Communism and
Fascism Seen Averted
Last IL Months.
Continued From Page B-1.)

1t had feared as a complement of the
anticipated slump in Government
bonds. Its problem has been to find
a sufficient supply of good corporation
mortgages to meet the demands of its
many portfolios. Interest rates have
been the lowest in 80 years. There is
every expectation that they will re-
main low for an indefinite period. The
problem of the banks today, therefore,
is less with their security investments
than it has been in years. The thing
that plaques them Is the lack Of earn
ing power on such funds as they
have employed and the inability to
put to work a portion Of the $2,000,-
600 900 excess reserves of the Federal
Reserve member institutions.
Eleven months ago the dollar was
devalued to 59.06 per cent Of its former
level. 1t has remained close to this
value ever since. 1t is today the most
stable of the worlds currencies. There
Is frequent talk In Europe Of further
devaluation, but not in Washington.
The banker, therefore, now has q
pretty good idea Of what his money
Is worth.
Instead of losing gold to Europe, we
have gained nearly $1,100, 100000 in
1884, including $200, 100000 In the
last two months. This is o threat
to Europe but not to the United
States. Our foreign trade has not
collapsed-in fact. it has progressed.
The excess of exports over imports
for the first 10 months Of 1884 was
1895 900 900, against $4,000, 900 in
the similar period Of 1888.
Controlling National Debt.
As to Government finances. These
have been admirably controlled, con-
sidering the demands on the Treasury
for emergency relief. 1t Is true that
the direct national debt now is over
s28, 900 100000, a high record figure,
with $4,000, 900, 900 of contingent liza
bilities in the form of Federal Farm
Mortgage and H. o. L. c. loans and
r. F. c. debentures, but the totals do
not realize what had been predicted
for this date. The deficit is large. 1t
could not be otherwise. II social disin-
tegration is to be avoided, but neither
the one nor the other constitutes an
impossible impediment to recovery.
The war debt in 1919 was nearly as
great as now existing and 1t was re-
duced to less than $4,000, ,000, 900.
Unfortunately, the one difficulty
from which we have not escaped is
unemployment. This Is approximately
as large as a year ago. 1t Is esti-
mated by the F. E. r. A. admins
traitor that there are $4,000 900 per-
sons still on relief. The problem OF
how to care for them is the one on
which the PHILOSOPHERS of the admin
istration and of business groups diff
fer. It is the question whose deter
mination will most affect the tmmedi-
ate trend of Government spending. It
may prolong the period Of . large
Government deficit.
As to recovery. This may be oharted
in the form of various statistics, none
of them very convincing, though they
exhibit a definite upward turn IN
many aspects of business life.
More convincing, however, is the
recent change in the attitude of both
the business and banking worlds
toward the purposes and policies Of
the administration. This has come
since the November election, which
gave President Roosevelt proof from
the people that they supported his
major efforts and wanted them to
continue. Consequently, individuals
and groups of bankers and industrial
lists have gone on record as willing to
co-operate-in other words, to &c
along with the Washington tide in
stead of bitterly bucking 1t. This Is
the first great step that has been
taken toward realizing recovery, and
its significance is far greater than any
set of figures of trade revival.