The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1934-07-03

This means a ~
good deal lower >|'<.
quantity of Lewis H"ney
goods sold.
The volume of bank checks
drawn. despite a Is per cent
higher level of wholesale prices,
now runs below last year. Bank
loans have been declining and are
also under year ago.
- This condition is Immediately
due in part to overproduction in
the spring, stimulated by Govern
ment spending, by price boosts un'
der certain codes, and by antici'
pated results of devaluing the dol
lar. Then came consumer re-
sistance to high prices, strikes, and
the drought.
Private debts, and the burden
Of carrying overvalued property
and securities also continue to be
q drag on buying and selling.
Finally, the general uncer'
tainty as to New Deal policies,
both in controlling business and
in monetary matters, is very dis
eturbing, and tends to retard bust
ness all along the line.
These conditions are likely
ia continue to retard, the chief
reliance of the New Dealers
being ~ renew Government
spending, and ~ initiation.
These are separate factors, but
they are apt to work together.
The general feeling now is
that as business recedes and
!. the fall elections drew near,
the Administration will step up
its spending program and at
the same time "Step on the
I. gas" Of initiation.
( Probably they will have to do
this quite drastically to get the
immediate results they want
This is true, both because their
radical new legislation and con
templated reforms" tend 10 de-
press business, and because the
appeal of anticipated initiation
is now not so effective as it
was.
For example, business is now
only 3 or per cent above a
year ago, and is considerably
under the peak of last summer
I think that if you leave out the
effects of drought and monopoly
under the codes, you will not find
much strength in prices during
the last three months.
AS we look back at the half
year just ended, we find a mod
crate squirt went on in business
between last November and the
end Of April. 1t seems fair to say
that this was chiefly due to gov.
eminent spending, first for the
CWA and then for farm bonuses.
Large loans through RFC and
other agencies also contributed,
A second factor was the devalua'
ton of the dollar and the decline
in our foreign exchange rate,
which caused a temporary squirt
In exports.
Then. too, the liquor business
was added.
The increased wage expenses
under various codes and the price
mark.ups which attended them
had the effect Of driving in"
much buying.
Enthusiastically, the two out
standing moves" during the first
half were in Cd steel and auto
mobile production. and 90 bank
deposits. Both trace directly to
government spending Except tina
code price-markups and strike
fears helped the former.
You see, as the Administration
ladled out our money, the checks
went to buy stream lined cars
while the borrowing made neceS
sary on the Treasury'S part piled
up artificial credits in the banks
The latter largely constituted
"excess reserves" which hav'
recently been of record proper
tons.
But the banks have been unable
to find sound borrowers, as i
shown by the declining trend o
bank loans, so the excess credi
thus Created" remains unused
And when the Government re
duces its spending, the so-calle'
''busineSs activity recedes.
We may say that the first hal
of 1884 was a great pump prin
ing" experiment (gamble). TIL
New Dealers poured into the bus
ness pump Cd our Government
credit and 90 the artificis
profit" that they wrote up o.
the gold hoard which they ha
seized. The chief lasting result
public debt.
They are not starting the pump
They are just bailing out a watel
logged ship by pumping waite
logged ship by pumping waite
from one com partment int
aooLnerS .AA a. -