The Washington times., 1934-03-27

W De COuC1uueQ.
s The chief in Lewis Haney
dlcations Of the hesitation caused
by labor difficulties were seen in
some let-down in steel making, and
In wholesale commodity markets.
Both should be temporary. The
compromise formula worked out
to stop the automobile strike
should at least postpone the
larger labor clashes for some
time, and allow steel production
and consumption to go ahead.
The react on in commodity
markets was partly caused by
buyers uncertainty over strikes.
They can now proceed.
The general Slowness Of COM
modify prices to reflect the de-
valuation Of the dollar and the
huge supplies of money and credit
available in the country, shows
how dependent prices are upon
demand. The Government has
amply attended to the supply of
currency. 1t has broadened the
monetary base'' by .devaluing the
dollar, so that its gold hoard
{: could now make about 70 per
cent more dollars. It has piled up
record excess reserves Of bank
credit.
The Government has also
done much to make q sort of
demand by its huge spending
= policy. Since the first infla-
tiOnary upruSh Of last summer,
this Government spending has
been the chief factor in the de-
mand for money and credit.
But it still remains to get the
normal private or business de-
~ r11and to functioning. Such a de-
mand goes along with production.
It brings a spending that is based
on economically earned incomes,
and which can therefore 60 on
indefinitely. That is what we
need.
When laborerS are producing
enough values to earn large pay
rolls, and employers are making
enough profits to hire many Ia
borerS, demand and spending will
take care of themselves. Then
there will be no trouble with
money or the price level. Goods
will circulate, and that will make
the basis for demand for the
ample supplies of money and
credit now existing.
Then the devalued dollar will
circulate, and its depreciation
will be reflected in higher prices.
1t is encouraging, I think,
that the responsibilities Of the
situation have driven the Ad-
ministratiOn to moderate its
more radical tendencies. This is
seen in ~ the compromise on
the automobile labor issue, ~
the withdrawal Of the NRA pro-
pOSal for q flat reduction i'm
hours and increase in wage
rates, ~ the willingness to con-
slider amendments to the stock
exchange bill and the securities
act, and az q tendency to lean
back on price fixing.
Incidentally, too, some apprecia-
g ton of the dangers of its none
tary theories are now being
shown. First, the Treasury last
week stopped the policy of piling
up bank credit reserves by paying
out those greenhack gold certifi-
Gates" Second, the Administra.
ton obviously tried to stall off the
silver crowd. Third, it showed
moderation in the proposals for
setting up intermediate credit
banks" for the purpose of making
five-year loans to business con.
Germs for working capital.
Apparently the latter scheme is
to be kept orthodox" by not
drawing directly on Government
credit, and by keeping the new
banks subject to Federal Reserve
control
AS to the strike settlement" it
is compromise. and leaves unset
tied the fundamental issue of the
fitness of the A. F. Of L. as an
age"cy for collective bargaining.
The President has done well
to say that he expects "Organ-
izatiOns of employees to observe
) the same ethical and moral re-
SpOnsibilitieS" as the employers.
But that is easier said than
done when they are organized
In the A. F. Of L. way. We have
not heard the last of strikes.
COARSE YARN MARKET
NEW YORK. March ,27 O.N.sN.