Evening star., 1934-04-22
Mcleod and Dies Bills
Taken as Sign That Rad
icaI Steps Are Likely.
PICKUP IN BUSINESS
CONTINUES UNABATED
Merchants and Bankers 0ptimis-
tic on Near Future, but Predict
Dangerous Result.
BY CHARLES F. SPEARE.


little dispute today of the fact that
business in this country is improving.
The outlook for industry in the next
few months is relatively good.
The state of mind of merchants and
manufacturers, and also of bankers,
may be characterized as comfortable"
with respect to the immediate future.
Serious labor disturbances have been
avoided so far this Spring There is
assurance that the administration
will oppose the radical measures of
Congress represented in the silver and
bank deposit bills
Recovery is apparent in other parts
Of the world. as witness the British
financial and trade statements this
week.
In contrast is the fear that possesses
the business and banking world as to
what may happen later in the year.
This is reflected in an unwillingness to
make long term commitments. Those
who accept the present situation as
encouraging, and are making the most
Of it. hesitate to predict what they may
be facing in the way of new and
serious problems in the Autumn. II
is true that they have been constantly
setting their dates for reaction further
ahead and have been agreeably sur
prised at the pickup in business,
which reflects on their past judgment
They are convinced, however, that
the country is steadily marching
toward more radical economic and
social policy and that initiation of
the currency and disintegration of
Government credit are inevitable.
Sentiment Undergoes Change.
This alarm has been growing in
recent weeks. 1t follows a period of
two months during which the business
pulse of the country had been beat
ing quite normally and the effects on
the conservative element of devalua-
ton, the RECOMMENDATION of industry
| and the extraordinary expenditures OF
the Government, to provide employ
ment and relief, had begun to wear
| off. In other words, those new as
pectSr of business. that appeared to
threaten recovery were losing their
| terror in the actual fact of recovery.
A certain amount of stability had
taken place in securities and in COM
! modities. There were no longer bank
troubles or commercial failures of con-
sequence. The Writ investigation had
disposed Of the fiction of the brain
trust" seeking to overthrow the Gov
| eminent and establish a Stain as
dictator. If the collapse of this case
does not convince the skeptic, let him
read the current article by Raymond
Moley, closest to President Roosevelt
| of his early advisers, who states that,
in scores of conferences with the men
now accused of liberalism, they talked
| of the United States" not a fascism
or communism nor of the possibility
of the adaptation of policy now in
| operation in any other country to the
uses Of this country"
In the view of business men and
| bankers, the administration had come
| to believe that the natural forces Of
recovery should have more play and
the artificial stimulus gradually be
! withdrawn. This suggested that
Washington was moving cautiously to
the right" Then there was suddenly
injected the Mcleod bill to pay of
depositors in closed banks, with the
implication that both Federal Reserve
and State institutions were to be in
| cluded, and the Dies measure to ma
tionalize silver. This made it clear
that the radical element in Congress
| was again in the saddle All of the
old alarms regarding imitation were
| quickly revived.
Farm Products Decline.
This is the situation today. Asso-
ciated with it is a decline In the
prices of farm products most sensi-
tive to speculative operations. Wheat
has fallen to the lowest level in six
months and other cereals are at the
minimum figure of the year. The
drop in wheat reflects a supply and
demand condition, as the April report
OF the Department of Agriculture in
dlcateS that, in spite of the curtail-
ment program, the acreage planted
Is greater than a year ago and there
Is probability of higher yield.
Compared with last month, wheat.
corn, oats and rye average Z cents a
bushel lower. Dairy products are down
| sharply. So are cotton and silk. The
metals. however, have advanced, no.
tably copper, lead and tin, as have
rubber and hides. Altogether, the
commodity index is now points be-
low that in the third week of March.
So 1t is not surprising that a de-
mand Tor some new force to lift prices
! should have developed in Washington
The experiement with a higher gold
value has not yet justified itself. The
normal term of lag between a rise in
| gold and better levels for commodities
has expired. 1t is more than ever
certain that, only as people begin to
| fear for the quality of their money
and exchange it for goods will there
be substantial rise in prices. That
time will have arrived when and If the
Government Is forced by Congress
into such a program as is proposed
under the Mcleod bill.
Industrial Pace Quickens.
However strong the undercurrent OF
fear for the future may be- it has not
prevented the expansion of business
or the broadening of the security mar
ketS. Neither in the industrial world
this week nor in Wall Street has there
been evidence of a slowing down. We
again see quickening of the iron and
steel trade, whose ratio of production
to capacity has risen to the best level
since last August. Railroads, finding
their net earnings more satisfactory
and able to borrow on Treasury loans
at 4 per cent, are actively re-entering
a market from which they withdrew
three years ago.
Electric power output for the second
week Of the month was 16.5 per cent
! Continued on Third Page.l