Evening star., 1935-12-31
DEPRESSION CYCLE
APPARENTLY HAS
RUN ITS COURSE
Fears Over Federal Debt
and Spending Fail to
Retard Advance.
REGARDED AS NATURAL
UPSWING FROM LOWS
Rise in Profits, Higher Dividends,
More Employment and Buoyant
Markets Are Cited.
BY CHARLES F. SPEARE.
Ipecial Dispatch to The Star.

6peCldI DlbpdLcl 10 Inc star.
NEW YORK, December 3l.-The
outstanding fact in the financial his
tory of 1885 is the recovery in busi-
ness. The causes on which this is
based are several.
Inasmuch as improvement became
prominent after the decision Of the
United States Supreme Court early in
May dissolving the N. R. A., the asser-
ton is made that this gave the busi-
ness world confidence and that 1t at
once started to expand. There Is con-
siderable merit in this argument.
On the other hand, the subsequent
uneaSiness of bankers and indus
trialists over the mounting national
debt and the Federal expenditures for
relief and their demand for a bal
ancng of the budget did not retard
recovery. Which seems to indicate
that the cycle Of depression and de-
lation had run its course, and what
was being witnessed in the way of
rising corporation profits, higher divi-
dends, more employment and buoy
ant markets for securities represented
the inevitable recuperation that
nations, like individuals. enjoy after a
long siege of illness when they are
constitutionally sound.
1t was urgently required In March.
1888, that a temporary suspension of
banking operations in the United
States be effected in order to stop a
ruinous defation. Then followed
abandonment Of the gold standard to
revalue upward commodity prices.
Later. the millions of unemployed in
this country demanded attention and
billions of dollars we're appropriated
out Of the Federal Treasury for direct
relief or for public projects giving en-
ployment. These were all efforts di-
rected at ending the acute phase Of a
crisis and bridging over. the tedious
and neuresthenie period that precedes
repair and recovery. ---
National Debt Mounts.
An era Of business depression Is one
Of wastefulness IL the same manner
as an era of war. To meet q war
emergency, our national debt rose from
less than S3,000,000,00O in 1917 to
more than $4,000 900 900 in 1919. To
combat a peace time emergency, in
volving directly many times more in
dividuals and families than those con-
cerned in the war, the debt Of the
United States has risen from about
$1,000 000, 900 in 1929 to $50, SOC. .O0O,-
600 at the end of 1885. There was no
objection to the earlier great growth
in debt to promote a war which many
Americans now repudiate, but deep
unrest over the pyramiding of Gov
eminent obligations for the sake of
the American unemployed. The diff
ference in the two situations is that.
in 19l7-19l9, Government bonds were
bought largely By the public and so
did not jeopardize the banking situa-
ton, whereas, today, they are held
to the extent Of about two-thirds Of
their total by financial and fiduciary
institution. Consequently, they are a
possible source of danger and provoca-
tive of imitation.
If we admit that business recovery
has developed along natural lines, that
it is Soundly grounded and is likely to
proceed toward a higher level, We
must conclude that the recent policies
of the Government. adopted to breathe
life into industry and to assist those
whom industry could not absorb, must
be readjusted to the new and
healthier situation. This is what the
country has the right to expect from
the administration during 1896.
Relief must be administered at the
center of its need; namely, in the
local community. and only upon a
rigid examination of the individuals
right to receive relief. 1t must be
separated from politics and bureau
cratic agencies. The recipient of 1t,
when physically able, must give its
equivalent in some kind of available
work or go hungry. To the physically
unfit and the unemployables, the
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