The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1935-07-03

whence has come the energy
which has enabled it to check the
four-year decline from 1890 to 1888
and to rise into its present range2
Why has it declined these last six
months? And what will send it up
again?
One group will tell you that BUSH
ness has declined because of the in
fationary scare precipitated by the
Patman bill. Yet when the Thomas
inflationary threat in 1888 visited us,
The result was a little boom.
Still another set say it is to be
attributed to the long session of
Congress filled with frightening bills
and the stubborn persistence of the
Senate in its endless discussion with
out action. Yet when business was
rising from November, 1888, to June,
1884, Congress was in session and
the Senate was talking quite as VOL
uhly, and the bills were supposed TO
be even more disturbing.
The most persistent criticism is
that the Federal Reserve Bank bill,
the Utilities Holding Company bill
and the sensational ending of NRA
has produced a paralyZing uncer-
tainty in business. Last year they
said the Stock Exchange bill, the Sc
curitieS act and the gold policy were
doing the same thing. Yet all these
things have not paralyzed the au-
tomobile business, which has gone
ahead making cars.
Unimpressed by Alarms
I do not think there is any truth
in any of these alarms. AS for
NRA, business did not start up
until May, after the NRA act had
been declared unconstitutional
though I do not think that had
anything to Go with the little I'M
seasonal business squirt. AS for the
Banking Act and the Utilities Hold
ing Company bill, feel quite sure
that if any uncertainty has resulted
from these it proceed from the
frantic alarmist campaigns car
ried on by banks and utilities.
One of the most foolish and, at
the same time, disturbing practices,
adopted by business itself these last
two years has been the wild, boist-
erouS cries Of disaster it has raised
every time any proposal has been
made for dealing with our national
problems. We were told, q years
ago, that the Federal Reserve Act
would destroy the banks Now the
same men as desperately defend the
Federal Reserve Act and insist that
changing it will ruin us.
We were told last year that the
Stock Exchange Act would crush
our American financial system.
Now most Wall Street leaders adj
NIT the act has been a good thing
! for Wall Street.
| What has happened can be eX-
planned much more intelligently in
terms of the ecolL,1ic forces rather
than events. Obviously what is
needed now is the creation of new
or fresh supplies of purchasing
power. The purchasing power being
created is also being pretty well
used up. People have been spend
ing their incomes. That is plain
from the failure of savings or new
investments to increase materially.
Industries Classified
Every business which gives en-
ployment also produces and distrib-
utes purchasing power-through the
wages and other costs which it pays
out to produce goods. Roughly, in
dustry may be divided into two great
groups-industries producing con-
sumers goods (the things bought
directly by consumers and indus
tries producing capital goods build
ingS, roads, heavy machinery, etc..
All of the people engaged in both
these industries buy consumers
goods. If then, the capital goods
industry breaks down, then all the
people engaged in it thus thrown
out of work can no longer buy goods
from the consumers industry.
The goods produced by the capital
goods industry are not bought by
consumers, but chiefly by producers
and almost always on long term
credit. This is the heart of the i'm
portance of the capital goods in
dustry in our present system, name
ly that most Of the income which
it produces is available for the pur-
chase of consumers goods.
For this reason the capital goods
industries are regarded as produc-
ers of fresh supplies Of money in