The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1935-06-17
BY BARROW LYONS
Times Special Writer

NEW YORK, June 17.-With the
props knocked out from under the
NRA, the question of whether the
government can succeed in spend
ing its way back to prosperity
through printing the pump" Of in
dustry must be reappraised. Prac-
teal business men and economists
are asking: "Win the s488O, 900, 900
public works program be worth the
price?"
Aside from its expediency as a re-
lief measure, will it restore mass
purchasing power sufficiently to
bring about substantial recovery?
Will it stimulate new private invest
ment sufficiently to revive the CAPT
tai goods industries?
Many hold that experience in gov
eminent spending does not indicate
that an added $4,000 100000 or so
would greatly raise production, en-
ployment and pay rolls. The major
gains in industry during the RooSe-
welt administration developed in an
ticipation of the. NRA and before
extensive Federal spending began
Business was Straining every Sinew
TO pile up inventory before code re-
straints should be effective.
Below Base Levels
Since then industrial activity
never has attained the height
reached in June and July, 1888. Aft
er the downward reaction to the
squirt wore out wages, pay rolls and
employment tended gradually to
rise. but indexes are still far below
base levels.
Neither has farm income in
creased greatly since mid-1933. But
the cost of living has risen, Off
setting most of the increase in wage
levels.
The cause has been explained par
TALLY by Col. Leonard P. Ayres, vice
president of the Cleveland Trust Co..
who has shown that comparatively
little government money went to
the capital goods industries, al
though unemployment is largely
concentrated in that area.
This is also the sector to which
the eyes of investors have been
turned for opportunities to inject
new money, which might act like
adrenalin on the heart of business
but the field did not appear at
tractive Many of the largest COM
panies are financing expansion out
of reserves, and small concerns face
a continually more difficult situa-
ton.
Undoubtedly there is vast need
for rebuilding to keep up with tech
biological progress and to replace
obsolete plants, but until profit
chances appear more alluring, in
vestment bankers do not expect to
see a magnitude of capital outlay to
bring about vigorous industrial eX-
pansion.
Capital Made Timid
To what extent reluctance to eX-
pand investment and industrial &C
/ tivity is due to economic reasons,
and to what extent to psychology
cal, it is impossible to say. There is
no doubt that President Roosevelt
inaugural address promising a bet
ter distribution of wealth scared
many men of great wealth.
Nor is the attack upon holding
companies. the drive to control the
nations bank credits through the
proposed banking bill and a sus-
pected leaning of the AdminiStra-
ton toward labor without effect in
arousing vibrant fears-and pro-
ducing much strong language. There
seems to be enough reason for be-
lieving that the Administration is
not friendly" toward some aspects
of banking and industrialism to
make a great many men very I'M
comfortable.
Under these circumstances ii
seems to a good many shrewd men
that the pump printing" activity of
the Administration probably will be
4 disappointing. The effects seem
likely to be temporary. Other more
fundamental means of effecting
recovery must be sought, in the
opinion of many.
TomOrrow-New Industries.