Evening star. [volume] (Washington, D.C.) 1854-1972, 1935-06-02
Bonus Bill Stand Also Re.
garded as Important Step
for Recovery.
NEW DEFLATI0N DOSE
DECLARED IN PROSPECT
Temporary and Violent Readjust.
ments Regarded as Natural
Results of Decision.
BY CHARLES F. SPEARE.

Special Dispatch to The Star.
NEW YORK, June 1.-The chief
threats to recovery, in the minds OF
the banker and Of the business man,
have been the possibility of imitation,
the limitation Of corporation profits
and the conflict with labor under the
exactions Of the N. r. A. Last week
the veto by President Roosevelt of
the bonus bill excluded imitation from
the list of potential terrors, and this
week the unanimous decision of the
United States Supreme Court has
overthrown the monster that mas been
charged with strangling trade.
There doubtless will be other sets
of conditions for the American people
to worry over and to furnish excuse
for postponing commitments. for there
is no primrose path ahead. However,
the disposal of the two major handi-
caps to recovery-or Sc characterized
brings a challenge to the bankers
and business world that it cannot
ignore II it is true that the banker
has been unwilling TO negotiate loans
under the shadow of imitation. then
he has less reason to delay now than
heretofore.
So with the manufacturer. the
wholesaler. jobber, factor and retailer.
If they are really to be relieved of in
hibitions that nave affected their bal
ance sheets, they should inaugurate
the new freedom under which they
will henceforth function by enlarg-
ing the scope Of their operations and
employing more people
Defiation in Prospect.
Again, as the codes served primarily
to raise prices and so made the po-
sition Of the consumer at times quite
unbearable, he may be expected to ex-
pand his purchases in lower market.
For deflation Of prices is the natural
sequence of dissolution of the kind Of
codes that the n. r. A. had set up.
! 1t will be interesting TO watch the face
/ of business as it takes another dose
of def1ation.
| Obviously. the overthrow of q sys-
| TEN so widespread and so inclusive
as to dominate the business Of a
country of l25.000,000 people. cannot
occur without bringing in its wake
temporary and violent readjustments.
These may, for awhile, disturb trade.
They are also likely to cause further
| irregularity in securities that were
! benefited by the codes and will be
adversely affected by the loss of sup
! port of these codes and attendant
. price-cutting. 1t is encouraging to
read that majority of employers are
/ favorable to a continuation of the
wage and hours regulations enacted
under the N. r. A. and that the
United States Chamber of Commerce
! takes a strong position on this. It
would be most unfortunate to lose the
benefits of this advanced step in in
dustry. After all. the country has a
/ social responsibility. as we'll as one
concerned purely with profits.
! Industries Too Diverse.
Where the authors of the N. r. A..
erred was: Cd in setting up a system
| in a nation whose industries" to
quote the language of the courts
decision, ARE too many and diverse
| to make it possible for Congress, in
respect to matters such as these, to
legislate directly with adequate sp-
probation of varying conditions" and
20 in placing too much emphasis on
social reconstruction and in CO.
operative effort in industry at a time
when q majority Of the people were
eager to regain the losses of the
depression and the cry for the old
profits and individualism in every
phase of national and international
life was more intense than ever. The
cooperative policy has survived in
the past five years only when It
brought its quid pro quo in politics
or in business. 1t has seldom bios
somed and borne fruit out of q
| purely altruistic concept.
The immediate influence over the
market for securities will be the effect
| of the N. r. A. dissolution. Until
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