Evening star. [volume] (Washington, D.C.) 1854-1972, 1935-06-14
BUSINESS, FREED
. OF n. R. A. GAINING
Confidence and Renewed
Activity Follows Charting
I. by High Court.
BY DAVID LAWRENCE.


A. to survey the effect on American
business and industry. and it is grow
ing clearer every day that the decision
has given an impetus to trade which
lis likely to be reflected in an increas-
ing volume toward the end of the
Summer and in the Autumn.
From all parts Of the country bust
ness men are reporting a revival OF
confidence and a renewed activity.
They do not all attribute the change
In psychology to the same thing. but
1t is apparent that the Supreme Court
decision furnished chart to the ship
sof state which so many people had
felt had been lacking during more
than two years of uncertainty.
: The legislative situation here. of
course. has by no means clarified But
the feeling is becoming general that
the wings of an irresponsible Congress
and administration have been clipped
and that as long as there is a Supreme
Court there will be no sanction for the
deliberate confiscation of property or
the arbitrary interference by govern
rnent in the management of business.
Question of Excuses.
Perhaps the most important factor
in any business upturn is confidence.
But this does not by any means imply
confidence in an ability to go on I'M
restrained. Too many New Dealers.
for instance, assume that the alterna-
tive of the New Deal is license or I'M
restrained liberty. Too many critics
assume that the desire to do as they
please is the cardinal theme Of the
business mans complaint against Gov
eminent intervention in his affairs.
The truth is, business wants cap
ital which is invested to be conserved.
1t wants an opportunity to earn a re-
turn on that investment and the mo-
ment the politicians step in to make
capricious rules and regulations that
do not bring a fair return on capital
invested there is danger, due to uncer-
tainty and due to unwillingness Of in
vestors to continue to take risks.
The new N. r. A. will not resemble
It's predecessor at all. 1t will be an
experimental mechanism to placate
labor groups and to continue the
search for ways to preserve by legis-
lation certain social standards set up
by the N. r. A. But the new N. R. A.
will be of less and less importance as
a business factor because of the Borah
amendment, which prohibits any deals
whereby industrial groups are granted
immunity from antitrust prosecutions
in exchange for concessions on labor
standards or wage codes.
Senator Borah is absolutely on firm
rx-Io he Rn1, ~
monopolists. and despite much that
has been argued to the contrary by
the defenders Of the N R. A., notably
the President himself, the scheme was
one that soaked the consumer by fore
ing high prices and eliminating COM
petition.
without the N. r. A.
Business is getting along very well
without the N. r. A. Prices may 60
lower in some fields and ought to 60
lower when competition is released
again. AS for wage levels, they will
hardly drop, for the simple reason
that the Government is gradually put
ting more and more people on the
dole and many of the latter are re-
fusing to work at low wages. 1t would
not be surprising if the paradox of a
LABOR shortage occurred alongside of
Government relief to millions of I'M
employed. Already in the skilled
trades there is shortage now.
AS volume of business increases.
wages are bound to rise, because there
will be bidding for such labor as is
available. The Tugwell program of
the New Deal known as the third
economy" calls for continued ex-
pendlture Of many hundreds of mil
lions and possibly billions of work
relief" that will absorb a good manv
workmen and thus contribute to an
artificial, rather than an actual
scarcity of labor.
Meanwhile the amount the Govern
ment pays on work relief will plav a
large part in bolstering up the wage
levels indirectly While the Govern |
ment's policy will be to pay wages be-
low those given in private industry.
the difference between this dole" wage
and the offering by private employers
is apt to be so small as to cause many
workmen to prefer their relief Jobs
with shorter hours and perhaps less
exacting requirements.
Troublesome Psychology.
In various cities it is frequently re-
ported, for instance, that a man on a
dole of SIS week feels, when offered |
$40 a week, that he is being asked to |
work for only IS a week. This |
psychology will prove troublesome |
eventually in developing q market for |
labor when business feels the increased |
demand for goods.
The reports on business conditions
throughout the country following the |
Supreme Courts decision have been |
closely guarded. 1t would be politi- |
cally inconsistent, of course, for an |
administration which two weeks ago |
thought the whole country was going |
backward to the horse and buggy" |
era to proclaim now that perhaps it |
was mistaken.
The truth Is American business and |
industry have real momentum now
and even the prospect of impeachment |
from Congress does not seem likely to
break down the recovery movement
The only threat on the horizon of a
long-range character is the condition
Of the Federal Treasury, which will
show another $4,000, 000,0 900 deficit at
the end Of this month for the current
fiscal year. But the hope here Is that,
when business revives, tax revenues
will increase and emergency expendi-
lures will be Topped of.
Copyright. 1881