Evening star., 1935-12-31
Constitution Challenge Seen
Marking'35 as1ransition Year
U.S.. Must Wah Longer to Kno,c Exactly
Ho,o Far Congress Has Transcribed
POvers, Observer Declares.

United States during 1880 and 1881.
The degree of unsettlement which
has been apparent in the last three
years on account of the instability of
currency conditions is, of course.
vital consideration in any appraisal OF
world conditions America has not
been alone in cropping with the none
try problems. 1t is difficult to view
in proper prospective the effect that
the devaluation of gold and the Gov
eminent policy Of buying silver has
had upon our own trade with other
countries. The full effects of none
tary changes are never visible until
years afterward.
Monetary Policy and Tariff.
Certainly we are witnessing in the
world today strange merger of mon
etary policy and tariff warfare, so that
it is hard to tell where one begins and
the other ends nowadays.
Perhaps the most important event in
the year 1885 from the standpoint of
world trade was the proclamation of
the Canadian-American reciprocity
treaty and the virtual STERILIZATION of
the American dollar in terms of the
pound and the franc. Fluctuations
have not been the result of any delib-
crate effort on the part of the United
States, but due entirely to circum-
stances of an internal character aris-
ing in foreign countries.
The readiness of the United States
to reduce tariffs, even though the
policy is applied in a limited way
through reciprocity, is a sign that the
United States chooses the enlargement
of world trade in preference to domes-
tic allotment plans which were so
popular two years ago.
On the whole, American trade policy
took a step forward with the compile
ton of several reciprocity treaties, and
the world now knows that the United
States intends to promote world inter-
course by removing barriers wherever
possible.
Industry did its part in 1885. II
strained every nerve to get itself ad-
justed to the new condition. On the
whole, the year represents definite
progress toward recovery though, to be
sure, many businesses went to the wall
and painful readjustments were nee
essary as the fortunes and hazards of
the business world descended upon
them.
Decline in Real Wages.
The return to competitive warfare
which was stimulated by the N. r. A.
decision, did not, rs was feared by
some, result in general reduction of
labor standards or income. Unfortu-
nately, of course, there has been a de-
cline in real wages because the cost of
living has gone up. But in the latter
part Of the year 1885 there began to
be a wider recognition of the impor-
tance of trying to give the purchaser
more for the dollar-price reduction.
This theory, which was given national
attention through the Brookings In
stitution reports, is today vital part
of industry's attacks on its own prob
lens
Any survey of the year 1885 must
take into account the remarkable part
played by the financial communities
in handling the refunding of corporate
debts. Unquestionably the refunding
operations have been carried on at a
great saving because of the low interest
rates that have prevailed. The So
called cheap" money policy which the
Treasury has encouraged has made it
possible for corporate refunding to
take place on large scale, though 1t
is regrettable that new capital is not
coming into industry as it should.
A very small proportion of the
financial issues that have been floated
in the markets Of the country can be
attributed to new money. But un-
doubtedly the refunding operations
have relieved the banks of many cap
ital loans which they were carrying
and have released the corporations
themselves from handicaps and bur-
dens that were indirectly retarding
their own forward march.
OiloIiCcu ny tiic AieiSo VI Oui PCo-
pie and perhaps the most unSpectac-
ular Of all the legislation on the stat
ute books, yet in some respects the
most important, is the operation Of
the so-called section "77B" of the
bankruptcy law. 1t is really not a
bankruptcy statute at all, but a
method Of reorganization of corporate
debts to prevent the terrible defiation
of bankruptcies. The law has removed
most of the obstacles which used to
prevail when small minority Of
stockholders or creditors could hold up
those who were La position to reor-