Evening star., 1936-03-22
MARKET REFLECTS
FAITH IN, STEADY
BUSINESS REVIVAL
Relatively Small Reactions
to Flood and Foreign
News Significant.
QUICK RECOVERY SEEN
IN DEVASTATED AREAS
Immediate Losses Greater Than in
West or South, but Effects Are
Expected to Fade Soon.
BY CHARLES F. SPEARE.

BY CHARLES r. SPEARE.
Special Dispatch to The Star.
NEW YORK, March 21.-Proof that
the country is confident of sustained
business recovery is given in the rela-
lively small reactions occurring in the
stock market during the acute phase
of the Rhineland situation last week
and the recent flood tragedy. This is
the more remarkable since stocks have
just completed a years rise amounting
to so per cent. A large proportion of
shares purchased since the middle OF
March, 1895, has been for cash. This
fact explains why there is so little
liquidation in response to foreign or
domestic events of bearish nature.
The floods toll in lives and in prop
erty damage has been heavy. 1t af-
fects wide expanse of territory. The
droughts, dust storms and floods of
1884 and 1885 levied on agricultural
sections of the United States. They
left their impression on prices of food
stuffs and compelled national relief 10
a large group of sufferers on the farms.
Contrast Is Drawn.
In contrast. the floods Of this week
have centered on the industrialized
parts Of the East where manufacturing
and transportation are the factors in
employment So, while immediate
,oe-.. ,,,,., \, ,raatar N, The ,,raS ont
calamity than those in the West and
South, the recovery will be quicker and
the effects outside the zones of de-
struction smaller.
This apparently was the interpreta-
ton placed by those who continued to
purchase the stocks of railroads whose
main lines were disorganized by the
high water and of mills whose machin-
cry was rendered idle by it.
This may have been too optimistic
a view when considering the fact that
every industrial plant within 25 miles
of Pittsburgh and located along the
rivers was at one time shut down,
while operations in the great manu-
featuring units in the New England
valleys of the Connecticut and Merri-
mack were, at the end of the week,
wholly or partially suspended.
The larger question Of national re-
lief has been placed before the country
this week by President Roosevelt in
his supplementary budget message. 1t
is in the nature of compromise and
not o1tooafher sotiSfa rt0rv
Plans Lack Clarity.
His proposals are not so clear as
one might have wished. There is a
lack OF finality in them. Taking ST.
900 100000 from an unexpended re-
lief appropriation for the fiscal year
1886, adding to it $500 ,00O, 900 set aside
in the original 1897 budget for the
C. c. C. and public works and joining
these two with a new authorization of
81 800, 1000, 900, the total, but tentative,
relief item for the IL months to June
80, 1887, amounts to $3,100, 000. 900,
compared with only s400, 100000 more
for the present fiscal year.
This suggests a deficit for 1887 Of
approximately $2,600,0 ,000.0 900, which,
while 81 ,400, 900 900 less than that for
1884. a drop of about IS per cent and
tending in the right direction, is most
serious in view of the total deficit for
the four-year period in excess of $l3,-
OO0, ,000, 900.
This week the national debt has
risen to $31, ,440, 900, 900.
The picture may be slightly i'm
proved by the current receipt of in
come taxes, which appear to have been
about As per cent larger for the March
is installment than year ago.
Compromises Effected.
On the other hand, the compromises
and concessions required of the admin
istration leaders in Congress in order
to effect a reasonable tax bill on un-
distributed profits of corporations
might we'll result in receipts from
this measure insufficient to cover
Treasury requirements. In abandon
ing present sources of income, as the
$994, 4,000, 900 produced by the three
existing forms of corporation tax. the
administration is trading known for
unknown revenues. This is a dam
gerous business.
Apart from its political aspect
there is an increasing demand over
the country for a more conscientious
and locally administered relief pro-
gram.
The facts of increased employment
and of stationary relief rolls do not
square, ever when it is admitted that
exhaustion Of resources and the handi-
caps of age bring a new list of de-
pendents to relief headquarters each
month.
Communities Powerless.
It is obvious that local communities
cannot finance their unemployed 100
per cent. They can, however, de-
termine who are the "chiselers" and
root them out.
1t Is the element which President
Roosevelt describes as those who
are so constituted that they do not
desire to work." who in many in
stances are aliens, who cheat in many
ways In order to obtain relief, that
the taxpayer now insists shall be re-
fused assistance.
Within the flood area lie some of
the most densely industrialized Sec
tions of the country, so 1t is evident
that the effects Of high water will
later be visible in the record Of manu-
featuring output. power production
and car loadings. 1t also will contract
retail trade in the devastated regions.
Consequently, We may expect less fiat.
tering commercial reports for the
second half Of March.
In his budget message on Wednes-
day, President Roosevelt passed on to
the business world the responsibility
for encouraging employment, and
thereby relieving the strain on the
national Treasury for relief.
fr.a,vrtrht oas by North American Nevs.