The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1936-01-03
BALANCE. HELD
KEY TO REAL
PROGRESS
BY LEWIS HANEY
CPrOfessoE Of Economics,
Now York University

are recognizing both strong and
weak spots in the business out
look. Today I am making
serious attempt to sum up both
sides Of the argument for you.
First let US list the favorable
factors, aS follows:
1. We have had the most sus-
tanned rise In business activity
since the crest depression be-
gan. This includes gains In
the heavy industries" notably
building. ..
2. A more effective policy Of
stimulating building activity seems
probable. Rents are gradually ris-
ing.
3. Bank loans have shown the
greatest increase since the depres-
sion began.
4. The apparent earned in
comes Of farmers and factory
workers have shown considerable
gains, and prospects at present
favor further increases.
5. On the whole, the inventory
situation has improved, both in
industry and trade.
8. Although subject to abuse,
the existence Of "eaSy money" is
to be noted. The accumulation
Of unused balances causes pres.
sure Of funds seeking profitable
uses.
z. A spirit Of caution is rather
widespread. (This Is the good
side Of the existing uncertain
titS.l There Is little speculation
in commodities or real esate, and
forward buying is under con-
troll"
8. Confidence in the Supreme
Court Is mistaken, and the Con-
stitutien seems likely to weather
one more storm.
8. Radicals are split, tending to
reduce the. danger Of hasty de-
structive action. The Democratic
party Is split on the New Deal.
Organized labor IS divided. The
Townsendites and Coughlinitss
are organizing themselves to
death.
TO-. Signs Of greater sanity and
balance appear In peoples atti.
tude toward government waste. A
real tWosided political campaign
promises balance. e.,
IL. Mr.. Roosevelt seems likely
to sponsor business recovery" for
election purposes, which would
force him to soft-pedal reforms"
Now let us look at the unfavor-
able factors. These make an al
most equal list.
/. Government credit and the
banking system are In an UNI
comfortable position on account
Of the unbalanced budget and
the loading Of the banks with
shortterm Treasury notes. This
threatens imitation.
z. There is an abnormslly large
volume Of unemployment (esti-
mated at between 8 and 10 million
personSl. As much employment
depends upon government spend
ing, the problem Of tapering off
is difficult.
8. Foreign trade Is hampered
by unstabilized curencieS and
many restrictions. and interna-
tional jealousies. incidentally, the
worlds gold supply is badly
maladjuSted.
4. The cost Of living is rising.
s.. Price Embellishments exist.
6. Agriculture is badly disrupted,
the normal movement Of wheat,
cotton, and livestock being pre-
vented by government controls and
high prices. ..-.,.
Z. Labor disturbances are .
threat.
8. High taxes, plus the mortgage
We are putting on our future ma
ttonal income, are very burden
some.
Q. Great political uncertainties
exist; not only at home but abroad.
Here we may include foreign war
possibilities. These are mere "un-
certaintieS," and may not turn
out 50 badly. but the point Is that
an abnormal amount Of uncer-
tainty becomes an unfavorable
factor in itself.
10. The hangover Of "emer.
gency psychology" with its de-
moralizirg tendency to make US
depend upon government relief
and accept IlnSound experiments.
On balance, I am hopeful Of
real progress In 1886. On one
hand, the uncertainties created
by New Deal politicians tend to
hold initiation In check. On
the other hand, business recOv.
cry may be able to develop sui.
ficlentIy to make the New Deal
look old. An increase In pro
ductive employment In real
business may accomplish three
things: (D Reduce radicaliSm,
(2) increase tax revenue, ~
lead 20 q balanced Federal bud.
get and sound money.
Then, with real recovery as a
basis, ! we may take our time to
consider reforms as "emer.
gency measures" but on their
merits.
Chicago Livestock
CHICAGO, Jan. 9 lLN.s,>.