Evening star., 1936-01-12
POLITICS TO CAST
GROWING SHADOW
ON TRADE WORLD
Prospect of Bitter Election
Campaign Introduces
Cautious Note.
EXTENSION OF UPTURN
THROUGH SPRING LIKELY
Trend Between Early June and
Late October Uncertain as
Parties Prepare.
BY CHARLES F. SPEARE.

look Is for a sustained improvement in
business throughout the Winter and
Spring, with a steady procession Of
statistics Of production, of earnings
and CT dividends that will be pleasant
to read when set in parallel columns
with those of these seasons in 1885.
In view, however. of the approach
ing presidential campaign. with all
of the bitterness that 1t is developing
and the propaganda that will be en-
ployed on both sides to further it,
it would be a rash person who would
now predict the business trend between
early June and late October
From present indications, the
breach between the administration
and business will widen in the COM
ing months, a situation never helpful
to the processes of industry and Of
doubtful value to the political cause
Of either party to it.
On the other hand. some way may
be found TO salvage a portion Of the
benefits to agriculture and to satisfy
the militant minority now demanding
old-age pensions more vigorously than
unemployment insurance. A helpful
factor would be the payment Of the
soldiers bonus-if it must be paid
without recourse to infiationary meth
DDS.
Budget Outlook Clouded.
II is unfortunate that clearer
picture of the financial requirements
of the Government for the remainder
of this fiscal year, and for the year
i93S-37, could not have been made
in President Roosevelt's budget mes
sage.
This was thrown out of balance by
the elimination of the processing
taxes. when the A. A. A. was DECLARED
invalid. and rendered valueless as an
accurate picture of the state OF the
Treasury in the near future by the
loose estimates Of relief expenditures.
That it showed trend in the right
direction is undeniable. Allowing for
the maximum sum suggested for re-
lief next fiscal year. the budget Is
nearer a balance than 1t has been
SlIlCC 1900 UcCduoC va bAAO oOSdAy
crease in Government receipts and the
fall in the demand for r. F. c. aid.
Taxes collected In the fiscal year 1885
were % per cent over 1884. 1t is.
however, a long way from the goal
desired.
Relief Total Uncertain.
The political debate over the deficit
has not been eased by the most re-
cent figures compiled by administra-
ton authorities. The relief fund is
still the unknown quantity. 1t may
he s1,000,0o0. 900 or $4,000. .oo0, 900.
The probabilities are that it will be
nearer the larger than the smaller
sum. for the change in the unemploy-
men. situation is comparatively slight
and the ability of local governments to
absorb their proportion of the expense
of caring for dependents is not in
creasing.
It is of satisfaction, however, that
the estimate of the Government debt
at the end Of this fiscal year was well
above that likely on the basis OF the
expenditures in sight. Consequently,
Government credit deserves all Of the
approval that washington has given it.
It was one of the most successful OF
New York bankers. judging from the
money he has been able to make for
his stockholders the past year, who
said this week:
I'VE consider the credit Of the
United States unsurpassed by that OF
any other nation in the world and so
we consider the bonds Of our Govern
ment the safest investment that can
be made This institution, by the way,
will continue to hold its long-term
Treasury obligations.
Decision Greeted Calmly.
The SEQUEL to the epoch-making de-
cision on Monday of the United States
Supreme Court, declaring the A. A. A.
unconstitutional. has been vigorous
advance in securities, following tenn
porary confusion, further progress in
the verious indices of trade and a
generally calm acceptance of the
courts opinion by the business world.
Commodities, it is true. have been
unsettled, but not in the degree that
might have been expected from
decree that so much changed their
price status. The removal Of process
ing taxes has led to decline in the
cost to the consumer of certain essen
tial foodstuffs and small drop in the
food average. The most complex situ-
alton is that created in the cotton
market, where the restrictions on pro-
duction may lead to larger crop this
year, with consequent effect on prices.
It is. however, too early to determine
how this will affect other crops and
various farm products, to all Of which
Is Joined the ultimate result on the
earnings of the railroads, Of the farm
implement manufacturers, makers Of
automobiles and those of the national
distributors of merchandise whose
rising profits in the past two years
have come in large part from the agri-
cultural districts of the country.
Trade at High Point.
There was sufhcient momentum to
carry domestic business along even
when one of the main agencies for
promoting recovery had been ordered
to dissolve. This would appear to be
another proof that the present pace
of business was due to the operation
of natural causes and that industry
was steadily becoming Independent
of artificial stimulants. This week the
index of business has reached new
high since the Spring Of 1880. It
shows an almost perpendicular line
from the low point Of last october.
Recognition Of their changed credit
status is given in the recent rise In
nearly all classes Of railroad securities.
CONTINUED on second Pagel.