Evening star. [volume] (Washington, D.C.) 1854-1972, 1937-10-20

1OTCllS up prices D.uia V.-~.n,.
of goods and
taxes faster than the consumers could
absorb them, that labor troubles are
Of his making and that the admins
tration has finally baited business so
much as to destroy its incentive and
its morale.
The suggestion a to what Mr..
Roosevelt should do about it would
be somewhat amusing if the whole
situation didn't have a tragic aspect.
The New York idea is that Mr.. RooSe-
welt should acknowledge the error of
his ways, issue a statement of re-
assurance virtually conceding that
he has been wrong and promising
Wall Street that he intends to be
good from now on.
No Error Confession Likely.
The chances of Mr.. Roosevelt adj
hitting that anything he ever did was
wrong or that lis economics could
as remote as his asking Herbert
Hoover for advice on how to make
prosperity seem to be Just around the
corner There exists in Washington
among the New Dealers. to be sure,
somewhat chasteret feeling.
There is worry aplenty. The Gov
eminent economists are issuing opin-
ions privately every hour for the
benefit of nervous aldom and
there is a good deal of sensible con-
versation going on back and forth
among the Joe Kennedy type of the
administrations friends in New York
in the hope of persuading Mr.. Roose-
welt to create reassuring atmosphere
by public statements. propaganda. etc
But it must be realized that the New
Deal doesn't think it is wrong and
fundamentally the opinion is expressed
here to the reporters by some officials
about the stock market decline that
the market was too high anyway.
That gamblers" are largely response
bic for the break and that things will
right themselves in due time.
To Hoover for Parallel.
CuriouSly enough, one has 10 go
back to the Hoover administration to
find the parallel. Mr.. Hoover thought
the bears" had concentrated against
him to bring about a stock market
decline and it was through his lnitla-
tive that the famous stock market
Investigation was begun by the Senate,
which ultimately brought out most
Of the scandal that furnished the
background or impetus for the passage
later on OF the securities and exchange
act.
Professional bears or bulls are not
responsible for the stock market de-
cline and the administration knows
better, though outwardly it likes to
blame the Wall StreeterS. The truth
Is the market is a reflection of steady
decline over several months in the
business morale of the country due
to New Deal experiments and mis-
takes. The decline started when, last
March. IL was discovered that the
estimates of tax receipts were wrong
and that the undistributed surplus tax
was causing such bad situation inside
business.
This correspondent has the doubtful
satisfaction of having written on the
day after the undistributed surplus
tax was promulgated that, when the
next panic came, the principal cause
would be found to be the tax on thrift
and the tax on sound business judg-
ment which the administration had
introduced in the guise of revenue
yields and social reform.
Drop May Be a Lesson.
l;et taI 10
stands convicted Of failing to produce
the needed revenue and of having
raised Cain with the whole structure
of business If Mr.. Roosevelt, by this
time, however, does not know what
cockeyed economics he has been sub
jected to by some of his so-called
4 advisers, it is not likely that the stock
market decline will educate him on
the point.
has been getting ready to make few
concessions to the conservative or
sound point of view. He has been
letting it be known that he will agree
to the revision of the capital gains tax
and also the undistributed surplus tax,
II they can be worked out on a face
saving" basis.
Likewise the President is going to
drive hard to cut expenses, or at least
to improve the budget showing, be-
tween now and the end of the fiscal
year. Also it is said on good authority
that he is getting ready to put bit
81 pressure on the labor leaders to
e,ft out some of the unnecessary in
terruptions in production due to labor
ssxifs.
Taken all in all, there Is bit OF
. scared feeling here, but it Is not
v41st Wall Street imagines it to be
II y true the President has been ham,
mering away at business so long that
he has brought about encouragement
Even If one agreed with the social
detectives OF the President, and ever
II one assumed that his economic.
might some day work when human
nature Is changed, it must be admitted
that Mr.. Roosevelt Is making the error
Of killing the goose that lays The
eolden eggs. For there can be no biz
increase in tax receipts unless bust
ness prospers and has incentive to ex.
DdnQ us dCblfltlCc dllA SlCdtC JOoo
And incentive and enthusiasm are MOI
incurred by hitting your prospective
enthusiast with q brick every time
there Is q "fireside chat" or message
to Congress.
Business Morale Shaken.
30 long as the capitalist system
exists, and there is no wholesale con-
fiscation of property or introduction
Of communism, the Government mus
depend on individual initiative. Tht
New Deal has done relatively little tx
make business men more social-mind'
ed because It hasn't proved how they
can be social-minded and earn fail
return, too. The imposition of take!
and the arbitrary rise in labor costs