Evening star., 1937-02-21
POSSIBILITY OF IMITATION
HELD MAJOR PROBLEM
Recovery May Go to Great Heights but
Many Will Suffer By ''Interrup-
tiOns," Observer Says.
BY MARK SULLIVAN.

Court raises the most 1mpor-
tant issue before the Americ, l
people in a generation. One man
having exceptional breadth of infor-
nation and accuracy of thought. Wal
ter Lippmann goes farther He, dis
missing the World War, says this is
the most momentous issue America
has faced since the Civil War. agree.
For discussing Mr.. Roosevelt and
the courts there will be ample time
I suspect it will be months before this
matter is finally passed upon by Con-
gress. There will be ample time and
there will be no lack of powerful
voices. There will be long debate in
Congress, certainly in the Senate. And
in the informal forums of the country,
on the platform and in the press,
there will be repetition of the dis
cussion of constitutional questions that
arose during the years preceding the
Civil War.
Because the court question is so
clearly paramount it sends into
shadow, and will continue to send into
shadow. every minor subject. More
Guiding the radio have the effect of
putting the limelight on one spot,
causing all the people to be intent
upon one subject Yet America has
another problem so portentous that it
can be called minor only in the sense
that it is minor to the court question.
Indeed, if the court were not before
our eyes, most of us would agree that
the possibility of imitation. and the
factors bearing on imitation, would
be our most important and immediate
problem.
The Great Recovery.
About a year ago was talking with
a steel manufacturer about the re-
covery that had so far taken place in
his industry He said: The recovery
so far is not enough to overcome the
rust that accumulated during the de-
pression-recovery is only beginning,
it will go on very much further, it
will last number of years and it will
go to a point beyond anything we
have known in the past"
This mans wisdom was like that
Of an old-time speculator I once
knew; he used to say: Bull markets
always go higher than you think they
are going and bear markets always go
lower than you think they will" Ger
tainly the recent depression went
lower than any one expected it would
It's ultimate depth exceeded the antic-
ipation even of those economists and
others who were at once the most ex-
pert and the most pessimistic. And
doubtless the present recovery will 60
farther ultimately than Is now ex-
pected by the most optimistic.
Recovery, great as it has been. is
probably only fraction of what it
will grow to. Yet it may be that from
now on the momentum will be slower,
the pace more steady and also subject
to interruptions. Interruptions al
ways occur. Recovery never goes
steadily on growing month after
month. Prices o. commodities and
stocks never go on steadily rising.
In France some 10 to Is years ago
there was price rise associated with
imitation, rise which: ultimately car
ried prices to more than four times
what they had been. The record of
this French price rise and imitation
was lately studied carefully by a
teacher of economics in an American
university. He told me that if
French speculator had started in at
the bottom and followed the price
rise to the top; if he had always car
ried his securities on SO per cent
margin-that is, paid one-half on ac-
count-he would have gone broke
seven times before the pric- rise came
to its final top. Which means that in
any recovery or any boom, even an
Imitation boom, there are periods of
extreme recession.
Extreme Imitation Doubted.
We may not have in America any
such price rise as the French one;
Indeed, I am confident we will not.
We may have some imitation in Amer
lea, but hardly any one thinks it will
be so extreme as the French expert
ence. There Is always the possibility
we may not have any serious imitation
at all-about this I express no judg-
ment at this point. But any one can
be confident that the recovery we have
been having in America, even if it is
q perfectly normal and wholesome re-
covery, will be subject to Interruptions,
to periods of slowed-down pace.
Omitting Cat this point) any con-
eideration of possible imitation, there
are other aspects of the present re-
covery in America which make for un-
certainty and hesitation. One is the
existence, apparently, of a large
amount Of unemployment, at a time
when the recovery, by analogy to past
recoveries from depression, ought to
have absorbed the unemployed. In
order to take care of the unemployed,
the Government borrows money and
manufactures money. This borrowing
and creating of new money increases
the Government debt The Govern
ment outgo exceeds its income. So
long as this condition continues, our
economic recovery cannot be normal
or dependable; it must be subject to
disaster. That is as near to an axiom
rs anything in this field can be.
Why should there still be unem-
ployment at this stage of our present
recovery when in the corresponding
stages OF previous recoveries there was
no trouble about unemployment? To
answer that question is to invite more
controversy than could be met in q
limited space. But there Is one fact
about unemployment that is new in
the present situation.
Federal Policy Blamed.
President Roosevelt has announced
and is carrying out policy to the ef-
feet that the Federal Government will
take care Of the unemployed. And so
long as the Federal Government Is
doing that, there are likely to be many
unemployed. There are many who
prefer to accept comparatively small
pay from Government relief projects
for doing the easy-going sort of work
that Government provides, rather than