Evening star., 1937-09-30

the budget.
Mr.. Roosevelt himself betrayed his
Inner concern about the fiscal sltua-
ton when he interpolated remark
about it at Cheyenne and then again
In his Bonneville Dam speech. He said
onlv q few words on each occasion,
but he reiterated his pledge to balance
the budget, and got the necessary
headlines on the subject.
And therein lies the nubbin of the
whole problem Of business readjust-
ment. Government expenditures in
certain lines are slowing down and the
process is very painful, indeed, be-
cause the business world is not in a
position to take up the slack caused
by withdrawal Of Government opiates,
otherwise known as pump-priming.
Arbitrary Factors Imposed.
The reason why business cannot alb
sorb the idle workers or why the
masses do not increase their purchas-
Ing power is that the New Deal has
imposed several arbitrary factors that
raise havoc with the whole economic
system. One of these-the undistrib-
uted surplus taX-is the most def1a-
tionary and destructive piece of legis-
lation in so years.
There seems no doubt that consumer
resistance has started in earnest in
many lines of trade. The poor people
whose pay envelopes have not been
and probably will not be increased
under the New Deal are being asked
to buy products made by persons
whose pay roll has been materially in
creased The number benefited in
Increased wages is small. relatively
speaking, but the monkey wrench
thrown into the price structure is big
enough to produce considerable
diminution in purchasing power on
the part Of the unorganized workers.
The secret of business improvement
always is in the increase in volume Of
goods sold at reasonable prices. AS
prices rise unduly volume drops of.
The fixed income groups and unor-
ganized workers constitute the bulk OF
the Nations working population and
they cannot exchange their present
earnings for the higher priced goods
produced at the new labor costs.
Acts as Vicious Circle.
The only alternative Is to find a way
to increase the total earnings of the
M1organised group. This will not
happen unless there Is an increase
in production. This in turn Is i'm
peded because trade barriers inside
the United States to the exchange OF
goods between groups Of purchasers
are steadily created by the acts of the
Roosevelt administration itself.
In dozens of different lines the
Government is killing the goose that
lays the golden eggs of employment.
One Of the principal offenders is the
National Labor Relations Board and
It's examiners, who are harassing en-
ployers to such an extent that they
cannot do any planning. Collective
bargaining is being construed as giving
right of collective bludgeoning Indi-
vidual manufacturers are being COM
PEELED by Government encouraged
unions to shorten hours and increase
pay rolls beyond the point that man.
ufscturers can expect to sell their
goods to the public at profit.
The collusion of governmental power
and economic leverage on the part OF
q minority Of the Nations workers has
grown to destructive proportions in
recent months, so that wholesalers are
afraid to stock up because they think
consumers will not buy and producers
are afraid to refuse to grant labor's
demands because of threatened strikes
and bulldozing by the labor board.
The result is that the producers are
trying to pass the labor costs on to the
public and the public is resisting.
Seasonal Pick Up Fails.
The trend began to be noticeable
several weeks ago, but was deemed to
be part of the seasonal slump of Sum-
mertime Now that the Autumn sea-
son is here the expected pickup has
failed to materialize and the trend of
business continues steadily downward
Labor leaders know that, when
strikes occur, the Government relief
rolls will be used to assist them. Man
agement knows that, if it attempts to
employ idle workmen who want to
work in place of those who ask unrea-
sonable pay increases, intimidation
will be brought to bear. Either gov
srnmental power will be used to pre-
vent strike breakers from being en-
ployed or else local authorities con-
trolled by labor unions will overlook
outright tactics of coercion and vio-
ience in picketing. There is no check
in labor's demands, so labor unions
are, in many instances, asking the
impossible in wage increases.
Stimulated by Mr.. Roosevelt's cry
Of hate for all producers as economic
eoyAlists," the demands Of labor are
growing even as the business situa-
tion has grown steadily worse. Small
business men as well as large busi-
nesses now find themselves pinched.
Take the undistributed surplus tax
It was gleefully asserted by the ad-
ministration experimentalists that this
would bring in billions of revenue. All
argument about the dangers of the
tax was brushed aside as blind re-
dictionary nonsense.
Relatively Little Revenue.
Today the effects of the tax are to
be noted far and wide Relatively
little revenue has been collected. Big
business has had to distribute its
earnings, so it cannot husband re-
sources for expansion of facilities. II
attempts are made to float capita
loans, there is the awkward and for
bidding situation created by the Gov
ernment's own restrictions on capital
markets. The unbalanced budget has
brought to the financial markets much
uneasiness. Few issues of securities
have been floated this year.
Tho companies which need money
for expansion do not want to borrow
ct the banks. The latter are not sup.