The Waterbury Democrat., 1938-04-01

- to materialize.
 The cheery expectations for a boom, nursed so consistently and optimistically through the winter by the President, Secretary Mor- genthau and other inner council wish thinkers, while they sat on their hands doing nothing, have vanished into thin air. Events have proved their hopes to have been as futile as pipe-dreams- just as various government econ- omists frequently warned the President.
 The plain, unadorned facts are that despite some signs of ex- banding activity in the building industry, the nations economic picture is as sour as curdled milk.
 Railroad car Ioadings con- tinue weak, power consumption, a tcll-tale indicator, is down, auto sales are tagging, retail trade likewise, textiles are feeble, and steel production, while slightly better, is still in the dOldrums.
 The spectators and market operators, whose business 1t is to know what is going on, did not fail to grasp the import of these conditions. They knew they meant a bad second quarter. So the Wall Street boys unloaded, and prices went tobogganing. That is the whole story.
 More Spending
 The White House advisers who have been urging the President to take aggressive action are de- irving some satisfaction out of the gloomy picture, in belief that it will strengthen their pleas for a new spending program. They have been dinning such a course in Roosevelt's ears since last Octo- Der, but until recently made no headway against the budget-bal- ancing chorus of the Morgenthau group.
 Now, however, the spending ad- vocates feel that time and events are playing into their hands, and that the President will have to unite the purse strings. To emphasize their arguments they prepared some highly significant figures for his unhurried consid- eration at Warm Springs, show ing the direct connection be- tween government spending and business conditions. This is what the figures show:
 That during the 1935-36 as- cent from the depression, the government pumped net aver age contribution of $250, 00,000 a month into the economic sys- tenn. Beginning in February, 1887, this net monthly contribu- ton began to be curtailed, dropping to $89,0O0, 900 in Aug ust. The result of the cOntrac- tiOn was instantaneous. In Sep tember stock prices started plummeting and by November the recession was in full swing.
 As the governments net outlays continued to shrivel, the down. ward course of business continued at a faster and more precipitous pace. Last August, the index for industrial production stood at IF. On the first of this month it was 78, a loss of 39 points.
 THIS IS THE MOST ABRUPT CRASH IN THE HISTORY OF AMERICAN INDUSTRY.
 Today business activity and en- ployment are back to the early 1884 level, when the effects of the first spending program were first beginning to be felt. In other words, the recession of the past six months has wiped out all the gains made in 1885, 1886 and the first half of 1887.
 TODAY THE COUNTRY, ECONOMICALLY, IS BACK WHERE TT WAS WHEN THE NEW DEAL REALLY GOT UN- DER WAY.
 Three Musketeers
 Credit for the Administrations humping Supreme Court victory on the Holding Company Act belongs to three men-Solicitor General Bob Jackson and brain trusters Tom Corcoran and Ben Cohen.
 Cohen was the chief author of the law, Corcoran was instru- mental in putting it trough Congress, and all three formed the governments legal phalanx which successfully defended it against utility attacks in two and a half years of bitter court battling.
 This judicial offensive was one 0f tba rooct t1OUarfJiI and