The Waterbury Democrat., 1938-04-19

Washington, April 19 - One im- mediate aim of the new Roosevelt spending lending program is the creation of another infationary boom which will revive business ac- tivity.
 Obvious already is the fact that MT. Roosevelt is not going to get the united front against the de- pression which he hoped to align behind this program. His consistent enemies will be reinforced by an army of as yet indeterminate strength which is composed of those who believe that pumping more fed- eral money into the economic sys- tenn is not way to end the depres- sion.
 Some See Boom At one extreme are critics who argue that the new Roosevelt pro- gram is sure to put the country on the rocks and at the other are New Dealers who confidently anticipate really spectacular boom. In the lat ter category, for instance, are one or two members of the SEC who have anticipated such rapid stock mar ket rise that they have been dis cuSSing amendments to the SEC rules.
 But whatever happens in the next few months seems most like . Iy to be based on good or bad psychology, since any effect of the programs monetary maneuver- ings admittedly will be phychO- logical effect ard the first real big new money to get into the stream of purchasing power will be that involved in the public works phase, which can hardly get oper- ating before late summer or fall.
 Seeking to avoid undue pessimism or undue optimism, this writer can report government economists be- lieve the programs chief immediate effect will be to halt defationary forces which until now have been spiraling at an alarming degree.
 This group happens to include those who accurately foresaw the present depression. Members of the group also thought there would be a spring rise" in busi- ness and when that failed to mate rialize went running to the higher ups to urge inf1ationary action to prevent what they feared might be real panic.
 Hope For Levelling-
 The most these experts really hope for the next few months is that there may now be some cor rections" in certain lines of business which will level off the previously down -curving chart-lineS of bus mess activity and employment.
 Business customarily has an up-
 turn in the spring and a down.
 swing in the summer as result
 of what are called seasonal
 factors. But instead of an upturn
 in March, business actually took
 dip.
 The hard headed boys now hope
 that, as a result of the spending
 lending program, the traditional
 summer downswing can be avoid
 ed. Even that, they believe, would
 be a real gain and would leave
 better foundation for the pickup
 which nearly everyone in the ad-
 milistration fondly anticipates in
 the fall.
 If nothing had been done to avert it, the economists are sure, the summer slump would have been quite pronounced. The out look for retail trade, an extremely important factor in t he business picture, was especially bad.
 Program Psychological
 And of course if the spending lending program is not in any way effective, the obvious inference is that business will keep right on Slumping into the summer.
 But the economists interviewed
 by this writer think that many in-
 dustries will be infected by the
 hope of new business, that many
 plal;ts which might soon have
 been on the verge of closing will
 take new heart and that admins
 tration promises of reinforced
 purchasing power will keep bus
 mess off lower bottom until new PWA contracts begin to affect the
 situation.
 All this assumes that Congress will pass those items of the new program which require it's approval. The chances are that it will. But chances of the Supreme Court plan, the reorganization bill and wage hour legislation also were, at one time or another, very bright.