The Waterbury Democrat., 1938-01-03

it a little more troubled.
 FOREIGN-Roosevelt will give more and more attention to this field, and there will be closer CO., operation with Great Britain. The lines between the democracies and the dictatorships are becom- ing more tightly drawn and the United States will come to hold the balance of world power.
 This was graphically illustrated last week when King Carol of Rumania waited to see what reply the United States would send Japan on the Panay incident be- fore forming a new government. The Germans, who now have tre- mendous influence in Rumania, advised Carol that Roosevelt would yield to Japan. The Ru- manian minister in Washington cabled to the contrary.
 In the end Roosevelt accept ed Japan's apology and Europe generally considered it a sur- render King Carol immediately threw his weight to Germany. He formed a Nazi government.
 Rumania is long way from the United States, but Carol fig ured the democracieS were not going to stand up against the dictators, and that France, his former ally, was a weak reed to lean on.
 ARMAME N T-Roosevelt will urge construction of at least three dreadnaughts, two aircraft car- riers, with supplementary cruisers, deStroyers and submarines. They will be laid down this year.
 The air forces of both the Army and Navy will be considerably augmented.
 POLITICS-The fight betweer Roosevelt and the conservative ing of the Democratic party will continue, probably becoming more bitter. There will be just as much wrangling in congress, just as much rebellion against party floor leaders.
 The Democrats are certain to lose bloc of seats in the House and may lose some in the Sem ate, but there is little likIehood of losing control in either chamber.
 Roosevelt probably will desert his traditional policy of keeping out of Democratic primaries, and throw his weight against re- actionary Democrats who knifed him. The fight is shaping to- ward drive by Old Guard Dem- ocrats to preevnt him from nam- ing his successor.
 BUSINESS - All indications point to further declines in busi- ness and employment during the next two months, with the de- scent flattening out in March. Thereafter conditions should im- prove slowly but steadily.
 Experts believe it quite possible that the whole year of 1888 will be as good as the whole of 1897.
 BUDGET-It will not be bal anced. In fact the deficit will be as great as or greater than last year.
 INFLATION-The issuing of more paper against the sterilized gold now hoarded in Kentucky is a distinct possibility. The pa- per would be used to buy up tax exempt government bonds, forcing the holders of these bonds into other investment channels.
 TAXES-Despite the bowl for elimination of the capital gains and undistributed profits tax, the main principle of these taxes will not be modified. There will be changes, but the changes will be to help the small businessman.
 The income tax base also will be broadened to include sI large bloc of hitherto untaxed lower
 bracket incomes.
 WAGES AND HOURS.-Pros- poets of new wage-hour bill are uncertain, despite the Presidents renewed demand for one Chances are against enactment of any bill which means much, but some kind of gesture will be cooked up, under pressure of the coming elec- tions.
 FARM LEGISLATION-The final crop bill, less drastic than the Senate version, but more regulatory than the House meas ure, will become law within the month.
 RELIEF-The new appropria- will be at least $1,500, 100000 and may run over two billion. Last fall, Roosevelt planned on an even billion.
 HOUSING-The new home building bill will be patched up very quickly by House and Sen- ate conferees and will be given final approval before January 15. No real building boom is expected however.
 REORGANIZATION-The Presi- dent will be given his six White Ho,1co cacrotarioc oYI a y,au, Do