Evening star., 1938-10-23
Better Business Seen
Through 1889
By OWEN L. SCOTT.

Economists whose advice reaches the
White House are more unanimously con-
fdent about the immediate future for
American business than at any time in
recent years.
There is agreement that the recovery,
first sighted In June after the most pre-
cipitous business decline on record, is to
continue-with no more than brief in
terruptions-through 1899 at the very
least Business and Government policies
will decide what happens thereafter.
Recovery to date is remarkably vigor-
Gus. Neither a war scare In Europe, an
election campaign in this country, nor
price upsets in agriculture. In steel and
in oil has checked the progress toward
greater industrial activity.
These first months Of gradual, appar-
emily shockproof recovery are credited to
two principal factors. One is the re-
stocking Of merchants shelves The
other is home construction. In this last
depression Government quickly poured
out dollars through w. p. A. as partial
Offset to the now Of dollars that industry
stopped with the discharge of workers.
The result was that consumer income
held quite well and goods went into use
faster than they were produced. Buying,
to replace goods that were used UP
finally was forced. At the same time
the Government also made 1t easier for
individuals to borrow money to build
houses, with results that are apparent
In rising construction totals.
But interest now centers on what Is
likely to happen In the months ahead.
Recovery Of one-third Of the ground
lost in the swift but now receding depres-
sion of 1887 still leaves millions OF unem-
ployed, a vast amount Of idle plant and
billions Of dollars of bank deposits that
are doing less work than ever before.
A reviving automobile industry Is ex-
pected by. the Governments economists
to provide work for part Of the unem-
ployed men and part Of the still idle
plant The motor industry is offering
an improved product at lower prices
and its product is coming to a market
much less glutted with used cars than
was the case year ago. Large-scale
public works, to get under way on q
rising scale during the winter and spring,
will provide orders that mean jobs for
skilled workers and for the plant of the
heavy industries.
Even now the Department OF Labor
reports that half million more Jobs
are being filled In the manufacturing
industries than was the case in May.
Factory pay rolls are higher by millions
OF dollars weekly. At the same time the
Federal Government is adding more
than 5000, 900, 900 a month to the stream
OF purchasing power in the form Of bor-
rowed dollars. This addition will rise
above $500 O0O, 900 month in the period
just ahead.
The result Is strong medicine for an
anemic industrial system.
But Precident Roosevelt is suggesting
more strong medicine. The President
finally sees that the United States has
been deteriorating economically while
much Of the rest of the world has been
strengthening itself. While Government
and business have fought, this countrys
once unsurpassed industrial plant has
been neglected, millions of trained work.
ers have been allowed to lose their skills,
untold wealth that could have resulted
from the labor of millions of idle men
has remained undeveloped Men are
Idle, machines are idle, money is idle,
skills are undeveloped
In the modern, fast-moving world.
nations cannot afford the luxury of
ldieness and depression If they are to
maintain their positions-as Great Brit
ain and France are learning when it
might be too late.
Mr.. Roosevelt senses this fact in max
ing up his mind to turn the thoughts of
the people of this country to national
defense
Defense, as the President now sees it.
is not necessarily to involve the biggest
navy in the world or the largest army
or air force In the world. Rather, de-
tense under modern conditions involves
an industrial plant and a TRANSPORTATION
system geared to greatly increased pro-
auction and meshed in with the needs
that might arise for armament def
clences IN electric power producing facil-
ltles or in modern transportation eouip
ment are vitally important.
In the name of national defense presi-
dent Roosevelt can find basis for SET
ting his long fight with the utility in
dustry and can produce a reason for
proddng Congress to force some Quick
solution to the now critical railroad prob
lem. The President, too, can use ma
tlonal defense as reason for imposinp
new taxes to finance armament and
thereby to help solve the problem of un-
balanced Federal finances. This same
reason can be advanced in seeking to
induce industry to give up its opposition
10 New Deal reforms and to seek some
basis Tor future cooperation.
If to the forces of the present recov-
cry are added enlarged armament ex-
penditures, increased spending for ex-
pansion in the electric utility industry
and some new spending by railroads as
a means of undermining their plant, this
will spell broad advance.
The fact is that the Governments ad-
visers on spending policy are beginning
to warn the White House that dangers
of speculative boom lurk in the too
rapid upturn in industry. They are urg-
ing that close watch be set on COM
modify prices, on stock market prices
and on the rebuilding of inventories.
An outbreak Of speculative fever will
be accepted as sign Of danger to the
recovery movement. But so long as un-
due speculation can be avoided, there
is confidence on the part of the Govern
ment planners that the outlook for busi-
ness can be brighter than at any time
since the early 1920s. This outlook
would brighten even further If business
and Government now could call off a
fight that has been costly to both sides.
On its part, American industry now
has plenty of evidence that, despite New
Deal reforms and contrary to popular
belief, the New Deal itself has been ac-
companied by vastly expanded indus