Evening star., 1938-06-24

ness psychology, if
not OF actual business conditions.
Searching for reasons why the mar
ket has started upward and with such
precipitate ascent, four things have
doubtless contributed to the improve
ment:
First, Congress has just gone home
This is always interpreted by the busi-
ness community as a sign that the
legislative process has ceased for the
time being and that business can ac-
curately appraise the extent OF the
restrictions it faces-at least for an
other six months or more.
Second, the administration has been
signing authorizations for public
spending at rate OF speed scarcely
paralleled in any previous period Of
spending. This means orders right
away for all sorts Of raw materials, all
sorts Of fabricated products and &C.
tivity for thousand and one broker
age or service businesses which feed
on public works projects.
Third. the administration has turned
on again the voices Of reinsurance, the
men in the New Deal who are often
styled as conservatives" but who al
ways come to the front when a crisis
has arisen and tell businessmen they
have nothing to fear-at least nothing
till after the next election
Fourth, the rather definite impression
Is growing among businessmen that
maybe they really will have less to fear
after the next election, not because
Of any mellowing by the administra-
ton but on the contrary, because the
American people will have elected next
November more Senators and Repre-
senAtives committed against New
Dealism than have been in Congress
heretofore.
Conservative Drift Seen.
Recent primary elections reveal, at
least to the satisfaction OF many
business men, that there Is con-
servative drift on in the country.
and that the trend is toward a check
ing Of New Deal extremes. This Is
far different thing, Of course, from
a swing back to the old days or to q
repeal OF the major legislation now
on the statute books. But 1t has
never been so much the laws as their
manner Of administration. and not
SO much the general purposes of the
laws but the corrective and supple
mental amendments omitted which
have caused business men to be dis
turbed.
There are plenty Of things to cause
uneasiness to business, Of course. and
these have by no means disappeared
from the scene. But that tangible
something called confidence" is
showing some signs Of growing more
substantial because Of the recent pri-
mary elections.
Another possible reason for the up
turn is the stock market. assuming
that the market usually anticipates
business improvement, Is that Amer
lea has for the last six months suf-
fered . period Of stagnation. When
ever . country stands still. eoonorni-
cally speaking, it begins to use up
materials and goods. Inventories get
very low indeed. There are evidences
that stocks Of goods and materials
reached . low point, and now, with
the push given by Government spend
ing. enough courage has been sum-
moned to result In Q better psyche
logical feeling than We have witnessed
in several months.
fundamental Faults Exist.
This doesn't mean that the worries
Of business men as to the funda-
mental troubles in Washington have
by any means been alleviated COM
pletely. Far from 1t. Until there
is . tackling Of fundamentals no
recovery Of . permanent character
can be anticipated. The recession or
depression, or whatever the down.
ward curve which began last autumn
can be called, has been one Of the
most precipitate in many years. Doubt
less the pendulum swung unneces-
sarily far on the momentum Of pes
simism which swept the country when
Government spending stopped in
1897 and It was found that nothing
had been done by the administration
to encourage private business to fur
nish q substitute In the way Of private
spending.
The present movement. therefore,
may well be called corrective develop
ment, and there Is every reason to
believe that the dependency which
has prevailed for some time will be
considerably relieved-as, indeed. 1t
was for an interval once before
and that the new mood may continue
till the present fiow Of dollars Is ex-
hausted and the country faces again
the problem Of how to substitute pri-
vate spending for public spending.
Only this time there Is IN opportunity
for q new Congress-when 1t regains
its independsnce-to do tho things
that will really make private spending