Evening star. [volume] (Washington, D.C.) 1854-1972, 1939-07-02

events was the weakness in Americs
only by liquidation for domestic &C,
of foreigners.
The average of industrial stock
from March 10. Railroad shares
period, public utilities points. 7
bonds.
The effect of shrinkage in value
Of securities amounting to many
billions of dollars was noticeable In
falling off in the demand for lux.
ury goods and also in the postpone.
ment of housing operations.
Low Points Coincide.
The low point in iron and steel
production and in a number of COM
modify prices conceded with the
time at which the stock mar
kets reached the bottom of the
spring decline.
When it became apparent that
the immediate danger of war in
Europe had passed there was first
an improvement in business senti-
ment and then slow recovery in
the index of business activity and
greater sterilization in the market
for securities than for some COM
modities.
Had there been a definite policy
on the part of the Washington ad-
ministration to modify some of the
irritating tax and labor laws great
er gains might have followed the
roliof fo1f oyor tho ~, v>royol E,,,rn-
pean outlook. "Appeasement," how
ever, did not come either from the
administration or from business in
terests.
AS this is written the promises
for constructive legislation by the
present session of Congress are
not encouraging. Due to this and
to new complications abroad, this
time in China, securities entered
another downward movement.
Mixed With Politics.
|. There is too much of politics
mixed in with measures for modify
ing such features as capital gains
and losses and undivided profits
taxes in the present revenue laws
as well as in those relating to the
rights of employers under the Ma
tional Labor Relations Act to per-
nit the enactment of any but COM
promising amendments. The same
is true in connection with relief
and with social security legislation.
All this New Deal effort has its
justification and is, in its funda-
mental character, upheld by ma
jority of the American people. 1t
was, however, crudely planned and
extravagantly administered. No
harm will come to those whom it
benefits if each agency is placed on
businesslike and equitable basis
The notifications of the Social
Security Act and the ironing out of
phases of the relief administration
are under way. Further adjustments
to correct faults in these measures
will be undertaken. It does not now
appear that any legislation adequate
to permanent credit reconstruction
Of the railroads will be passed at
this session of Congress. On the
other hand, limit to the expansion
of Federal power projects seems to
have been reached, if the features
of the House T. V. A. bill are
accepted.
Blight on World Trade.
The tragic state of the world to-
day, with nearly every nation spend
ing large part of its income,
exhausting its resources and levying
heavy taxes on its people, which
much reduces the amount available
for cultural and social needs. all to
build up an armament that has ter
rife destructive potentialities is, and
must continue to be. blight on bus
mess not only here, but in Europe
If it were not for the constant
threat of war in some part of the
world, which would directly involve
the democracies, one might venture
an opinion that the second half of
1899 would compare favorably in its
results for busine-5 with those in the
similar period of 1888.
Unfortunately, the way out of the
European and Far Eastern situa-
tons is as blind as in the spring
and their effects will continue to
delay recovery.
There is every tangible element
necessary to produce a reasonable
prosperity. Capital is superabun-
dant, there are no excess loans to
industry on securities, or real estate
or on farm property Inventories
of merchandise are moderate. Prices
Of commodities are, of course, lower
than they should be. While this
operates against the producer, it
aids the consumer, and in a period
of great unemployment the fact
that living costs remain compare
lively low eases the relief situa-
ton and checks political radical
ism.
Aside from the strike in the btu
minous coal mines last spring there
has been no serious labor trouble.
On the other hand, there is less
prospect of achieving peace within
the ranks of labor than seemed
probable six months ago.
Pattern Is Clear.
The pattern of Federal Govern
ment is steadily forming into one
which adds to the security of the
individual and the lessening of risk
by the corporation or institution.
This began during the Hoover adj
ministration in the loan to corpora
tons and banks by the r. r. C..
1t was extended after 1888 in the
guaranty of bank deposits and in
the salvaging of home owners whose
mortgages were threatened.
In one way and another it had
steadily expanded to cover numer-
oIlS rrndIIcorS of farm rrodNrtS