Evening star., 1939-01-15
Crucial Test Awaits
Business Aid Policy
BIZ Frederic J. HaSkin.

prospects are heiQ out Tor gOOd or Ill 1Or
the ensuing twelvemonth and, while 1t
is customary to sound an optimistic note,
in keeping with the spirit of the season,
there always are some pessimists. An
examination of what has been said by
both optimists, who are in the majority,
and pessimists, indicates that the year
will be crucial.
While but few business enen believe
that lasting prosperity can be brought
about by a program of Government
spending, 1t now is fairly generally ad-
mitted recovery can at least be started
by such policy. The gigantic expendi-
lures which marked the Roosevelt ad-
ministration unquestionably stimulated
business. but it is equally beyond ques-
ton that a slowing up in that process
brought about the disastrous reaction
which came in the summer of 1887.
There were other factors, too, of course,
Again businessmen are pretty much
agreed that the new spending program
which started last June was responsible
for the vigorous upturn which marked
the summer of 1888 and the following
months, even though, normally speaking,
the gains could be regarded as unseason-
able. More Government spending is ex-
pected to continue in 1899, and certainly,
business conditions today are far ahead
of what they were year ago.
There is similarity in both depres-
sions and recoyeries. Once depression
starts it is more than likely to gain mo-
mentum. The same has been true OF
past periods of recovery. To be sure in
past periods of recovery there were no
such programs of Government spending
as have been experienced since 1888 1t
has been seen that the recovery which
marked the first burst of Federal spend
ing did not achieve adequate momentum
to maintain its pace The crucial point
for this year is whether this new pro-
gram will be large enough and keep going
long enough to make certain that the
necessary momentum will have been
generated Millions of Americans have
cranked automobiles and some have
primed old-fashioned pumps and they
know that there comes a point when
the cranking and the priming can stop
e4lo VAC oStAS4ty SO dilCdu ldSlCl llldll
ever. That is the point this year which
will see an epochal test.
There is one big difference in the stu
alton this year, however, as conlp~rcd
with the earlier starting effort As loIl
as this is democracy there will be mil
lions of men aligned in opposite camps
of opinion on Government policies 1t is
Of the essence of democracies that never
is there complete accord 1t cannot
fairly be gainsaid that, during the earlier
years of the New Deal a very large group
| of financiers, large employers and big
and little business men, even though 1t
cost them hard cash, were mot wholly
sorry to see the New Deal programs fail
Now, while the Democratic party re.
mains overwhelmingly dominant in Con.
gress and in State governments, the las
elections showed the first sign of reac-
ton. Election victories, which, in former
years, would have appeared relative!
slight assumed larger proportions. There
appeared to be turning of the tide. 81
another element in this crucial. year
| arises from the question: Will thes2
! masters of business who were not sorry
to see the New Deal measures fail, re-
verse their tactics and add their weight
to the forward pull. There are many
| indications that they will
What Congress does will be an impor-
tant factor, but experts in forecast In
| that realm are much of the opinion that
! Congress will not speedily enact any
major legislation beyond the appropria-
ton bills. No new experiments are ex-
pected to be proposed. 1t is altogether
possible that there may be some repeal
measures relating to legislation which
many branches of business have not
| liked or, if not outright repeal, substan-
tial modification. Some functions which
have been distasteful to business may
not be extended when they run out In
word, the feeling at the National Cap
ital is that business need not be appre-
hensive about Congress.
There are many people in the country
/! who would like to see Congress proceed
| with experimental legislation and au-
thorize huge expenses, but it is doubtful
| if they belong among those who can
| give the biggest material lift to recovery.
Your long-term historian quite prob
ably will be inclined to castigate the
groups of business who retarded the first
recovery efforts. They will be charged
with dog in the nanger attitude.
Their private comfort was assured and
they withheld support from idealistic
f! experiments Their view will likely be
the prevailing one, but other historians.
if this years recovery proves lasting. will
point out how nations have been setard-
ed by innovators
The reason why this matter of opinion
and mental attitude has such bearing
on this crucial year is that the question
of the availability of new capital Is in.
volved 1t is matter of general knowl-
edge that masters of great resources
have refused to make long-term invest
ments, or, in some cases, any invest
ments at all while the very form of gov
ernment seemed to be threatened with
| change. If, as has been suggested, the
last election has worked a change, it may
we'll be expected that floods of fresh
capital will be pouring forth. If this
proves true, first the Government spend
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