Evening star., 1940-03-09
Possibility Of U. 5.
Speculative Spree
Stirs Observer
AnnoIist Writer Sees
Huge War Orders
Likely Soon
Special Dispatch to The star.

Special Dispatch to The star.
NEW YORK, March 9.--1f you
think that business in this coun-
try through 1910 will be Just so-so-
and many Of US do--your chances
Of being wrong In a way you'll re-
member are pretty good.
For spring is almost here. Mr.
Hitler is in spot where he must
strike soon with everything he has,
and when he does--well, allied plans
for loosing a real cornucopia Of Or
ders here are much further along
than you imagine.
In the current Annalist Kenneth
X. Hoyt, Washington observer for
that weekly, tells about 1t. And
unless what he has been seeing and
hearing at the Capital lately doesn't
mean what 1t always has meant
we are In for another speculative
spree. Only this time the spree
would be much wilder and the
hangover much more excruciating.
Quick Action Likely.
Hitlers worst enemy, Mr.. Hoyt
points out, is time. The longer the
sort of war we have been getting
goes on the worse it becomes for a
wasting asset enterprise, such as
Germany undoubtedly is. Hitler's
only chance seems to lie in hitting
suddenly with everything he is able
to muster, and that soon. Only
spring can furnish the setting for a
dramatic opening of this kind.
To meet such an emergency, Mr.
Hoyt explains, the British and
French would have to start buying
here on very large scale. And
despite appearances to the contrary
they have welf-laid plans to do that
very thing. These plans were not
worked out by the allies alone
They were created with the CO.
operation Of our Federal officials
Plant capacities here have been
surveyed in what seemed to be only q
move toward completing our own
national defense program. 1t is
known that there is nothing in the
law here to prevent foreign financ-
ing of plant expansion by overpay-
ment for initial orders. In fact, the
Treasury has already ruled in one
case that outlays for such expansion
may be credited as tax deductions
until they begin to pay out.
If some of our larger aircraft
factories should suddenly be
swamped with foreign orders there S
way to relieve the pressure on
them, and it came about recently
without any publicity whatever
Under the Army and Navy aircraft
procurement bill contracts may be
given not only to the Lowest, but
may be spread to the second and
third lowest bidder.
Speed Is Essential.
When it comes to commodities
also, Mr.. Hoyt points out speed in
an emergency is essential. The
business of drawing raw materials
over long shipping routes from the
dominions and colonies would be
curtailed. The United States and
Canada would enter the picture in
a large way. During the World
War commodities such as wheat
were speeded from United States
ports while the same products were
left to rot in Australia.
AS to what the British and French
would use for money here, Mr.. Hoyi
intimates that drawback can be
taken too seriously 1t is true that
the Johnson Act and the cash-and-
carry provisions of the Neutrality
Act have been prompting the allies
to husband their available credits
But, he points out, commencement
of heavy fighting would mean faster
spending here, and that In turn
would mean pressure for the cas-
ing of our restraints on credit trans
actions. And then, If the American
public began to feel there was a
chance of Hitler winning. Congress
would quickly modify or repeal the
restrictions.
The effects on our economic sys-
tenn generally Mr.. Hoyt sums up by
explaining that IF a wave Of buying
starts, the stimulus to prices and
business activity can be far greater
than justified by any possible ex-
pansion Of exports.
Vast excess reserves in the banks
are available for the pyramiding of
credit. 1t is conceivable that the
public will start gambling in stocks
again and possibly in commodities
as well. The Federal Reserve Board
has repeatedly warned that it would
be powerless to stop such an infla-
tionary movement once started"
1t is none too soon for business
groups to begin to reflect seriously
on all this, he points out. I'VE
have been going through a danger
ously quiet period When it breaks
changes may come with bewildering
speed"