Explanations vary from those which place the entire blame on the New Deal, to that which sees a Sinliterenspiraey. amongst capital-{ats to encompass Roosevelt's political fin by destroying the value and arming powers of their own assets The truth ie doubtless a mixture all, "Reduction of Governmental pending: taxes which obsteuet buslfess expansion ud enterprise, such as. the Undistributed "Profs" tew: Higher operating costs of the public for vices; increased Wages In industry leading' to rising Gosts" which the Duying, public will not-meet, as has Happened. with motor-ears anu re-Sidential building? distrust and. fear of government policies; and exacting Tegulations governing' new capital issues, resulting in available capital finding, its way into tax-free government bonds rather than taking the: Tisks_ of. Industrial Investment: dise couragement of Stock Exchange speulation brought about by high mar-final requirements and close scrutiny Of transactions; these and. many ther factors have played their part eteating the present deadlock.
An Unbalanced Economy 'The unevenness of recovery in the United States (in striking contrast with. Great Britain) may. be. illustrated by' the gures for residential construction. Though the population had risen by some. seven million since 1929, the monthly average of contracts awarded in 1936 was under '$67 million in 1036 against $160 mil-Ton then. "The potential demand and unsatisfied needs of the country fre enormous Dut the cost of construction in relation to rental value had risen too far, and in. spite of the apparent prosperity of the people they could not afford to buy oF rent the houses they needed. Tu consequence the numerous industries dependent on building construction have had to remain relatively" in-
Steel production which rose. steaily from 1932 has in the last few months dropped with startling rapidity, in the face of an acknow= Tedged heed for new railway rolling stock and. great arrears in uUlity replenishment and construction, Though the consumption of electrical power has been making new records Until recently the companies have maintained that the increased cost of production together with enforced The conclusions that emerge from this rapid review are, first that in Europe as a whole, in spite of all obstructions, there has been a gen-feral recovery running fairly true to form and with no signs of a serious relapse in the near future; secondly, that in the United States, on the contrary, the recovery has deviated widely from the normal course. owing the Impact of the New Deal in ah its numerous ramifications, and for the same reasons it has come to an abrupt stop while still at a much Jess mature stage than in England, Further, that just as the impasse is caused by legislative action so the Femedy may be found in the same Some qualification of this rather bare statement must be made.
Europe there is a recurrent condition of international tension, which may culminate in an explosion without warning; this contingency will "be ever present, until political appeasement has been secured. All" countries are spending gigantic sums beyond their Incomes and so laying up a burden for the future. Moreover, unless conditions rapidly im. prove in America the malaise will Spread to Europe: there can be no Credit and Responsibility In the halcyon days of not 30 long ago Roosevelt insisted on full credit, for the rising tide of recovery. "Make no mistake", he said, "we planned it so." and it he didn't plan the aftermath the responsibility' for it cannot be evaded. There is. a Conqressional election coming along. in November and the trend of business will have to turn Jong before: then it the champions of the New Deal are to retain their seats. No electorate can be placated by an attempt to shift the blame on to other shoulders.
Roosevelt has, in fact, declared that if business does not restore itself the government will step in and take the slack,. At the same time he has. expressed his desire for, and expectation of, an early balancing of the Budget; so here again is another dilemma, for assistance to industry. can only mean a fresh expansion of Federal spending. This is already nvolved in the new Armament programme go it must seem that a return to orthodox government finance is farther off than ever. Inflation, indeed, is once again a factor in the thought of Wall"Strect where only a few months ago the rumour of delation started the debacle in commodity prices. Tt is a grim: commentary on all this that" when Roosevelt first devalued the currency It was his avowed object to five the country a dollar of unvary-Ing" purchasing power.
Main Lines of Action may be assumed that the Gov. ernment has the means to reverse the direction of business once it has decided on the methods to be adopted. The present indications are that the President is still reluctant to give up or modify any of his cherished projects, but if) the industrialists refuse to play according to his rules, since they see no promise of profits therein, it is inevitable that in time he will have to submit, oF lose the initiative to Congress which, will make its own new rules. ion of a general business from. JSome of the difficulties imposed on it, such as the Undistributed Profits Tax and the Capilat Gains Tax, there are three main lines along which action desired. "The first has, been recognized' in the Housing'. Bill already introduced. Considered opinion is that {t cannot bring early relief, and there must be helpful cooperation from the labour unions to foring down the cost/rental ratio, which in fact has recently shown improvement.
UUillues and. Railways The other two are the Utilities-and the Railways. Roosevelt's feud,
Text read from the printed page and cleaned; old type leaves the occasional error.