The dim culty of securing loans from the banks is probably not 30 disturbing to some sections of busi-ess as lack of certainty over the monetary situation. The severity of government supervision, business complains, have turned the banks {nto mere safety deposit vaults. This is a state of affairs which the Administration hag begun to recognize. Business also complains that the Securities Act prevents flotation of new securities and thus prevents necessary business expansion, The money of the private investor can only go into government bonds. Moreover before business thinks of expanding it feels it should receive assurances against government competition and the spread of what has come to be called "state capitalism.
Finally business is disturbed by the fear of heavy taxation. President Roosevelt's budget message last January promised a rapid reduction of expenditures after July, 1934. The Secretary of the Treasury, Mr. Morgeanthau, had to admit in August that future expenditures would be greater than had been anticipated, though past expenditures had not' been 0 great, Nevertheless he attempted to reassure business by claiming that the cost of the New Deal would not be nearly as excessive as some of its critica maintained. The reason why expenditures would be greater than had been anticipated was partly because of the drought but more because private business had not begun to assume as much of the Jead as the President imagined it would when he made his January statement.
The Vicious Circte Recovery has not proceeded nearly as far as the President had hoped, There is a vicious circle. Business lacks confidence because of heavy relief expenditures and relief expenditure are necessary because! business lacks confidence.
The circle, however, is not entirely closed because Business has other reasons for nervousness which the government could remove. There is Ssu influential group in Washington which holds that recovery will be brought about not by reassuring business and trying to restore ite confidence, but by carrying out with even greater vigour the policies so far pursued. This group holds that recovery has lagged because there has not been sufficient spending of public funds. Business in its present state of mind believes that the views of this latter group will prevail and its pessimism grows. It sees the condition of America in the future not as rosy, but as Red. At present there are no grounds for such a belief, but the continued pessimism of business may itself hasten the very condition which it fears.
Text read from the printed page and cleaned; old type leaves the occasional error.