Unlikely; Business Wants Return to Fiscal Sanity European events have pushed the Administration's business "appeasement" policy into the background, but even without these developments it seems likely that policy would have become less and less of a market factor. Wall Street was sceptical of ihe "appeasement" programme when it was launched. It remained so after the much-heralded Iowa speech of Secretary Hopkins. And it is still sceptical. "Sceptical" may not be precisely the right word, although contemptuous" would be too strong, states a British financial journal.
If one can generalize on such things, it would probably be fair to sny that the average businessman and banker has ignored the kindly words Which some of Mr. Roosevelt's lieutenants have been broadcasting because he doubts that they can or will be translated into action. As a programme, "appeasement" is not con-Sidered of practical importance, but as conerete evidence of the swing of' Political opinion it is given great weight.
In the first place, business has heard reassuring words from close to the Throne before. Peace with the public utilities was promised just before the close of the 1936 campaign. Later there was talk of a "breathing spell" Neither materialized. Granting that those close to the Throne mean what they say this time, the fact remains that they have done most of their talking while the President was vacationing in southern waters. To date Mr. Roosevelt has had nothing better than lukewarm comments to make on the programme, and if responsible Washington information is to be credited, he is very half-hearted bout the whole thing.
Wall Street realists are asking themselves what the President could do to translate Mr. Hopkins' words into action. Business wants a return to what it considers fiscal sanity. 1t knows the Budget cannot be balanced in the near future, burat least it would like to see some effort made to control expenditures and build up balanced tax structure.
Can Mr. Roosevelt do either of these things with political impunity In the matter of expenditures, the New Deal has all along made its political appeal to the "lower third." who were "ill-fed, ill-housed and ill-clothed." This population group is the backbone of its political strength. Therefore, it will not retrench on relief, farm benefits or other forms of Federal aid. For proof, one has only to listen to the President's current insistence that Congress restore the $150,000,000 it lopped from relief appropriations this session.
Spending Must Go on Humanitarianism aside, how can the President reverse the policy of beneficial deficit spending announced in his Budget message of last January Such a volte face is not made in practical politics—indeed, there is no indication that Mr. Hopkins wants him to do it, for his Iowa speech extols the virtues of Government-manufactured purchasing power.
On the matter of taxes the President is similarly faced with the neces sity of a reversal of policy if he is to give business what it wants, The undistributed profits tax, the capital gains tax and high top-bracket income-taxes have all been stressed by the President as essential to the prevention of over-concentration of wealth and purchasing power. In this philosophy he is backed by the Leftist group, whom he must hold if he is to re-elect New Dealism in 1940.
Business wants constructive railroad legislation. Mr. Roosevelt has effectively prevented its enactment at this Semion by injecting the wholly political subject of regional freight rates for the relief of the South. Like the tariff, this subject is political dynamite which has become a red herring Across the trail of the fundamental troubles faeing the rails. Regional rates would be so revolutionary in the railroad structure that they could easily dwarf known difficulties by creating new ones.
Text read from the printed page and cleaned; old type leaves the occasional error.