While the Court fight was in progress the Administration's chief fear had been that the country might be headed towards a boom of the 1929 pattern. Wages were rising under the stimulus of an egressive unionization campaign led by John Lewis, haad of the C.LO, prices were rising, European optimism with regard to America and pessimism with regard to its own future caused a steady flow of funds across the Atlantic, heavy Government borrowing provided the banks with ample credit and in general a "boom" psychology existed.
Events of the later summer, however, showed the country's prosperity to be largely artificial. A sharp curtailment of Government expenditures, fears that the international situation might lead to war and business uncertainty over future administration policy led to a business recession and a marked decline on the Stock Exchanges.
Nevertheless the President insisted that his Reform Programme should be carried out. He did, however, make efforts to secure the co-opera tion of business giving particular encouragement to the Housing and electrical utility industries. He also reassured the financial world by making determined efforts to balance the budget. He warned private industry, however, that if natural in-austria] expansion was unable to take up the business slack a further period of Government spending was unavoidable.
Text read from the printed page and cleaned; old type leaves the occasional error.