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Show New Deal Woos Business ' First of Two Article ' With 1M looming ahead, the administration needs national recovery re-covery not enty for its social eenetlta, bat aa a political neeee-sity. neeee-sity. At this newest trees road ef the sew deal, current signs indicate indi-cate a tarn to the right with "appeasement" "ap-peasement" ef bnslness as the geaL In this, first ef two keenly keen-ly esauyucal article ea the sitma-ttea, sitma-ttea, John T. Fryna, noted eeeae-snist-aathor, reviews the eondl-horn eondl-horn which, ta hsj eptniea, has up Is aew rauifd recovery te beg dawn. , By JOHN T. FI.YNN WASHINGTON No one with an eye in his head can move about Washington these days without perceiving that a change has corns over the spirit of the administration on the whole subject sub-ject ef business. Some observers there call It the "drift te the right" Secretary Harry Hopkins Hop-kins objects to that He says it ia bad manners to greet a gesture of compromise with that sort of characterisation. Perhaps it is. The important thing, however, ia te and ascend the phenomenon here for what it actually is. Ws have heard the president's promise ef "no more taxes" the Hopkine "appeasement" speech -the lifting of the "plague ea both your houses" In the effort to have the CIO and, the A F L smoke trie peace pipe, and a current capital rumor that the present monopoly Investigation will be quietly demobilised. The reasons for this aew aad even audden shift ef the administration admin-istration to a pohcy of aiding business are fairly obvious. First of ell, tor the first time. ' ' the administration has become acutely aware of the facts: 1. That recovery is utterly Impossible Im-possible unless private Investment revives and, 1. That private investment hss almost wholly collapsed. The administration, its critics say, hss done some good things. But they declare the good things have not been oa the side of recovery. re-covery. For instance, social security se-curity ia a good thing. But social security laws, while aiding the worker for a while, do not prevent pre-vent herd times. They help a man for a limited time when he loses his job, but they do not create cre-ate a aew job for him. Therefore, while approving what has been done in the way of social justice, the critics say that these measures meas-ures ef social justice have not been supplemented with measures meas-ures of practical economic recovery. re-covery. The facts about private investment invest-ment hare suddenly burst upon the consciousness of the people with a good deal of shock. For instance, money has piled up in the banks during the past six years of depression so rapidly that now there is as much money in the banks aa there was in 12 at the peak of the great boom. But while money has piled up in the banks H has not gone into investment The evidence of this Is found ia the figures about bank loans. While bank deposits new are as great as they were In IMS, bank loans are 120,000.000.000 Was. While bank deposits have increased by I1S.000.000.000 since 133, bank loans have actually decreased de-creased by a button. ' The banks hsve not loaned the money. For a long time the administration ad-ministration blamed the banks. They said it was the bankers trying try-ing to sabotage the administration banks oa a capital strike. But that argument is no longer tenable. ten-able. Because all bankers are not anti new dealers. Mr. Jesse Jones' bank in Houston, for Instance, has not made any more loans than any other bank in fact not as many. This is not the bank's fault The loans are not available. Mr. Hopkins in his speech laid stress upon the fact that three avenues of Investment beckon to us the utilities, the railroads and construction. He admitted that the key to recovery lay in finding out why people would not invest in these things and how they can be induced to do so. Moreover, 1M0 looms ahead. By the time the political conventions meet next year the United Statee will have completely exhausted Its legal debt limit of 45 billions. If private investment does not revive re-vive by then, the president will face the necessity of another tremendous tre-mendous debt deficit But congress is ready to refuse to increase the debt limit The party cannot afford to go before the country next year with another an-other deficit and the promise of still another for the following year. It needs recovery as a political necessity now and needs it desperately. Therefore, the administration ad-ministration has turned te business busi-ness ss its one great hope. - NEXT: PetraUaliOea ef the Right Tern. Copyright IMS, MJA Service. |