WALL STREET SUBDUED

Poverty Bay Herald, Volume LXIV, Issue 19338, 31 May 1937, Page 13

WALL STREET SUBDUED

POLITICAL UNCERTAINTY WATCH ON LONDON PEARS OF DEPRESSION VANCOUVER, May 8. Wall Street and all other North American stock markets are closing this week with the smallest business in two years. Wall Street has been waiting to see what happened in the fortnightly settlement, at the London Slock Exchange, where il was feared that the slump ill gold and other quotations over the last fortnight might result in a failure ol some brokers.

However, there was no trouble, for the London accounts were all met and the whole market situation has cheered considerably.

In American markets business has hecome a mere dribble, and probably no general trend will come until after the Coronation.

Washington and New York business and Governmental leaders have halted for a careful examination of the outlook.

Fresh evidence of a new direction in [Tinted States Government activities, designed to check financial and industrial forces which were set ill too rapid motion under the depression, being a phase of Roosevelt's New .Deal, is being produced almost, daily.

It comes not only from the President himself, bill also from other significant sources, and is now revealed as n general policy governing nearly all administration plans. Strong Hand

Behind it there apparently looms the fear of another national boom and collapse.

The. Administration seems to be putting to the test a theory that the Government can smash the ten-year cycle of over-expansion and depression which has marked business in the last three decades.

The President has announced the diversion of Federal spending. From durable to consumers' goods, in order to slow down heavy industry, and has denounced price increases.

The second budget revision has placed a major emphasis on Federal economy, and hinted at new taxes next winter.

Both in his .Budget message and in oilier advices to Congress, Roosevelt proposed the abandonment of the costly social welfare projects he formerly advocated.

The President has barred stock market speculation by 825,000 Government employees. Lastly, the Secretary for Agriculture, Mr. Wallace, one of Roosevelt's closest advisers, revealed the apprehension hehind all the new programmes when he said cautiously in a public address : "If 1919 produced 1921-. and 1929 produced 1932. we cannot help asking as to the possibility of 1939 producing 1942." General Johnson Although he is no longer officially in the Administration. General Hugh .Johnson, once head of the N.R.A.. speaks with a close knowledge of the situation when he savs :

"What would happen if the Government should now suddenly increase the gold content of the dollar, by, say, 25 per cent? "First, if would lose, between two and three billion dollars just like that, it would increase 25 per cent the burden of debt on all debtors, including, its own. it would shatter the price of export farm products, cut off one-third of our exports, increase by one-fourth our imports, destroy a' favourable balance of trade, give all'other countries an advance in the' world commerce, and probably knock the bottom out of our recovered price, structure, ruin agriculture, and precipitate another crash. "In short, it would cost too much, including the wreck of the New Deal."