WALL STREET ECONOMICS

After the weak platitudes of the politicians and the shallow optimism of the Press it is refreshing to read a realistic analysis of the present economic situation. The February News Letter of the National City Bank presents just such an analysis. The pamphlet finds no change in the general situation. Shortsighted and ignorant of its own best interests, public opinion has forced the government to maintain an uncompromising stand on questions of international economic relations such as the gold standard, war debts tariffs Uncertain as to the action or inaction of the government in the future, business men have no will to spend, and funds continue to pile up in the money markets of the country. Enterprise is paralyzed; recovery is still far distant.

The letter outlines three policies by which the Government may cope with the situation. It may cut itself off by a tariff wall from the rest of the world and attempt to work out its salvation as an economic unit; it may inflate its currency to compete with other countries not on the gold standard, a policy that can end only in the worthlessness of all currency; or it may cooperate with other nations to foster international trade. Advocating this last alternative the National City Bank advances a program of reduction in tariffs, cancellation of war debts, and ultimately a universal return to the gold standard. At home it demands a balancing of the federal and local budgets, reduction in government expenditure and taxes, and the adjustment of wages and prices where it has heretofore been blocked. In conclusion it states hopefully: "Contrary to a common belief, such a road out of the depression need not be a long one."

Against the general tendency to blame the economic system for the depression, this pamphlet blames rather the inertia and obstructionism of a Senate giving way to childish outbursts of petulance, and a House of Representatives frittering away its time on picayune economies. One may find this analysis of the situation too narrow, too concentrated on the international and monetary aspects of the depression; one may disagree with the conservative capitalistic solution offered, but at least the analysis is supported by a multitude of statistics, and the solution gives the sanction of banking circles to practical measures long advocated by economists.