Evening Star Newspaper, June 2, 1931, Page 17

CROPS SERUTINZED ASREGOVERY INDEX Good Harvests Could Add Ten Billions in Wealth to Nation. Minute examination by Government authorities of every aspect of the busi- ness depression reveals that the open- ing week of June has a particular sig- nificance. For that reason indexes to present business activity will be watched with extraordinary care during the coming days, Unpublished charts carefully pre- by a survey of all previous Amer- lcan depressions, both major and minor, show that in each case the uoward climb from déepression began bedveen June 1 and July 1. There is, of course, no disposition to regard this fact as having any magical significance. Indeed, there is definite determination not to so regard it. Com- petent authorities, however, are willing to go so far as to admit a substantial and fairly convincing reason for the fact that recoveries from past business depressions, have begun in June. The first week of June is the beginning of the period when farm crops have ad- vanced to a point where it is possible to make reasonably accurate estimates about the final amount of them. In all tl‘? on every development in the pres- 2nt phase of the depression. They are reluctant to say or do anything that might have the nature of a mere ad- ministration of tonic. They have, how- ever, a complete grasp of every element of the situation control. ‘They are aware that some elements are outside their control, such, for ex- ample, as developments in Europe. They are aware, among other things, that much of the recent liquidation \of securities on the New York Stock Ea- change had a European ultimate causd, A banking crisis of immense proportion: in Austria had repercussions which caused financial institutions in other |, countries of Europe to raise cash by means of selling their best American securities. Slump Prolongation Financial As a generalization having to do with the entire depression, it is held that the present prolongation is financial as distinguished from industrial. It is local to the New York financial com- munity as distinguished from the rest of the country. By this is meant that American financial institutions, suffer- ing from a hangover of the shell-shock of a year or more ago, are practicing an extreme conservation which, how- ever laudable in itself, operates as a deterrent to industrial ‘activity. Many banks and_financial institutions have so thoroughly mobilized themselves to meet any conceivable or even incon- ceivable emergency it is frequently said the banks “are lousy with money.” Hesitancy to loan their money for new business expansion goes to ex- tremes which many authorities outside THE EVENING STAR, WASHINGTON, D. C., TUESDAY, JUNE 2, 1931. WoobpwaRrD & LoTHROP ttered tely by one of the y rwo luEt fln{nbcylu 'gl:hmml . was suffe that is wil their | « - eeping an excessive propor tiony of their assets in the form of cash. Some banks have as much as 80 an 90 per cent of their assets in cash its equivalent. M. 8. HERERS INSTANT RELIEF —24 SOUR COMFORT ‘The very minuté you put your feet in a TIZ bath you can feel cool comfort— comfort that lasts\for 24 hours—soaking in as all ache and) pain are drawn out. Acids and poisons—-the cause of il Pad odors, fiching, INIFning and s —are destroyed. Tixad muscles soot! and revived. Tender fvet made hardy— ready to carry you th;:u‘}; on your way. the banks consider unfortunate. A quip | All druggists sell TIZ" tablets. e e 10™ 11" F aNnD G STREETS ew Beach Fumniture—Low Priced " Colorful Beach Chairs Umbrellas jpg—Comfortable beach chairs of natural Bsflch Cha"‘s ‘wood, with wood slat leg rests and seats of colorful awning striped canvas Back Rests Beach Back Rests Green, orange, and red back rests ~ with awning striped canvas back sl previous depressions the date of the and seat .. cenes beginning of business recovery coincided with good prospects for farm crops. ‘This is true despite the gqualification that there is a normal, seasonal Sum- mer let-up in industry in the most pros- perous years. Crop Prospects Good. 8o far as this observation about past recoveries from depressions has bearing on the present, the analogy is now borne out by the fact that prospects for this Ppresent Summer’s crops are good. It cannot be too much emphasized that this coincidence of the beginning of business recovery with good farm rospects in June is not relied upon as g more than it is, namely, a uni- form coincidence. It can only be said that competent authorities are strongly interested by it. For the remainder of June there will be intent observation of two lines of indexes, those of crop | prospects and of business activity, to see it the past parallels are fulfilled. | There is one important condition | which raises the coincidence to some- thing more than a mere accident. A season of good farm crops in the United States means an aggregate of from 8 to 10 billion dollars added to the actual, | tangible wealth of the country. This| is an enormous amount of real wealth, considering that the total annual in- come of the country from all sources is only about $75,000,000,000 in a particu- larly good year, such as 1928, and in a poor year, such as last, probably not over 50 billion. ‘Wealth Is Tangible. ‘This $10,000,000,000 in farm crops, assuming the outcome of them to be fair, is actual, tangible wealth. It is not mere figures on a ledger. It is| wealth that can be eaten and worn and will be used in every sort of in- dustry. Such a crop means $10,000,- | 000,000 of new purchasing power for the third of the country’s population that lives on farms. From that first and| direct object of its beneficence it spreads into every business channel and prac- tically every pecket, New crops seep into every cranny of the country’s in- dustrial structure &s surely and as bene- | ficently as water into sofl | It is not surprising that the most cautious authorities consider that a fair or good aggregate of crops this year should be the force turning prosperity from a condition of scraping the bot- tom to one of climbing upward. While the actual addition of $10,000,000,000 to | the wealth of the country must await the harvesting of the crops, the psycho- logical effect wculd begin with the earliest cigns of the stats of the crops and would keep step with those signs. Avoid Optimism. ‘The present attitude of all depart- ments of the administration is one of more than extreme caution against be- ing optimistic. It is almost one of dis- couraging any calling of attention to good signs. 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