14 AUGUST 1936, Page 1

Drought and Recovery in the U.S.A.

Press reports from the United States very naturally concentrate -on. the catastrophic effects of the drought, for its devastations are even worse than anticipated. The maize as well as the wheat crop has failed, and agricultural relief must be administered on a " disaster basis." Yet at the same time industrial recovery is such that " prosperity " is no longer round the corner, but has arrived in the United States. Figures of produc- tion foir manufacturing have risen by 25 per cent. since last year, for residential building by 50 per cent., factory employment by 20 -per cent., factory payrolls by 10 per cent. The demand for inotor-cars in May exceeded even the record figures of 1929. The recovery is undoubted. and indeed, in an election year, is not a political issue between the parties. The uncertain factors in the situa- tion are the drought and the soldiers' bonus, of which $1,000,000,000 have already been converted into cash. Indeed, it seems that the main obstacle to still further recovery may be the financial uncertainty produced by the Government's " spending policy," on which the President of - General Motors and the Washington Chamber of Commerce delivered attacks this week. But so long as Mr. Roosevelt, with an election to face, has to combat both the effects of drought and agricultural unemployment, Government expenditure is not likely to be reduced.