Politics and Business in 1936

January 4, 1936

Report Outline
Uncertainty in Business Outlook for 1936
Business Conditions in Past Presidential Years
New Deal Policies as Factor Creating Uncertainty
The Attitude of Business and the 1936 Campaign

Uncertainty in Business Outlook for 1936

The Year 1935 marked the first broad and sustained business revival since the beginning of the depression. Recovery was made in all lines. Retail trade improved; industrial output advanced; capital flotations, machine tool production, building construction, and carloadings increased; the number of business failures declined. Alexander Dana Noyes, financial editor of the New York Times, wrote January 2, that “although every responsible business body recognizes genuine industrial recovery, nevertheless there exists reluctance to predict its unbroken continuance.” One of the reasons for the absence of greater optimism is the fact that 1936 is a presidential election year, and according to business tradition, the months leading up to a presidential election are apt to be months of uncertainty. The principal cause of such business uncertainty as is evident in presidential years undoubtedly has been, in recent years, the very tradition itself that business is likely to run below normal. To a certain extent the fear of business reaction seems to bring about its own fulfillment in a business hesitation which would not be warranted by other factors in the economic situation. This hesitation may have the effect of putting a brake upon business expansion, without bringing it entirely to a halt, or of contributing to an actual decline in business operations.

Campaign as a Cause of Business Hesitation

Traditional uncertainty may be greatly aggravated this year by the presence of new political factors. In consequence, business hesitation during 1936 may be much more marked than in any recent presidential election year. The impact of New Deal policies on business has been greater than under any previous peacetime administration, and the resistance of the business community to these policies is likely to reach its high point during the months leading up to the election in November. Not for many years, moreover, has there been so great a likelihood that on such major economic issues as the currency, the public debt, the tariff, and taxation the views of the candidates of the two major parties will be widely divergent.

President Roosevelt, in his annual message to Congress on January 3, condemned “the domination of government by financial and industrial groups …in the 12 years that succeeded the World War” and maintained that his administration had “returned the control of the federal government to the City of Washington.” The forces of “entrenched greed” had abdicated in 1933. “but now with the passing of danger they … withdraw their abdication” and “wrongfully seek to carry the property and the interests entrusted to them into the arena of partisan politics.”

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