Within the last week there have been two ominous indications of a weakening on the part of the Administration in its attitude toward the Securities Act. In a statement to Dow, Jones, and Co. in New York, Secretary-on-leave Woodin assured Wall-Streeters that the government was not aiming at "recovery without profits." Further music to moneyed ears was the proposition advanced in his Boston speech by budget-balancer Douglas that recovery necessitates "a free flow of capital into legitimate business enterprises." Both were generally interpreted as indirect assurances to the recalcitrant banking world that Santa Claus will probably bring Administration support for a change in the Securities Act.

The undying opposition of Wall Street to certain provisions in this bill is well known. Apparently the reason is that shrewd Felix Frankfurter has written a law in which their sharp lawyers could find no loophole. Loudly they proclaimed that with the director's responsibility and full publicity clauses, the act would stop all new investment. Since last June, in fact, there has been only a trickle of investment.

This takes on major significance in view of the fact brought out by a Harvard Business School survey that by far the greater part of Depression's drop in production and employment came from the capital or heavy industries and not from consumption industries. Thus while the N.R.A.'s attempt to raise purchasing power by wages was valuable, perhaps a more fundamental objective should be to induce a resurgence of investing and hence a great rise in purchasing power. It is this fact which has led to an increasing demand, both inside and outside the banking community, for revision of the act, in order to overcome what is now quite probably the main threat to recovery.

All this is exceedingly unfortunate, for the Securities Act was a sound and progressive step in government regulation of finance excesses. It was well designed to prevent a repetition of the large scale gulling of any ignorant public which occurred in the roaring 'twenties. With a reasonably conservative interpretation by the courts, there is absolutely nothing that honest banking houses and directors need fear.

Yet fear there is and once more high finance exhibits its colossal stupidity and ostrich-like behavior when faced with a new situation. Whether the failure of investment to keep pace with the general upswing has been due to calculated sabotage or to sincere, though groundless, fear of consequences, it is impossible to say. If this policy results in the loss of the Securities Act in order to attain recovery, then there will be one more important monument to the blundering incompetence of the bankers, whose vision is as narrow as their power is great.