Perth Amboy evening news., 1923-07-14

WELLESLEY HILLS, MASS, July
14-"So many people will be bearish
while the second half of the area
of business readjustment is being
completed, that it is well to stop once
In a while and consider some of the
optimistic features of the situation
There is much good news constant
ly, coming out. The great improve
ment in the condition of the rail-
roads; the corrective attitude on the
part of labor; and the late develop
ments in the foreign situation arc
all optimistic factors. One optimis-
tic. feature that we do not heal
much about, however, is the present
attitude of the United States Su-
preme Court. 1t is difficult for the
statistician to measure court de-
risions," says Mr.. Roger w. Babson,
"and If he did it too often, con-
tempt of court proceedings might
follow. Nevertheless, these court
decisions are a great factor in bust
ness. and could probably be reduced
to a statistical analysis. I have
special reference to three recent de-
cisions of the United States Supreme
Court.
1.-THE decision in connection with
the Southwestern Telephone Com
Sny was exceedingly cheering tc
INVESTORS. This decision clearly
ruled that neither legislatures MOI
commissions can make rates thai
are c~onfscatory in any way. The
court indicated that the cost of re-
production must be considered, as
well as original cost, and that in
vestors must be treated fairly so as
to encourage them rather than dis
courage them. This decision hak
been welcomed by all interests, es-
peclally the public utility group.
It should make more safe telephone
securities, electric light and power
securities, and street railway securi-
ties. This does not mean that the
Supreme Court upholds dishonesty
or stock watering, but it does mean
that it will protect capital when
politicians, for selfish motives, at
tempt to ~jeopardize it. Furthermore.
this decision will encourage corpo-
rations to appeal to the courts more
and bother with Congress and legis-
latures less during the next few
years than they have heretofore.
THE second decision which in
terests business men was when the
United States Supreme Court hello
that the Kansas Industrial Court
can fix or regulate wages only in q
great emergency. Briefly. this de-
cision was that in the cas- of q
railroad or coal strike, where the
public is threatened with starvation
Or disaster, an Industrial Court can
come in and fix wages, but only in
such instances. The special case
was one involving the Charles Wolf
Packing Company. The United
States Supreme Court held that II
was not necessary for this packing
oompany to do business. There were
other companies from which goods
could be purchased, and as a last
resort, people could temporarily go
without their products for a while
il necessary. AS most of the states
of the country were eagerly await
ing this decision, the ambitions oil
many political leaders will natural
~ be greatly curbed thereby. There
will be fewer attempts during the
next few years to interfere with
siness by legislation than there
build have been if the United States
preme Court had upheld the. Kan
Is Industrial Court.
s"The third epoch-making decision
the United States Supreme Court
was to the effect that the Federal
Trade Commission cannot interfere
in the rights of private business or
in the matter of fixing prices. For
some time, certain great national
advertisers nave been in conflict
with the Federal Trade Commission
concerning prices on nationally ad.
vertised goods. Some chain store
retailers have been selling certain
nationally advertised goods at or be-
low cost in order to get people into
the store and then sell them some-
thing else. The national advertis-
ers have claimed that this is not
only unfair to the manufacturers
but also to the public, and have in.
sisted that their prices be upheld
by all retailers. The Federal Trade
Commission has taken the part of
the chain stores and those who want
to cut prices. The Supreme Court
1 has upheld the national advertisers
The case in question was brought by
the Mennen Company, large distri-
buffers of toilet articles. Some may
think that this decision is against
public interest, but I seriously doubt
it. Public interest demands good
business which will keep people en-
ployed and goods moving. Prices
never long remain too high because
high prices always either encourage
competition or else check buying
Statistics show that business has
been harmed more by price cutting
than by price fixing. If prices are
too high, they correct themselves.
Price cutting, however, kills the
goose that lays the golden egg.
Business continues fair" con-
GUIDED MI. Babson. 1.-THE Babson
chart stands at l per cent above