Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-01-01
LINK BETWEEN BUSINESS
AND GOVERNMENT SHOWN
Warming of Federal Reserve Board i'm
Realm of Credit Chief Cleav-
age During 1929.

/ ASICOs W lIle OI IIle
! economists. 1t was explained on the
| ground that business and industry of
| the United States has been in a con-
! slant state of readjustment, and that
mergers and the labor-saving devices, as
we'll as the transfer of plants from one
section OF the country to the other. have
been largely responsible for the idlencss
IN some parts of the country.
AutOmotive and Radio Changes.
There were two major industries in
| which an economic change was coming.
anyway, and which suffered in the
last few months of 1929. These were
the automotive and radio industries, re-
Spectively, for as early as last Spring
there were readjustmentS in the motor
industry following the success of the
Ford sales campaign and some keen
competition among the higher priced
motor industry to look to foreign
markets.
Foreign trade is not ACCOMPLISHED
overnight, annd while substantial prog
reSs is being made. it is a fact that the
best years of the motor industry in the
foreign field are yet to come The diff
Guilty with the radio industry has been
overproduction of radio sets.
Such slack in labor and purchases
OF raw material peculiar to the radio
and automobile industry may be taken
up by the stimulus to be given in con-
struct1on in other fields. During the
last 10 years there has always been an
industry or two in difficulty every year
General business has weathered these
Individual storms, although here and
there particular section would be af-
tected. Construction was suffering
through the tight money, which de-
prlved real estate of one of its princi-
pal pillars of support. With the return
Of cheap money, first mortgage notes
ere again expected to be en- attractive
investment, as they were in the past.
Stimulating ShipbuiIding.
Some of the loss of business which
the iron and steel industry is suffering
from the temporary decline in the au7
tomobile industry will be made up by
the needs of construction as we'll as by
Shlpbuildlng. The new shipping policy
OF the Government is stimulating the
construction of merchant ships. and
1880 is expected to be particularly ac-
tive in the shipyards.
When once the railroad consolidation
.7iSn OF the Interstate Commerce Com
MISSION is thoroughly digested. as it
WlH be in the early part of 1880, it NAV
De expected that the railroads will 90
anead more definitely with their own
plans Tor expansion. Electrification is
coming. and the consolidation program
Is expected to result in various econ
omles to the roads, enabling them to
take care OF the increased freight of
the next decade. The Government
program for the development of inland
waterways IS also proceeding SO that
the transportation needs of the Nation
may De said to be well cared for In the
planning that is being done.
Government aid to the aviation in
oustry which is in its pioneer stages, is |
having a marked effect not necessarily |
on the development Of quick communi- !
cation by mail but in the opening up |
OF hitherto inaccessible towns, villages !
ana regions. The sirnail has already /
accounted for much saving of interest |
IN the transfer of checks by the banks. |
government regulation of buses is |
forecast for 1880 as a means of stab |
LIKING that business. There are other |
problems such as the creation of a |
communications division to supervise |
telephone, radio and telegraph compa-
MES ana suggestions looking toward |
cooperation between State and Federal |
Governments in the handling of inter- |
state power transmission While all of |
these may not be enacted in 1880, they |
reveal the increased part the Govern |
ment IS playing in modern business.
AAAAbAASAy lIOIIl lie IbRuldCOTV !
slde are the important researches being |
carried on here and some intensive sur
VeyS which are designed to increase the
momentum of American industry and
business. The Department of Commerce
has become the most important single
agency in the Government itself gather
ing facts, making special studies and
acting as a clearing house of facts for
industry, to say nothing of its efforts to
hiring ah0i1f foy 10
elimination of waste.
This was the original Hoover influence
IN Government and it derives much of
Its prestige now from the fact that
the man in the White House believes
thoroughly in the work the Depart
ment OF Commerce is doing for business.
President HOover's Position.
1t is too early to say how much Mr..
Hoover'S position as business man has
lnfluenced policies CT the Government,
but he has been in Office long enough
for his recommendations to carry con-
siderable weight when they touch bust
ness matters. His request that Congress
approve at once the tax cut amounting
to approximately $3.50, 100000 was APP
proved by an overwhelming vote of both
houses. His insistence that the Federal
Farm Board be given broad powers and
not be hampered by any particular
formula won out in Congress. He has
met opposition on his plan to have a
feXibility clause of the tariff law re-
tanned, but this is a political battle
which has been raging long before Mr..
Hoover entered public life.
Nearly every President since the adj
mnlstration of Mr.. Taft has had diff
ficulties with the tariff board idea. Both
the President and Congress are agreed
on the principle of flexibility. Con-
gresS wants to retain control of the
tafln making power through a board
that will be responsible to the legis-
lative branch. Mr.. Hoover wants it to
be left to the discretion of the Execu-
tive to proclaim tariff increases or de-
creases.
Mr.. Hoover's Inauguration during the
year 1929 signified a continuation of
Coolidge policies and to date there has
peen no important deviation therefrom,
although 1t is obvious that the Hoover
and Coolidge methods are different. Mr..
Hoover has hardly gotten started, so it
Is too early TO judge what his power is
with public opinion and he has not vet
appropriated the hold which Mr.. Cool
idge had on business itself.
The important thing is that the stock
market did not wreck the confidence OF
the American people in their business
structure, but on the contrary it NAV
De remarked that 1t is an i'll wind which
blows no good. 1t was this crisis which
gave the Government an opportunity to
develop its plans for the coordination
OF business and Government, and to
Synchronize industrial operations so that
the Nation might move forward with less
dips in the business curve, fewer shocks
| and with an equilibrium and balance.
1t Is beginning to be clearly understood
in Government circles and by the lead
ing economists of the country that
many an industry needs reorganization
from within; that mergers and con-
solicitations are not always efficient and