Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-03-03
TREASURY TO GET
LOAN At Low RATE
Prediction Made That New
Issues Will Be Quickly
Sold.
BY JOHN F. SINCLAIR.

BY JOHN r. SINCLAIR.
It is apparent Secretary Mellon Is
not worried over the task of raising
ST 400 ,000, 900 on March Is. If he were
he would show it by having the new
bonds and certificates pay higher
interest rate.
This Spring financing, retiring ST.
100,000000 in notes and providing
$500 900 900 Immediately for loans on
war veterans certificates, represents
the lowest rates ever paid on ma ior
Government plan. Incidentally, the
Government is borrowing money at
112 per cent to loan to the veterans
at Az per cent.
Will the issues be sold at such rates
of interest? That's an easy one to
answer. They will all be snapped up
and oversubscribed.
Farmers Buying Power.
AS comprehensive statement as any
made by the 1904 business leaders to
the QUESTIONABLE covering the present
business situation sent out by the Sher-
man Corporation, is that given by for
mer Gov. Theodore Christianson OF
Minnesota He says that lack OF pur-
chasing power on the part OF the
farming class is largely responsible for
the slow business recovery and the
large unemployment.
''There are two fundamental reasons
for the present condition of unemploy-
meIlt," this former Governor goes on
to say.
81. An unprecedented population
movement from rural areas to the in
dustrial centers, which can be checked
only by making farming economically
attractive.
%. Increased mechanization of in
dustry, the effects of which can be
overcome only by reducing the number
of work hours per week in the same
proportion as new machinery displaces
men.
Unemployment is the principal cause
for our Industrial stagnation, because:
the buying power of 100000 is sus-
pended as they have no income, and
the consumptive demand of those who
are employed is sharply curtailed, be-
cause they are boarding in anticipation
of the possible loss of their jobs"
Cost of Distribution.
B. L. Drum, vice-president of the
National Food Stores Co. of Dodge
City, Kan, in his reply to the same
QUESTIONABLE emphasizes still another
point of view. He wants waste, incident
to the duplication of efforts in all fields
of action, eliminated. Waste, he says,
is a social, as well as an individual,
crime.
There are too many manufacturers,
too many jobbers, and even too many
retailers in all lines of food commodities.
If 5000 jobbing houses are giving only
the service $500 could easily give
(Which is fact) then the consumer is
paying the unnecessary cost OF distriDu-
ton"
While Mr.. Drum refers only to the
condition of his own particular field of
merchandising, he feels that a study
of other industries would reveal much
the same condition.
George w. Gair, president of Robert
Gair Co. of New York, agrees with Mr..
Eruii and says similar condition
prevails in the boxboard, folding car
tons and shipping cases industry-far
too much productive capacity.
Uncontrolled, this excess capacity
can only result in demoralized sales
prices" says Mr.. Gair. I'm the paper
industry, this condition has resulted in
sales below cost, solely to keep plants
operating, This situation cannot be cor
Iected by any one or few companies.
THE antitrust laws prevent con-
certed action amcng the manufacturers,
which is necessary to correct the situa-
ton. Even with dependable statistics
gathered by an association, it Is difncult
to get the cooperation OF a sutncient
number TO secure the result"
The Sherman law, as interpreted to-
day is "a relic of barbarism in the light
of present-day business needs accord
ing to Mr.. Gair.
When asked for a solution to over
production in his industry he replied:
The flve-day week universally recog-
nized in this industry, would solve the
problem without disturbing the hourly
or daily. rate of wages paid to labor, but
until production can be regulated and
keTt in bounds with demand, there Is
no hope for improvement or profit, for
while waiting for demand to catch up,
new plants are built and old ones greatly
improved, so that the increased produc-
ton more than keeps pace with in
creasing demand"
Gives Business Needs.
C. M. Reyes, president Curtis Wright
Corporation of New York, gave his sum-
mary of the business situation to date
as follows:
First step in the American situation
Is to maintain in the banking world a
sound liquid position. Second step, to
put the business house in order by the
elimination of unnecessary overhead,
extravaganza of administration and
maintenance OF organizations far too
big for any business in sight during the
next year or more. Those two steps
have been taken to large extent. These
measures are measures Of protection
rather than efforts TO make business
revive
Business cannot. revive on a wide
scale until economic readiustments at
home and abroad have progressed be-
yond the present point, cannot
get far without international co-opera-
ton on a bigger scale than anything
we have seen since the war"
More Leisure Time Urged.
Lew Hahn, president of the Hahn
Department Stores, agrees with MFR.
Gair in suggesting that more leisure
time be made available to workers.
The more we can increase the time
for leisure among those in the field OF
productive industry, the more time they
will have to consume commodities Of
every sort.
"Wage rates should not be cut be-
cause tbs can mean only decreased
consumptae ability"
(Copyright, 1881. by North American News
paper AIhanceJ
BETTER BUSINESS