Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-04-25
CEMENT INDUSTRY
IN PRICE CUT WAR
0verproduction and Depres-
sion Held Cause of
Present Troubles.
BY JOHN F. SINCLAIR.


NEW YORK, April Is (N.A.N.A).-
The announcement from the rostrum OF
the stock exchange yesterday that the
old firm of Pynchon g. Co. had been
suspended for insolvency was received
with sigh of relief in Wall Street.
This stock exchange house is the first
really large house to crash since Prince
q Whitley toppled last year. 1t had
numerous branches both here and
abroad, and all were connected by pri-
vate wires.
For years the street has regarded
Pynchon g. Co. as Landmark, and its
failure therefore becomes important,
even though of late rlmors Of internal
dissensions and its connections with
the motion picture industry were
thought to have impaired its strength.
Besides George M. Pynchon himself,
who has always been popular figure in
the financial district, there are 81 other
partners. All trading facilities of the
firm Have been cut of, as the Curb
Exchange, Stock Clearing Corporation
and exchanges in other cities imme-
diately followed the action Of the New
York Stock Exchange with suspensions.
In spite of this failure, the stock
market gave a good account OF itself
yesterday in a $500 ,000-share turnover.
War has begun in the cement indus
try! Prices are being slashed all over
the country east of the Rockies, and
the question is being asked what's all
the shooting about? Two reasons are
given.
First-overproduction; During the
period of prosperity, when construction
was booming, this industry expanded
by leaps and bounds. There were, and
still are, many small independent pro-
ducers competing with the larger or
carnations. This condition alone
brought about a mild amount OF price
cutting.
Second-Depression. The building
trades were among those hardest hit
during the decline In business, and the
demand for cement rapidly fell. Soon,
plants were operating at about so per
cent or less capacity. The smaller
mills. vainly struggling to keep down
production costs by keeping up opera
lions, began drastic price reductions to
get business.
ket out of proportion to their size. The
larger companies retaliated with heavier
cuts. The small mills have tried to
meet these new price levels, and now
the war is in the open and in full
blast. A barrel of cement, which
brought $1.65 a year ago, brings
dollar today Sometimes less. That the
strife is confined east Of the Rockies is
explained by the fact that 70 per cent
Of cement consumption lies in that
area.
Samuel A. McKelvie, wheat member
of the Federal Farm Board, asserts
that the American wheat surplus is not
going to be dumped. He points out that
the 1000 900 bushels already sold
abroad has brought a price above the
world market. This was because OF It's
superior quality and could not be char
actsrized as dumping.
: The previous announcement OF the
Farm Board that it would feed Its
holdings into the outside market, al
though discounted as a dumping policy
by the board, has had repercussions
abroad.
France will have to import consid-
cradle wheat this year as its own crop
never meets home consumption. In
spite of the fact that unloading Amer
lean grain may depress world prices
and give them q better bargain, France
fears the effect on the general Eu-
ropean agricultural situation.
In Germany, on the other hand, the
prevalent view is happy. Any reduc-
ton in world wheat prices will bring
relief to the Germans, who are paying
a high price for bread. Berlin brokers,
however, are uneasy over the dumping
principle, If the United States really
means business.
Russia, whose own huge crop will be
q powerful factor in this years grain
markets, Is sarcastic about the Ameri-
will not hinder its own export pro-
gram. And Canada, too, is praying
that the United States will keep out Of
the world market until the Dominion
sells its 250,000,000 surplus bushels.
George E. Roberts, veteran economist
of the National City Bank in New York,
denounces wage cuts in no uncertain
terms.
Our leading industrialists have gen.
orally taken a position against wage
reductions and / think their attitude
does credit to their sentiment and in
clinations," says he. 1T certainly would
be reprehensible for an employer to
take advantage of conditions to enforce
wage reduction for his own gain"
That about hits the nail on the head.
II any wage cutting is to be done, 1t
should be done not for gain, but for
salvation. Tinkering with the wage
scale will not do much to solve the
present mess.
The causes of the depression lie
much deeper than that--in faulty dis
tribution What the country needs now
Is leaders who are willing to dive deep
and come up with the announcement
that they at least have located the
break in the cable. In the meantime,
there Is a pile of cleaning up to be done
right on the surface. Ofhcial incom-
potency waste. faulty financing and
other leeches en- the national economic
body remain largely as they were be-
fore the depression began.
Are fixed investment trusts guilty Of
racketeering? Some of them are, says
Richard Whitney, president of the New
York Stock Exchange. He says the
exchange is considering a plan for edu-
eating the general public on the nature
and operation Of these investment
trusts.
The public should invest only in such
trusts with their eyes open. knowing
all about the management and policy
of such organizations. The majority
of such investors have small holdings
made ON a longtime basis. They are
entitled to every protection that can be
given TO them. All trusts should be
under State supervision.
The word "racketeering" is not used
careleSsly. Instead of the temperate
and conservative financial statements
formerly issued many of these docu-
mentS have taken on new dress
While they preserve the outward APP
pearance OF the old bulletins, Their
material Is dashy, high pressure and
untrustworthy. Fraud is rife and ii
legal action could be brought to bear
many members of these bogus invest
ment trusts would be clapped into Jail
The action Of the Exchange is TO bC