Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-02-21
BUSINESS MORALE
STEADILY GAINING
Various Companies Are Now
Going Ahead With Ex-
panSion Programs.
BY ]. c. ROYLE.

The morale of the business and indus
trial world is gradually improving as
the time for congressional adjournment
draws closer. There have been exhibit
lions of financial courage in the last
week which have been sorely needed
Bank debts have been low That means
people have not been spending even
though they had ample funds. Courage
is being exhibited in many quarters,
however and the advance OF the forces
of business has been noticeably i'm
proved thereby.
This has come about through private
initiative rather than from Government
aid, according to bankers in scattered
sections of the country, reporting TO-DAY.
The Improvement is taking place in
other than those lines such as conStruc-
ton, whce the Federal efforts have
been largely concentrated. OF course
Federal funds are aiding construction
and road building, but the main i'm
provementS have come from the conf
dence in the future of individual con-
Germs and industries.
Automobile Industry.
The automobile industry undoubtedly
Is one of the financial heroes. Thou
sands of workers have been added to
the pay rolls. Some plants are again
practically on a normal basis. All OF
them are adding materially to the de-
mand for raw and finished materials
used in motor-car manufacture. This
has spurred the iron and steel industry,
textiles, the non-ferrous metals, rubber,
machine tools, lacquers and a score OF
other lines.
The gain in steel is appreciate but
gradual That is taken to mean that
It is healthy and we'll founded and not
likely to slip backward in the near fu-
ture. The call for pipe and railroad
supplies has helped the situation. The
railroads which came bravely to the
rescue with huge orders for equipment
in 1890, are not likely to buy many new
freight cars and locomotives this year,
since their needs are we'll supplied, but
they can be counted on to buy supplies
which will enable them to take full
advantage of any improvement in freight
or passenger traffic.
The farmer buying power Is as strong
as could be hoped in view OF the de-
velopmentS of the last two years, but
the fact that several members of the
Federal Farm Board are expected to
resign by beginning of Summer must
not be taken as an indication that the
farm situation problems have been
solved. Agricultural authorities say 1t
means simply that the battle against
the old laws of supply and demand has
ben a hard one on both sides compll-
Gated by the transfer of much grain
trading to the Canadian markets.
Textile Situation.
The textile situation has frightened.
This is not unusual at this time OF the
year. with Lent just starting and the
Easter trade in prospect, but the gain
Is above seasonal proportions, and in ad-
dition the industry is so conservatlvely
situated as to stocks of goods on hand
that it is able to take full advantage
of the betterment. There is somewhat
more activity in both the raw and I'm
ished silk markets.
STYLE shows throughout the world
stressing cotton dresses have aided the
cotton manufacturers. The trend for
pajamas for sleeping, lounging and eve
ming dress has opened a market for
many of the new and attractively de-
signed fabrics.
The oil industry is unsettled, and
probably will remain so until Congress
adjourns. since some legislators are ur-
gently pressing for comprehensive in
vestigation of the whole industry. The
oil men, looking back at what happened
to coal, which was deeply investigated,
do not view the prospect with any en-
thusiasm Food markets are following
the usual trend of the Lenten season.
Holding Companies.
A distinct warning has been issued to
the four great Eastern trunk line rail-
roads in the report submitted to the
Commute on Interstate Commerce of
the House and to the House itself on
holding companies. They were told in
the report and by Chairman James S.
Parker of New York in effect that If
there should be undue delay in present.
ing to the Interstate Commerce Com
mission their plans for consultations
in the Eastern trunk line territory or If
there should be continued striving for
selfish advantage through acquisitions
by means of holding companies or hesi-
fancy in submitting the issues to the
commission, the commission might be
clothed with power to compel the roads
to diyest themselves of railroad stock
acquired through holding companies
without the commissions approval and
which was being continued without the
commissions approval and its findings
as 70 what was in the public's interest.
1t has been the contention of some
OF the roads that the acquisitions were
1urthering the behest Of the commits
sion to merge the roads into compre-
hensive systems. This warning is likely
to speed up the consolidation plans, not
only of the four great Eastern trunk
lires. the Baltimore & Ohio, the New
York Central the Pennsylvania and the
Chesapeake 81 Ohio, but those of all
the other railroads in the country.
The report, compiled by Walter NJ.
w. SplaWn, acting as special counsel to
the committee, recommends that the
interstate commerce act be so changed
as TO bring within the jurisdiction of
the Interstate Commerce Commission
any acquisition of the control of a
railroad which would bring that road
into afflliation with or under control of
another railroad, whether that acquisi-
ton was by means OF a holding COM
pany or otherwise. It also is recon-
mended that the next session of Con-
gresS consider whether legislation is
necessary TO deal with any past acquisi-
tons of railroads which have not been
approved by the Interstate Commerce
Commission. This Is the section which
Is specially aimed at the Eastern car
rieIs. No immunity is TO be given for
violation Of existing statutes when thu
acquisition was made. The delay 10
the next Congress is provided for with
the idea that the applications Of the
tour Eastern trunk line roads for con-
solidation Will result in laying bare the
entire holding company situation.
Rail Executives Position.
The third recommendation made by
Mr. SplaWn is that the scope of the
holding company investigation be
broadoned 10 cover all companies en-
gagged IN interstate commerce. This
would take in utility and industrial
companies as well as bus and pipe and
air llres.
Railroad executives here indicated to-
day that they were by no means unal-
terably opposed to regulation of hold.
ing companies, provided such regula.
ton were fair. They declared that il
the proposed consultations which hac
ifSnircd The acquisition Of roads hN