Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-07-06
STOCK SALES PLAN
CAUSES CRITICISM
Corporations Are Embar-
raSSed as Result of Selling
Securities to Employees.
epecial DISPATCH to The Star.

NEW YUM, July O.--DICGVOlo Va
many large American corporations are
worried over the losses employees have
taken on stock sold to them on the in
Stallment plan, with the best inten-
tons, during the boom. While the
market was shooting Skyward it was
thought to be a splendid idea for cor
porations to make their employees part
ners in the business by making them
stockholders.
This was fine while the employees saw
their stocks mounting day by day, and
undoubtedly helped the morale OF the
firm. Profits of employees of the largest
corporations in 1929 ran into hundreds
of millions. These profits were never
taken, of course. because the employe
could not get his stock until he had
paid for it outright.
The installment plans under which
the stock was sold called for weekly
levy on the pay envelope until the
shares were paid for and large numbers
of employees are still being taxed Tor
stock bought several years ago at much
higher market prices.
This condition has produced great
deal of grumbling among the WORKERS
who now feel that they were stuck py
their employers with STOCK they never
should have been encouraged to buy.
The morale has been as much damaged
nv the decline in the stock market as
II was helped by the rise. Directors OF
corporations now see that the system
of making workers partners was
rather dangerous experiment, ana !ney
do not know just what 10 do ABOUT II.
Some corporations have been serl-
ously considering making the losses up
to their employees, but they also 1eeI
that the employe should take part Oh
the loss anyway.
New Refinery.
Construction of large refinery at
PORT Jerome. 100 miles from Paris on
the River Seine, has been started LOT
the Societe anco-Americane de Raj,
image an affiliation of the Stanoaro
Oil Co. of New Jersey. The plant VIII
be in operation early In 1888.
Recent changes in the lmpoIta' lo l
laws and increases in duties levied on
petroleum products have mace IL oe-
sirable to refine such products IN
France. Several large foreign oil COM
nanies already operate refinerles In that
country and with the adoption OF tne
new policy others either have alreaoy
begun construction or contemplate
building operations in the immediate
future.
Eventually it is expected that French
markets for petroleum products Will be
supplied entirely from the output OF
French refineries. The crude Tor these
plants for the present Will continue 10
be supplied from nited States Gull and
South American export points. Later,
with the opening of the rich reserves
in Mesopotamia, a good part OF the
crude supply of French rehnerles VIII
come from the Iraq fields.
New Level Of Values.
Economic conditions throughout the
world have in the past two years been
characterized by the creation of new
level of values Although the adjust
ment process has been under way a
comparatively long time it is not as
yet completed, and numerous correc-
tions still remain to be made, accord
ing to the Reichs- Kredit- Gesellschatt,
AktengeSellschaft
All the worlds economic forces have
been directed toward attaining new
equilibrium the bank says. Wherever
the adjustment process has encountered
obstacles, the inevitable consequence
has been social and political tension
It is automatic that the existence OF a
fixed burden of Indebtedness will in q
period of falling prices tend to prolong
the crisis. Therefore it has always
been to the interests of the creditors as
well as the debtors to adjust outStand-
ing debts to the change in values.
Under free market conditions a de-
cline in prices will produce lowering
of interest rates and facilitate refund
Ing operations. The adjustment proc
esS must fail If non-economic causes,
principally those of a political nature,
influence the movement of capital.
This maladjuStment must in turn lead
TO serious political complications which,
the longer they last will more and more
seriously jeopardize the very debts
out of which thew originated
The political debts are the key log
which must be removed by timely
initiative on the part of the creditor
nations. This would, in turn, also IA
cilitate the refunding of private loans.
Because of these involved relation
ships, the German bank says. a de-
cision Of this kind may prove the
starting point of a new cyclical upturn
in business conditions.
Therein lies the essence of the
Hoover plan. In the first four months
of this year the business depression has
been losing momentum in a number
of important countries and In some
instances it has come to a standstill.
1t will take time to see just what
the effect of the debt moratorium will
be. While there is plenty of room
for optimism, it would be a mistake
to overemphasize the benefits to be
expected. The public should realize
GlldI Illlo Ii Oklly Tie OcBlIlIllIB Vi n new
attempt to straighten out the crooked
affairs of a much-disj ointed world. 1t
cannot be denied that so far the agree
ment has made a profound impression
on business the world over.
Shoe Business BOOms.
The debt holiday already has caused
something of boom in the shoe bust
ness. A decided pickup had been
noticeable in the business of the In
ternational Shoe Co. before the Presi-
dents proposal and the business has
received added impetus since Com
pany officials say that business is now
better than at any time within the
last year, with all five of their mems
shoe factories running full time. If
the present boom continues all four of
their women's shoe factories will be
running full time shortly.
Copyright, 1881. by the North American
Newspaper Alliance, Incl