Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-04-22
MARKET REFLECTS
WAGE CUT TREND
Reduction in Pay Scales in
Railroad and Steel Seen
Necessary for Recovery.
BY JOHN F. SINCLAIR.

of Commerce, says: Prevailing sentl-
ment is especially pessimistic toward
the railroads. But the time is drawing
nearer when they must have an ad-
vance of rates or be assisted in getting
some reduction in their extravagantly
heavy wage bill"
AS if in response to Mr.~Willis state
ment, New York Central stock dropped
5 points yesterday, closing at l01, while
the losses in other standard railroad
stocks ranged from l to 6 points.
The steady current in wall street,
which continues to carry 'e general
market into more shallow areas, carried
United States Steel down 3 points. rms
desnite the optimistic statements OF
President Farrell regarding the OUTLOOK
what is the trouble with the market,
then? 1t looks as though the bankers
whose viewpoint in this case Mr.. Willis
reflects. believe that wage cuts In the
railroads and the steel industry mus
take place before business can recover
In Wall street yesterday, while the
heavy decline in the STOCK market was
under way, an important conference
dealing with the proposed TOUR system
merger was in session. LABOR ieaoeIs
were present. No doubt the subject OF
wage establishments was STUDIED care
fully. Similar meetings IN the steer IN
dustry are reported to be driving at the
same thing. .,,o,,cr
1oadjng indp,strialists have decided that
the time for wage reductions has come
and are ready to force the issue IN
every direction.
0avid A. Schultz, president OF the
Schultz Retail Stores. has voauntalny
10
~ zerol He did this because he does
not believe the volume of business OF
his organization warranted his recelV-
mo q salary so long as he had other
sources of income. When business
Yoicks I'm again he will resume MS lor-
rner status on the pay roll
Mr.. Schulte's action calls 1or com
mendation. BY reducing the operatlIls
costs of these stores he puts OIL tne
dav when the cutting of the general
nav roll will be necessary. BY the
time that becomes unavoidable, II u
should it is to be hoped that reCall
nrices will have adjusted themselves 10
the wholesale price levels. The wage
Garner. whose income has been shaved
down, will have a fair break ana per
laps be no worse oil than ne was
before. ,. 1or,-
over. retail prices are not likely 10
move down. but up. Since the endlng
of the price war between the Schuite
and the United Cigar stores, clgarette
nrices have moved up. MI ScnuiIe
himself says that "97 per cent OF the
tobacconists in New York nave IN
creased their prices" following the truce
between the two systems. ,s
cigar stores show net profits OF more
than 81 500 900 for 1880. This favora-
bic showing is due principally to selling
their productive interests ana ccnceh-
trating on retailing.
Secretary Of the Interior Wllour mas q,
signed the contract which VIII set III
motion one of the largest public WORKS
projects of the Federal Government
the Hoover Dam. The actual pulldlng OF
the dam alone will cost almost Sow
600 900. :.
When work really gets under way. 1t
will provide employment for tnousands
now jobless. All types OF WORKERS are
included: LaborerS, electricians, drnlers'
carpenters, etc.
The construction camp has been
established and engineers are on loca-
ton ready to go ahead on the siX-and-
a-half-year task. The 230-mile power
line from San Bernardino will be nm
ished about the first Of next month ana
will furnish the power necessary to be-
gin the actual construction OF the dam
Public works of this nature wiz go lar
to reduce the misery of unemployment
in the United States. if organized on
larger and coordinate basis.
Thomas D. Campbell. whose $4,000
acre wheat and fax farm in Montana
is the largest private farm Of its KIND
in the world, is out with a warm de-
tense of the much-abuSed Federal Farm
Board.
Under no circumstances should our
carry-over be less than 150,000,000 BUSH
els-that is, less than three months
supply A sudden drought or hot wind
could easily make a loss equal TO that
amount" says this Montana farmer.
Il firmly believe that had not Mr..
Legge supported the commodity market
last December, there probably would
have been a $4,000 900, 900 crash in
one day in the stock markell"
Mr. Campbell, who is listed in Who's
Who as an agricultural engineer, IS
a graduate of the University Of North
Dakota and Cornsll. His Montana
farm venture was incorporated in 1922
as the Campbell Farming Corporation,
and had the support Of J. P. Morgan &;
Co, but few years ago the Morgan in
terests withdrew, and since then Mr.
Campbell has been going it alone.
The dictators of Soviet Russia en-
gagged him to assist them in their gl-
gantic scheme of cooperative agricul-
ture. In 1929 he was induced by the
Soviet government to go to Russia as
special adviser and consulting engineer
because Of his experience with large in
custriali2ed farming.
1t b reported that in addition to ths
excellent services he rendered the Rus
slams on that occasion. his visit resulted
in the placing Of Sl85, 100000 in orders
for agricultural machinery with Amer
lean firms.
Before leaving on a second trip Il
that country last year. he said to me
Russia is the biggest market in thu
world for American goods, if we'd on!
go after it. And we ought to do 1t now
because there is enough business ther
for American manufacturers to TAX
up all the slack of this bushes
depression"
What causes insolvency? Every in
solvent company answers that question
in different way. But here's re
cent statement giving six sources o
Insolvency which are worth study
!. Contracts for purchases of ray
materials, drawn with friendly broker
at prices 10 to 20 per cent above cur
rent markets.
2 Very fattering salaries TO execu
tives making a great sh5w Of keepin
busy.
3. Construction Of home office build
ing by a group of insiders, who the
lease it to the corporation at an in
ordinate rentaJ--that is, a major por
ton of the building.
a. Abandonment by the corporatio
Of three floors of Office building it ha
previously been using prior to eXpira
ton of lease, with continuance {
rental payments for said empty space
s. Business" trips to Summer re
sorts on foreign soil with running eS
pense accounts.