Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-01-04
PENNEY CHECKS Up
ON EXTENT OF DROP
. IN STORE BUSINESS
Company Official Does NOi
Believe Figure viii Greatly
Exceed 10 Per Cent.
DECLARES QUOTED VALUE
OF STOCKS DECEPTIVE
Says Many Issues on Board Do
Not Reflect Worth of Cor
porations.
By JOHN F. SINCLAIR.

By JOHN F. SINCLAIR.
Special Dispatch to The Star.
NEW YORK, January al. G. Pen
ney, SIS, chairman of the board of the
j. G. Penney Co.. which. operates more
than 1900 department and dry goods
stores throughout the United States,
having gross sales of about $500 900 900,
is checking up figures to learn just how
good or bad business was in 1880.
II am of the opinion that a 10 per
cent decline IN the business of chain
department stores viii not be greatly
exceeded, If it is reached, in the gross
sales figures for 1880, as compared with
those of 1929" Mr.. Penney said. Gross
sales of our company in 1880 may ex-
coed those of any previous year, with
the exception of 1929: computed on the
ures may be smaller than in either
'27 or 90. This showing, however, Is
natural reflection Of the fact that DUR
ing the last two years we have added
500 new stores, located in small COM
mupities."
Wage Scales.
I'm your opinion, can wages be held
indefinitely at their present levels, while
prices continue to decline?" asked.
80 far as I can see, every effort is
being made to maintain the same rela-
tive ratio In buying power Of the wage
dollar that was maintained during the
period Immediately preceding the pres
ent economic situation" said Mr.. PEN
ney THAT, after all, is the important
thing-the maintaining of the relative
reserve in buying power of the wage
dollar" -.
do you believe that short selling
should be curtailed or prohibited on the
New York Stock Exchange during de-
pressions in business, as many are adj
vocating?" was my next question.
Il see no reason why governmental
action should be asked TO curtail short
selling any more than I do why the
same Government should not be asked
to curtail bull movements. To fix such
transactions by Government control
would merely result In building up an
economic situation in which the abuses
potentially would be worse than they
are now.
"As a matter Of fact, stock market
quotations are not true indication of
the worth of the stocks being quoted.
In today's market there are many Sc
curities the earning power of which
justify far higher prices than are being
quoted. There Is too great value at
tached to stock market quotations and
not sufficient to the basic merit of the
great companies themselves"
Price Imitation.
Here IS q statement worthy of
thought But it has not been expressed
often. When Mr.. Penney says that the
earning power and the essential sound
ness Of a company Is Of far. more i'm
portance than the stock market price
of its stock, he is on sound ground. But
this point of view during the boom
days was forgotten entirely.
1.-THE price level continues to drop,
not only in the United States, but
throughout the world Do you see any
permanent recovery until this situation
is corrected" was my next question.
ut is undeniable that the last few
years have witnessed one of the great
est orgies of price initiation the world
has ever known. A reaction to such q
condition is a natural economic occur
renee. Producers, manufacturers ana
distributing agencies must adjust them
selves to the basic conditions upon
which sound prosperity Is dependent.
One factor in this adjustment viii be
the scientific control of productions
Mass production, as such, Is not justi~
fable unless it is based upon sound
knowledge of the powers Of the market
to absorb output"
Here's another revolutionary idea,
embraced IN the innocent phrase sci
entif1c control of production"
The matter of unemployment has al
ways been subject of great interest to
Mr.. Penney, for it deals with the hui
name. the personal side of commercial
life. He is known to have made more
Of his partners wealthy than any other
business man in the history of America,
with the exception Of John D. Rookie
Teller, ST. The J. G. Penney Foundation
has spent millions of dollars in giving
hundreds of old ministers CHS father
was a minister) a home in Florida.
do you favor an unemployment in
surance plan. supported by industry
and supervised by the State, to alleviate
further unemployment disasterP"
asked would a five-day week, or
shorter one, help?"
Unemployment distress, as we see 1t
today, is something which could not
be alleviated by unemployment iYlSur-
ance," was the quick response. Such
insurance is a consideration for the flu
ture protecting recurrence OF the
present situation. In certain industries,
the short week seems to offer the
possibility of increasing the unit pay
roll by 16 per cent. In other industries,
it would mean a similar curtailment of
productive working time"
Would q modification of antitrust
laws be of especial value now?" was my
next question.
Antitrust legislation represents
political attempt to curb the natural
development of business. This does not
seem to work in the long run. In gem
sral, the public has benefited through
the activities of large organizations, the
most conspicuous results Of whose ef-
forts have been to simplify manufac-
turing, distribution costs and afford q
greater spread for commodities. SmSAl
unable through the ahili-
ties of their arrangements, to meet the
conditions of business success, are M-
clined to pass the blame for their own
on to the larger busi-
ness organizations"
Busiuess Recovery.
"Mr. Penney, most observers believe
hat the United States must lead IN the
worlds business recovery. If that Ia
20, what industries, In your opinion,
are likely to take the lead?" was the
1nal question.
with it generally accepted that the
United States will take the lead in the
of world prosperity, there are
several industries that should give q
rood account of themselves when busi-
less activity begins. The textile IN
lustry, in which there is marked room
or improvement based upon what cer-
ain foreign markets have done; the
Gather business; milling and food
,roductS-aH these 1t seems to me, offer
Unusual opportunities
conyTights 1881, by North Americaz Ness