The Waterbury Democrat. [volume] (Waterbury, Conn.) 1917-1946, 1933-08-12
Beginning Of Buying Movement
At Hand Due To Price Raising
Utter Confidence in Federal Administrators Power
to Lift the Country Out of the Depression Nation
Wide.

New York, Aug. 12-There are
several separate and distinct ways
in which the economic policies of
the Federal Government have
tended to produce higher prices
and more active industrial opera
tons, states the Guaranty Trust
Company in its weekly survey.
First, and probably most impor-
tant, the survey cites that the pow
ers conferred upon the president
to initiate credit and currency and
to reduce the gold content of the
dollar have created a strong pre-
sumption of eventual direct action
along those lines. Second, the Ma
tional Industrial Recovery Act pro-
vides for the establishment of
minimum wages and maximum
hours of labor, both of which inn
ply higher costs and higher prices,
to say nothing of the anti-price-
cutting provisions of codes and the
possibility of production control
and direct price-fixing. Third, the
Farm Act authorizes several lines
of action intended to raise prices
including acreage reductions, pro-
cessing taxes on farm products,
and minimum price agreements,
under the direction of the secre-
tary of agriculture.
Finally, apart from these speci-
fic influences, there exists a vague
but powerful feeling that the Fed
eral Administration somehow pos
sesses the will and the power to
lift the country out of the depres-
sion and that long deferred COM
mitments can now be made with
confidence that was impossible
prior to the Inauguration of the
new deal"
These different factors have been
deliberately strengthened by the
words and actions of tn admins
tration. Except for the purchase of
a comparatively unimportant
ment securities by the Federal Re-
serve banks, there has been no di-
rect imitation of credit or currency.
But the president has specifically
stated that the provisions of the
imitation act will be used when, as,
and If they may become necessary,
has repeatedly refused to enter in
| to any sterilization agreement with
foreign governments, and has al
lowed reference to be made to the
1924-25 price levels as an indica-
ton of the price-raising aims of
the administration. In the execu-
ton of the recovery act, primary
emphasis has been placed on min
imum wages and maximum hours
of labor, with only secondary at
tention given to production quo
tas and direct price maintenance
1t Is in the administration of the
farm law that the most direct ac-
ton has been taken. The secretary
of agriculture has not only decreed
processing taxes and acreage re-
striction 70 cotton. wheat and to-
bacco, but has resorted to direct
price-fiXing methods by approving
ruling by the principal grain ex-
changes setting closing prices of
July 20 as minimum prices below
which no trading will be allowed
until further notice. Maximum
fluctuations for trading day have
also been set.
These various influences, accord.
ing to the generally accepted view,
have combined to produce the adj
vance in prices. or at least to make
the advance much more rapid than
it would have been under normal
conditions. To what extent the in
crease in business activity is re-
suit of the higher prices Is less
clear. In the opinion of many OBJ