The Washington times., 1934-12-18

Lewis HRney LOWS n"eS
the war in gasoline prices.
This mixed and hesitant &C
ton of wholesale prices, at
time when enormous credit in
flation pOtentialities are pillng
mn. is interesting. The fact tnat
nrices have not risen nearly as
much as the gold dollar was DE.
valued, makes the situation all
the more striking.
In the case of some common
ties. it is due to large surpluSes'
In other cases, domestic prices
have been run up so lar ABOVE
world markets that imports cut
them down. But underlying ALL
is the fact that monetary uncer.
taintv hampers exchange ana
keeps people from buying Wnlle
heavy taxes and costs OF produc'
ton reduce the profit motlVe'
The government has tried 10
get prices up by creating pur'
chasing power" But it takes so
much away from some to give
to others, that the total purchas-
ing power is not much increased.
It reduces the quantity OF golo
in the gold dollar, hoping mus
to reduce the purchasing power
of the dollar and to raise prices.
But the gold dollar is no longer
the standard for our currency SO
this purpose is defeated, ana
prices do not rise. =,
In view of these conditions 1t
seems unlikely that there will be
any large inflationary rise IN
prices until something happens
to cause greater fear of currency
depreciation, and some sort OF
flight from the dollar.
Last week, steel production con-
tinued its gradual upward climb.
This time it was aided by rise
in automobile production, as work
on new models started more ac'
lively.
Electrical power production re-
ceded, but that means little as an
index of business. More important
was the fact that carloadings
changed little, aside from purely
seasonal variations.
Money in circulation declined,
contrary to the usual tendency at
this season. Perhaps this is why
o considerable increase was shown
in the Governments spending and
distribution of funds.
If you wish to know the correct
time of day or night telephone
THE WASHINGTON TIMES,
District 1000.
On the whole, the latest statis-
tical week suggests no more than
q minor halt in an expansion OF in
dustrial activity that is chiefly de-
pendent upon Government spend
ing, and which is generally ex'
.pected to carry further by next
spring.
To me, the chief news items
appear to be the following:
/. Federal authorities have
taken further steps to reduce
interest rates, by cutting the
maximum rate on time deposits.
The idea seems to be to force
deposits into use by making 1t
unattractive to keep them in
: the bank. The spirit of the time
Is to penaliZe individual saving.
The question arises, Why do the
banks themselves not use the de-
posts? If there were any safe
way to make money earn enough
to pay the low interest rates they
get, would they not do so?
2. A recommendation has been
made by a high Federal council
concerning Government planning,
which increases the probability
that the Federal Government will
go ahead with such schemes as
building power plants and re-
claiming "submarginal" lands on
O large scale.
In other words, lest their ef-
forts to force deposit money into
circulation fail, the New Dealers
are laying plans for spending our
money for us.
3. Despite the low profit mar"
gins of domestic cotton manu-.
facturers, and the serious de-
cline in cotton exports, the
Southern cotton farmers have
. voted to retain the Bankhead
bill and restrictions on cotton
production.
This drives another nail in
the coffin of individual initia-
tive in farming. 1t insures con-
tinued Federal planning" Of
agricultural programs, price
pegging, etc. And it greatly in
creases the probability that be-
fore we get through, we will
have lost a large part of our
world cotton market.
Let us not forget that in this
case, the Southern vote was di.
rectly influenced by the Presi.
dent, who virtually promised that
the numerous small two bale
farmers would be made exempt.
Clearly business is rapidly be.
L..