Evening star., 1934-12-02
BY OWEN L. SCOTT.


This is to be the story of small
city business man. He had been
boyhood friend of the writer, who ran
into him accidentally during the past
week while the visitor was in Wash
ington seeking a direct loan from the
Government.
The N. R. A., the A. A. A., the
R.F.C. and the Federal Reserve banks
were all very real to him. They had
come to represent to him something
verging on economic life and death.
His experiences during the past year
and a half show how happenings in
Washington can tie in directly with
the affairs of the man in business,
and deeply influence those affairs.
Government under the New Deal, he
found, is something more than re-
mote and Intangible power, 1eIt only
at income tax paying time.
This man left college to enlist IN
the Marines at the start Of the war.
He went through all of their engage
ments in France and returned 10
enter the department store IN which
his father was partner. The busi-
ness had been very successful for
quarter Of century. Since then his
father has died and he has become
head Of the enterprise.
Located in the heart OF Middle
Western farm territory, the stores
business was largely affected by the
buying power of farmers. Things
didn't boom in that part of the coun-
try even during the 1920s, but the
store, which was one of the largest
in the community, weathered sue
cessfully the years up to 1890 By
drastic economies it kept going on an
even keel until early in 1888, although
inventory losses cut into working
capital.
Then came N. r. A. with its Blue
Eagle, and the start OF real trouble
for this particular business man. His
costs shot up sharply. The number
of employees jumped from 100 to $50,
as hours were cut to comply with the
code Wage increases added further
to expense Thousands OF dollars
were added to the cost of doing busi-
ness. That was all right, however.
The employer was glad to enter the
prosperity procession and throw his
reserves into the pot, on the gamble
of benef1ting in the end.
But events did not work out as
scheduled by Gen. johnson. Prices
of goods at wholesale rose rapidly.
That took more working capital to
keep the shelves stocked. Also, 1t re-
quired that retail prices be advanced,
and there needed to be bit more OF
a margin to take care of the wages of
the new workers. Either that had to
happen or volume Of business had to
increase If loss were to be avoided.
The hub of the story is that volume
didn't go up and buyers resisted price
increases.
Farmers took dislike to the Blue
Eagle, or at least to what they re-
garded as Blue Eagle prices. They
turned to buying more of their goods
from mail-order houses. Also, store
owners in small towns, exempt from
N. r. A. restrictions, began to under
sell the city stores. The result was
that goods had to be sacrificed to
move them. That cut further into
working capital.
y r r i
In good time, when there were siz-
able profits, the excess either was
pIowed back into the business or put
into real estate in the town. Now,
with the pinch being felt, the store
owner tried to borrow on real estate,
but without success. He sought to
borrow from the banks, but they re-
fused anything but 90-day commercial
loans on the ground that national
bank examiners would throw out the
notes otherwise.
So he then sought to induse N. r.
A. to let up somewhat on its restr1c-
tions. A prominent young N. r. A.
official finally went out from WASH
ington. The figures were put before
him, but, according to the business
mans story, the official brushed the
papers of the table with the remark:
81 never was interested in figures" ="
Nothing came Of that. Instead, as
sessments began to come for the sup
port of the code authority. There
were two of 81 for each employe and
last week a third assessment of 621a
cents was levied. The business man Is
regularly paying the assessment.
But, it was suggested, aren't en-
ployers simply ignoring the codes
when they pinch? That's the story
frequently heard in Washington.
Not out in that country, he an
swered. There is State compliance
director in the town drawing $4,000
year and an assistant at $4,000
and they try to earn their salaries.
What about A. A. A. payments to
farmers and Public Works Admins