The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1936-01-16
PRICE STABILITY
VIEWED RESULT
OF AAA RULING
Farm Income Seen Expand
ing as Better Demand
Develops.
BY A. L. JACKSON
Economics Statistics, Inc.)

NEW YORK, Jan. 16.-Whenever
an artificial factor is set up to regu-
late, restrict or aid business or
particular industry, many read
justments are necessary. Readjust-
ments must also be made in our
economic system when the artificial
factor is removed.
The AAA was an act of vital i'm
portance to both agriculture and
industry. 1t is only natural that it's
removal would result in wide fluc-
tuations of commodity and security
prices because of the indecision, I'M
certainty and misunderstanding AS
to the probable effects that the
change might have. 1t is largely
due to the uncertainty as to whether
or not some new or counteracting
measure will be adopted.
AS I have previously stated here,
business as whole and practically
every commodity influenced by the
AAA are at present sound statisti-
cally, sufficiently SO to warrant in
creases in prices. Ultimately this
will be the result. The reason for
the declines during the past week
is the uncertainty as to what new
political measures will be ushered in.
Buying Power Aided
How will the decision affect pur-
chasing power? over the next six
months or the remainder of the cur
rent crop year, farm income will be
higher than it would have been had
the AAA remained in effect. THIS
assumption seems to be the correct
and logical one because of the fol-
lowing conditions:
Already as result of the decision
prices of finished products have
been reduced. Within a week or two
stability will be restored in finished
goods and the demand will be in
creased. This will in turn increase
the demand for farm products. Thus
it is logical to expect farm supplies
to be reduced faster than had the
AAA remained in effect. AS already
indicated the prices for farm COM
modities will also be increased. Con-
sequently cash farm income, eXclud-
ing benefit payments, will be higher.
Since it is expected that payments
already contracted on 1885 crops
will be made to the farmers, farm
erS' income from this source will be
the same as if the AAA had been
upheld. Only one contract has been
made with farmers for the 1936-1937
crops, namely, the winter wheat
crop This may or may not be full
filled, but will make practically no
difference in the amount of farm
income.
Sees Retail Sales Rise
Purchasing power will also receive
the additional stimulus of higher
operating rates in the msnufactur-
ing industries. Profit margins have
already been aided as a result of the
decision. With larger unit profits
possible, manufacturing activity will
be increased, employment and pay
rolls will be higher
With purchasing power being in
creased, provided no new artificial
measure is brought into play and
the cost of living reduced, it is log
ical to expect retail sales to expand
considerably as the retail price
structure is readjusted and stabil-
ized This should only require
few weeks.
Since the decision indicates that
other restrictive measures will also
be removed, it is logical to expect
the heavy goods industries to
quicken. The restriction of profits
and uncertainty as to new restric-
tons have been the principal fac
tors retarding those lines for the
past two years. Just as the heavy
goods industries will be stimulated,
so will the transportation industry