The Western news. [volume] (Libby, Mont.) 1933-current, 1937-11-18
SEEN
HEARD
around the
NATIONAL
CAPITAL
n IL -

Washington. - An old riddle In
quires: Which came first, the chick
en- or the egg7 And there is much to
be said on both sides. So it is with
the recent stock market nose-dive.
Did the market reaction slow down
business, or did business. slowing
down, start the market on its gyra-
tons?
AS in the chicken and egg riddle,
il is obvious that, whatever the
starter, one will 60 on producing
the other.
But it is interesting In this case
to know that the administration be-
lieves the chicken was business jit-
tiers, while the stock market dive
was the egg the business filters laid.
This viewpoint is particularly in
teresting because the admins
tration is quite certain it knows just
what was the matter with business,
and is now seeking out remedies.
Also because there is bitter resent
ment in administration circles at the
interests it regards as responsible.
The trouble, according to admins
tration insiders, is prices. They
were too high, and consequently
produced something akin to buy
ers' strike. This slowed down a
hundred other lines than those ini-
tiating the trouble by putting their
prices too high. Hence too many
people have not been making mon
ey, too many corporations face low
cred earnings, too many corpora
tons and people are therefore pull
ing in their belts. And stock prices
follow inevitably.
Blame Steel Industry
Chief miscreant in this picture
still stating it as viewed by the adj
ministration--is the steel industry
A close second is cement. Textiles
are absolved, not because the mer
running the textile industry are re.
garded by the administration as
particularly virtuous, but because
the industry is helpless to do any
thing but cut prices to the bone
Ruthless competition is the answer
to that. The administration know.
lot about it because OF the vexa
tious question Of long hours, chilt
labor and poor wages in the indus
try, and because of the pitiou!
screams the industry let out Will,
back against what imports of Japa
nese textiles were doing to its pric.
situation.
| Now, SO far, Is the administration
disposed to blame the AUTOMOBILE
industry. 1t believes the new mod
els should be sold more cheaply
but blame here again attaches t
the steel industry, in the admins
tration view. A long standing auto
mobile policy has been to cut price
whenever possible in order to stimu
late demand and increase volume
That is precisely what the admin
istration wants every industry to dc
It's an old theory with Presiden
Roosevelt. He believes firmly tina
the 1929 crash was caused by hig
prices in the Immediately proceed
ing period. Prices were not &C
vanced, during those few years i
terms of dollars. But costs we're d
minishing due to improved machir
cry. Hence profits were larger
Hence larger percentage of sale
prices was detoured from the quic
spenders, and into the pockets {
investors. Hence overbuilding {
plant capacity and gradual dryin
up OF buying power.
Just what will be done to corres
the present evil, as the Presider
views it, Ii not yet clear.
/ Utilities Hold OFF
Public utilities of this country ar
holding back expenditures of 81 1000
900, 600 a year for improvement
and expansions, the securities an
exchange commission has informe
President Roosevelt, waiting unit
the way for new financing can b
cleared, as they view it, by the 81
preme court ruling that the holdin
company death sentence is unconst
tutional
. This holding back, the Presidel
is informed, has been going on II
three years. The President jul
might have thought that these fl
, ures, coming from a commissie
which has had SO little chance
function since it was organized, b
, cause there have been SO few ne
: security issues, was an exagger
ton. But within q few days aft,
this allegation the utilities exec
' tives themselves tried to use II
same argument to prove to the pu
I lie that the Presidents utility pc
: icy is all wet. They quoted the Ed
= son Electric institute to the effe
Q that there was a construction de
! cit of $4,000, 900, 900 accumulated
the past five years.
!, 1t was added that the ten-year q
4 erage of new construction by Il