Henderson daily dispatch. (Henderson, N.C.) 1914-1995, 1938-03-18
Babson Blames Congress
For Business Stalemate
tcontinued from Page one.)


February payments to investors were
$500, 600. coo against $350,OOO,OOO last
wear. AS a result of all these reduc-
lions in income, total pu, chasing pow
ef is far below the PEAKS of 1887. Tt
is not surprising, therefore, that re-
tail trade has suffered. Actually it is
remarkable that sales have been as
good as they nave. Plving is off only
about Is per cent from The 1927 level
while industrial activity has sagged
80 per cent.
We are now in the critical period
of the recession. The next few
months should tell whether or not
must revise my forecast for the en-
tire wear. Up until now there has been
little danger of another RAZOR depres-
sion. Basic conditions have beer SCUM
There has been no speculative
pvran1iding Of real estate or stocks,
Banks are not loaded up with ques-
tionable securities and loans. Prices
of raw materials are back at attrac-
tive levels and inventories of goods
have been thoroughly cleaned up in
most industries.
Danger Point Near.
Business is constantly moving one
way or another. It does not stay at q
standstill very long. Most of the re-
cession came before the New Year
Since then there has been only minor
decline. We are now at critical
point. The sharp drop in purchasing
power is a danger signal. Depressions
are nothing more than a continuous
IN
Prosperity is the opposite process.
Once the spiral picks up momentum
it is mighty hard to stop. Business
has been very slow for six months and
the spiral has been getting good
start. We will not be in a major de-
preston, however, until pay-cuts and
lay-offs are the word everywhere. The
order "to cut" has not yet been given
out wholesale.
I liken the present situation to a
runaway freight train coming down
the mountain. There are plenty of OPP
portunities to switch it off on a spur
track before it wrecks a passenger
train in the station in the valley be-
low. The train has already passed sew
eral of these cut-offs. But the yard
men apparently cannot decide which
cutoff to use. They are standing q
round arguing among themselves over
some petty railroad red tape. Mean
while. the freight slides on toward the
village below. In my analogy. bus:-
ness is the runaway freight, while our
congressional leaders are the blunder-
ing yard-men.
Nero Riddles.
Since the recession started, Con-
gress has been in session nearly fouS
months. Only two important acts have
been passed: the housing act and the
farm act Both are recovery meas
ures'. but neither one gets at the root
of our trouble. The housing act would
step UP building if union labor would
help. But it can do little under cur
rent conditions with labor costs ex-
horbitantly high. The farm act is SO
complicated that few people even un
derstand it. The feeling is that it will
aid somewhat-bu largely in the d.
rection of Res'shand-outs."
+ Every business man knows what the
real problem today: Lack of con-
fidence in the future because of I'm
necessary Federal spending and a
vicious taxation system! Every MEM
Der of Congress knows this, too. Yet
Washington dilly-dallies over politics
and does nothing about the house
cleaning that is necessary. Taxes are
throttling new enterprise and expan
sion but the proposed revenue bill is
Just a rehash of the present patch
work system. The utilities would
spend millions on new construction
if Congress would end the terrific I'M
certainties which this industry faces.
Inertia at Washington is jeopardizing
recovery.
Two Reasons For Bullishness.
I have not turned bearish, however.
There are still two possibilities which