The Waterbury Democrat., 1938-04-18

OAAON6AA'
 The Big Spending group is led by Mariner Eccles, chairman of the Federal Reserve Board. Close cohorts are PWAdministrator Ickes, WPAdministrator Hopkins, Senators Wagner and LaFollette, and Representative Maury May erick.
 The Little Spending group is led by Jesse Jones, head of the REC, Vice President Jack Gar ner, Senator Carter Glass and Old Guard Democrats. Their arguments already have been well publicized.
 Less publicized are the argu- ments of the Big Spenders, which follow: On the shelves and in the warehouses of American industry today are excessive inventories of manu- factured goods and raw mate rials, so that when buying resumes it will be these stocks which will be sold. Their sale, however, will not create em- ployment.
 What is needed, therefore, say the Big Spenders, is 8 spending program large enough not only to absorb these inventories but to encourage new production.
 Mariner Eccles urged that Q billion dollars be spent last win- ter, claimed that this amount spent soon enough would check the recession. But his group fears that now, with the lapse of time, even the $2,750,000,000 relief and public works program will not be sufficient.
 Roosevelt agrees that there may be considerable merit to this argument, but being up against the tough reality of rebellious Congress, he is steering a middle course between the Big and Lit tie Spenders.
 Buyers Market
 Meanwhile John Hanes, bril- liant new member of the Securi- ties and Exchange Commission, has produced a formula for get ting rid of the big inventories now cluttering the nations ware houses.
 He points out that present low prices are partly pSychO- logical, and result because the buyer expects prices to go even lower. In other words, it is a buyers market.
 Since the manufacturer cannot hold out indefinitely without sell ing goods, the buyer figures that the longer he waits the greater the likelihood of lower prices. If he is shrewd he proDably knows that the manufacturer has bor- roWed from his bank, and that with no market opening up, the bank is likely to ask for some thing on the loan. At this point the manufacturer either has to cease production, or enter the dis tresS market.
 This is what is keeping prices down and handicapping recov- cry all over the country.
 Commissioner Hanes' solution for this is to have the Recon struction Finance Corporation take over 90 per cent of the loans which any local bank has ad- vanced to a manufacturer on these terms:
 The manufacturer could bor- row up to 80 per cent of his cost of production and up to 25 per cent of last years produc- ton - in other words, three months production. This latter provision is inserted in order to prevent any one manufacturer from speeding up production too far ahead of the market.
 Theory behind the plan is that as long as the manufacturer is sure of reasonable credit from his bank, he can keep prices up and does not have to sell at a sacri- flee.
 RFChairman Jesse Jones has given the plan his tentative bless ing, and 1t may soon be put into operation.
 Business Fire
 The best definition of the pres ent pickering over recovery measures is given by Max Gard ner, fortnight ex-Governor of North Carolina, who says that the political squabbling reminds him of a house on fire with two fire companies arriving simultan- eously.
 "Instead of putting out the fire," says Gardner, "they begin arguing over whose fault it was that it started. And before they can decide that, they have