The Kennewick courier-reporter. [volume] (Kennewick, Wash.) 1914-1938, 1938-01-27
ECONOMIC H1GHLIGHTs


business looked this week for clues
to what's ahead" That has been
largely true ever since 1929. It is
probably more true today than 1t
ever was before. Politics has be-
come the dominating factor in the
business situation and the business
outlook.
Number one late Washington &C.
currence was the Presidents state
ment, made at a press conference
to the effect that he wishes the ult-
innate of all holding companies. He
specifically mentioned banking hold
ing companies. The public Utility
Act of 1935-whose conStitutionality
will be finally decided by the SUI
preme Court this term = demon
strated the Administrators policy
of eliminating holding companies in
the public utility field, but up to
now no one believed the President
was looking into other fields. His
statement was greeted with both
wonder and amazement in finan-
cial circles, which pointed out that
about half of all the widely-held
listed securities represent concerns
which are wholly or partly holding
companies by nature, and said that
it would be impossible to accurately
guage the effect Of wholesale
withholding company policy until
Mr.. Roosevelt clarifies and explains
his views and purposes.
The holding company declaration,
coming on top of the recently in
augurated anti-monopoly move
ment, further illustrates the WIDEN
ing breech between an administra-
ton which is still clinging to its or
iginal more or less revolutionary OBJ
jectives, and a congress which seems
to be daily turning more conserva-
tive and dubious of White House
policies. It likewise further en-
phasizes the tremendous cleavage
of opinion that exists between the
administration and American BUSH
ness-at-large.
Less-headlined, but of unusual
interest, was an investigation" on
the subject of employment which a
senate committee recently held. As
Time says, ITO the public general
ly, senate investigation means a
scandal hunt" This one was very
different - the committee honest
ly wanted information, and the
questions asked were generally de-
signed to achieve just that, not to
smear the questionee.
One witness was Federal Reserve
Chairman Eccles, representative Of
right-wing administration opinion.
Mr.. Eccles, who has long advocated
immediate budget balancing. attri-
buted the business slump to the SOL
diers' bonus payment. which ac-
centuated inflationary sentiment,
and to strikes, increased operating
costs for the railroads. lack of ex-
pansion by utilities and the gov
ernment's effort to reduce its con-
tribution to consumer spending
power. He said it was necessary
to reduce 'monopoliStically control
led prices and wages which are now
too high"
Another witness was General Mo-
tors William Knudsen, who des-.
cribed the dilemma in the automo-
: tive industry, the amazing fast drop
in new and used car buying, spoke
of "fear psychology" as factor in
producing bad times. and attribute
ed this in part to governments at
titude toward business. A similar
opinion was expressed by Robert
Wood, Sears Roebuck president, who
said that business lacks confidence
and is scared and observed that
the businessman "has been dubbed
over the head many times" Mr..
Wood also said that a number of
specific factors led to the current
slump, including: overproduction in
the spring of 1896; sterilization Of
gold; increased Federal Reserve re-
quirements, and the fact that pri-
vate spending did not take up the
SldCk Wlltll UllC bC6oAA
slowing down some of its emery
ency activities. =-.......E ..
All of these witnesses likewise
agreed that abnormally large in
ventories had contributed to the
unprecedented sharpness Of the de-
cline last fall and early winter. The
inventory situation is gradually be-
ing corrected now, and in some in
dustries recent figures Indicate that
inventories are excessively low-one
Of the main facts on which the
many economists who look for an
upturn this spring or summer put
their hopes. . ..
So the debate goes on. In the
meantime, the actual business in
dices have not changed much lately,
with improvement in some lines Off
set by further declines in others.
Certainly automobiles are cheap.
, Why a war that would kill as many
people as cars dc would cost ten bill