Imperial Valley press., 1942-02-19
CAPITAL TALKS
by
Peter
Edison
WASHINGTON. Feb. 10

WASHINGTON. Feb. 10. Dis
location of the automobile industry
itself is only the first step on TIM
downward trend OF Americas pre-
war civilization on wheels Loss o.
Jobs By 100000 or more automobile
factory workers. while the plants
are retooling. is temporary. They'll
al! get other and perhaps better
Jobs III war plants.
The real blow comes below the
manufacturing level hitting the
10000 or more dealers with their
$4,000 employees. the $4,000 repair
establishments. the $4,000 other re-
tail outlets-cnly a few of which
viii be able to keep going in a busi-
ness run on a rationing basis.
The industry is certain TO be run
on a ratonine basis Cars, buses,
trucks. tires and retreading are al
ready rationed. When present
stocks are sold. that will be all
From this point on, the troubles
begin 10 spread Nine out of 10
Nl oltIS dLlO NllCAA AHJACsNc ana >
have to find other work.
Their troubles are passed on
TO the rial estate operators
who hold the leases of the
automobile dealers who go out
of business. These landlords
must find new tenants. The
tenants must find ways to ter
inmate any long term leases.
Parking lots are included i'll
this business. too.
Banks or insurance companies
holding any mortgages on the rent
ed properties face loss OF inter
est while the premises are vacant.
Banks holding commercial paper
from the leases may have to look
to their collateral for settlement
if they avoid heavy losses
Finance companies which carried
the car owner during the purchase
period will collect their last in
stallmcntS and then have to look
elsewhere to invest their money.
USED CAR TRADE MAY BOOM
One new field may open up here,
the financing of used car pur-
ci.aseS. There is a possibility of
some turnover and some new buSi-
ness in the used car market,
though what may happen here has
not developed clearly. Owners of
ole, used cars may create buy
ers demand for better used cars
Just to acquire better tires. If that
happens. watch first for price
ceilings for used cars as we'll as
new. and watch next for rationing
CT used cars. Yes, it's possible YOU
may have to get permission to buy
q second hand jallopy. You'll have
10 prove you need il.
So until restrictions are put on
the used car market, there is the
possibility that the finance COM
panies, which once Scorned a loan
for used car purchase, may get
into the second hand car business
It IS TO ease the financial bur
Gems on all these upSetS to normal
business that Reconstruction Fin
ance Corporation may make avail
ahie some $3.50 million to tide the
dealers over the war period by
loans that private banks can't
make
Your chain Of consequences leads
mex INTO the fields Of taxation.
Last year. congress passed whole
nrW flock Of automobile ta%"s. H.
uriug this source of revenue would
weld another S245 million 10 hrlp
9ay war costs But all these taxes
we're calculated on normal car use.
With production of motor vehicles
Cancelled into war, these taxes are
cut way down.
Furthermore. state and local au-
tomobile tax collections face a drop.
The total of automobile taxes, fed
cral and local. has been estimated
by the American Automobile AS
sociation at $500 million year.
The net indicated loss Of auto and
gas taxes for next year IS about
$3.50 million This means that $3.50
million in war taxes VIII have to
be raised some place clac.