MARCH OF THE N.R. A.

Auckland Star, Volume LXV, Issue 21, 25 January 1934, Page 24

MARCH OF THE N.R. A.

I THE TROUBLE SPOTS. GOLD LEAK CAUSES. CHICAGO MILK RACKET. (By PAUL MALLON.) WASHINGTON, December 14. The confidential reports Mr. Roosevelt is getting on the business outlook arc highly optimistic. The experts who work in his own private economic laboratory have advised him that things generally look rosy for at least three months to come. That is not propaganda, but apparently sincere opinion. Such opinions have not been worth much since so many of them went wrong in 192!), but these are as good as you can get. Their conclusion is somewhat amazing. Most of the business indices have been slipping a little during the last few weeks, or, at host, holding their own with difficulty. Steel, automobiles, car loadings, and even commercial electrical consumption have been frozen by the first winds of winter. The optimism is based on obvious expectations. Banks are generally in good shape for year-end statements. The money policy howl has died down to a gurgle. The belief is general that the gold price will not go much higher. The Government is passing out money on a scale which will reach its height some time during January and February. Its financing worries are largely over until April 1. Christmas sales reports are generally good. The money.policy has helped cotton immeasurably through the south. The wheat and corn-hog cheques arc doing the same thing for the West. The Hopkins relief cheques are thawing the purchasing power of tlie city poor. Prohibition repeal has started a large legitimate new business. The Wall Streetcrs decline to credit any bad news, and are sending the market up. The belief is general that higher market levels will be reached within three months. On top of all that you have the normal business trend expectations. Business always starts to awaken as a normal prelude to spring.

Congress Reactions. Usually the experts become frightened at the convening of Congress. Not 160 this time. Mr. Roosevelt has Con- [ gress fairly well under control. There will be jio appreciable split in Democratic ranks on the money issue. Senator Glass may cuss a little, but the Democratic majorities of both Houses will be largely with the President. In addition, he will have the Progressive Republicans. That leaves about 20 per cent of Congress, the group of Republican Conservatives, as the only opposition. That kind of opposition may help Roosevelt's game more than it will hurt. The prospects therefore favour a tame Roosevelt session rather than a lively Opposition one. Pop Goes the Weasel. The one trouble spot to which the experts are looking forward ie the financing the Government will have to do in the spring. All these expenditures cost money. They are going to make financing more difficult. Action must be taken regarding a billion in Liberty Bonds coming due April 1. Also there is the troublesome question of capital financing. Opinions about it differ. The majority saj-s Mr, Roosevelt will have to thaw the capital finance market, or his recovery will hit a spring setback. They are demanding amendment of the Securities Act. The Gold Leak. The Treasury investigators believe tliey have found out what caused the gold leak. The figure is telephoned to the Federal Reserve Bank of New York as soon as it is fixed. The Federal Reserve Bank has open cable connections with the Bank of England. The news gets to London almost instantaneously. In announcing it here officials walk from the telephone to a mimeograph machine. An announcement is concocted and run off. Under this set-up the figure has reached London seven minutes before it arrived officially in Wall Street from Washington. The way the gold price has been running lately no speculator could make any money out of it. Advance knowledge concerning it would not be worth a dime to anyone. Treasury officials really do not believe any speculator has bribed a Treasury employee. They will be surprised if they get any evidence to that effect.

End of the - Rope. The tax rates we have now just about reach the end of the rope. The burden is far heavier on everyone than it was in war times. Rates "cannot be jacked much, higher without arousing a tax revolt. Also there is a question whether higher rates would bring any more revenue. People usually resist excessive taxes in their own quiet way by not paying them. What is needed is an intelligent study of the whole Federal taxing system to develop a new scheme so the Treasury can have the money it needs with a minimum burden on the people. That is the new tax deal Mr. Roosevelt will spring within the next year. Gunmen and Milk. The Chicago milk situation has the new dealers thoroughly flabbergasted. Those who pried into it say the only practical solution is for th Government to hire its own gunmen and send them out to enforce the code. Tliey-are convinced gangland is in the milk business almost as deep as it was in beer. And for the same reason—big profits. I Seriously, the Government is at a comr •plete loss as to how to proceed. Its evidence indicates the price-cutting independents are making 100 per cent out of selling milk at seven cents. The large combine charges around 11 cents. The little fellows are quite content with 100 per cent profit. They swear no code is going to make them charge more. Their prices run all the way down to five cents. One had his store bombed, but he charged that up to profit and loss. I It happened the day after a gruff fellow called him on the telephone and suggested he was not very smart selling milk so cheap, because he might awaken some morning and find his store strewn all over the street. It was, within a few hours. The gruff fellow suggested on the stand that jealous independents had done the job. Maybe it wa? spontaneous* combustion. Notes on the News. Ford sources say his business was not hurt during his N.R.A. scrap, but that may be accepted with a grain of salt. It is all over now. It is generally believed that chairman A., E. Morgan, of the TVA, is losing more inside fights than he is winning. They say Harcourt Morgan is really the chairman. • , -

A Havana newspaper is digging up the past of the new American Ambassador, Jefferson Caffrey, particularly his connection with the Barco concession granted while he was Minister to Columbia. They plan a big welcoming attack about the time he arrives in Havana. It's all ancient history here, but it may have an influence on Caffery's future position in Cuba. What business men are counting on most are the self-healing powers of natural economics. Any doctor will tell you the remedies of Nature in the body are more important than the best medicine. That also is true of the economic body. Inside "Scrapping." This innocent-appearing new National Emergency Council is not the trivial thing it is supposed to be. No one paid much attention to it, because the White House said it would only be an information bureau of no importance. A handout was issued inviting all citizens to send Government inquiries to this new council. That is the way it will work for the present, but sceptics noted that the official executive, order issued by the President did not say anything about information. It talked about "coordinating" all the Federal relief and recovery agencies. Deep down in it was a provision giving the council any authority the President cares to give it. Therein lies a talc. The President is just about fed up with all the inside scrapping that has been going on among his new dealers. There has been a complete lack of harmony between the Liberals and Conservatives in the N.R.A, A.A.A., and all the other alphabetical supers. These two opposing forces are rarely able to agree, and he has spent most of his time lately rcfereeing bouts between them. His new council will bo a super council over all the other supers any minute he chooses to make it that. He puts his j close friend and good servant, Frank Walker, as head of it merely to hold the bag until he is ready to show what is in his sleeve. "We do not think along the same lines," Peck explained. The President suggested that Peek go down to sec Wallace. He thought they might get together. Peek did. He even went out on a trip with Wallace. He came back and reported they were no nearer an agreement than before, but he thought they could get along. At that time he did not know Tugwcll and Frank. Some Improvement Fingerposts. Business psychology is so much better hereabouts that certain Wall Streetcrs are trying confidentially to organise a bull market. There is nothing particularly outstanding in the immediate picture. No one believes we are going to leap into prosperity. Yet the impression I is general that nothing can stop gradual | progress toward a good spring rise. That is, the money policy uncertainty, the N.R.A. hoopla, the agricultural prospects, are all being discounted by the best judges. There is a substantial feeling that things are gradually getting better, and will continue to get better regardless of the Administration relief and recovery programme. None of the non-partisans shares the published view of Senator Fess that "we are going to hell." They pay little attention to such statements, ascribing them to political motives. Most of the sound Republicans also doubt the wisdom of singing such a chant of death. Some arc really fearful that the Administration will do something to impedo recovery, but they recognise the better psychology now existing. Bargain Sales." Bootleggers hero held "going out of business" bargain sales when repeal was announced. Scotch and Cognac were sold by the case at a rate of 10/0 per bottle, while legal liquor authorities in nearby Maryland were charging fl and 24/-.

The wets are grumbling a.bout the strong regulations Mr. Roosevelt is putting on the liquor traffic. Congressman O'Connor sarcastically said he preferred the former prohibition to the latter. National City Bank made a strong advertising virtue out of its acceptance of Jesse Jones' preferred stock plan. It ran large advertisements in Wall Street papers. A Russian Query. The big Russian trade boom is turning out to be less simple than the ardent advocates of recognition contended. International trade is built on the exchange of goods. We can sell Russia plenty, but there is little we can buy from her. That leaves a serious problem of how she will pay us. The inner disposition is turning more and more against the idea of lending her any substantial amount of money for domestic purchases, except in cases where we want to get rid of surpluses. The truth is, we have a surplus of nearly everything Russia can export — lumber, wheat, oil. About all there is left is caviar, vodka, and manganese. Administration ferrets are digging up data on a new Klan-like outfit, supposed to be organising pro-Hitler and anti-Jewish sentiments in certain localities. This new outfit works on a membership fee basis. Members wear shirts of a new colour, and organisers sell them the shirts. It sounds as if there ought to be a good profit in it. Placidity. There was not one-tenth of the enthusiasm advertised in this part of the country when the liquor stores opened. Private clubs did not generally hold celebrations as they did at the return of beer. There was little public merrymaking. Consumers acquainted with friendly druggists continued to get prescription whisky in Washington cheaper than it was being sold in nearby Maryland liquor stores. Others took advantage of tfeotleggers' fire sales, buying what purported to be imported stuff at half what the Maryland stores were charging. The majority of people paid no attention to it whatever, saying they probably would go over to a Maryland store to get a bottle some time before Christmas, if they got around to it. —N.A.N.A.