Business & Finance: The Government's Week: Apr. 25, 1938

Last week the U. S. Government did the following for and to U. S. Business:

¶ Finally produced a full-fledged program intended to defeat Depression. As Franklin Roosevelt explained it to Congress in a special message and to the nation in a "fireside chat." it boiled down to the familiar New Deal story of "pump-priming" (see p. 10).

¶ Put part of the recovery plan into effect. Those items in the President's program which needed no further Congressional approval last week included such highly technical inflationary devices as desterilizing the $1,392,000,000 gold the Treasury has been hoarding for over a year and lowering bank reserve requirements. Closer to home so far as the average businessman is concerned were two other changes in policy: 1) to help small enterprises float security issues, SEC eased registration requirements for issues of $100,000 or less, reduced the amount of information necessary in small registrations; 2) to aid businesses which are unable to get credit under existing banking rules, Franklin Roosevelt signed the Glass Bill permitting RFC to make $1,500,000,000 in loans of any size to anybody for any length of time.

¶ Climaxed its drive on what President Roosevelt considers the monopolistic practices of the cement industry. The industry has long maintained that local monopolies can be avoided only by a cooperative, nationwide, delivered-price system including both production cost and delivery cost as determined from a number of basing points. This meant that when the Government asked for cement bids, the figures were almost always identical even to the fourth decimal point. Calling this practice price collusion at the expense of the consumer. Franklin Roosevelt tried to halt it with NRA, through the Attorney General's office, and finally through the Federal Trade Commission, which has been investigating cement for ten months. Impatient of results, Mr. Roosevelt last month directed that all Federal departments buy their cement through the Treasury's procurement division, that bids be restricted to an f. o. b. basis, that bidders be required to state in writing that there had been no collusion. Last week 24 companies offered bids under these circumstances for the Government's cement contract for the next four months (3,000,000 bbl.). The Treasury was pleased to find all the bids different; the industry was upset because each maker knows that if his bid is too high he will lose out to some competitor for the Government's business, if too low it will irk his commercial customers still buying under the old system.