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About The Omaha guide. (Omaha, Neb.) 1927-19?? | View Entire Issue (Aug. 19, 1939)
NECK-DEEP IN POLITICS In an article on the TV A and the recene Congressional report concern ing its policies, Dr. Lewis Haney, Pro fessor of Economics, at New York University, mak(*s this observation: “There are two main questions: 1. Is the Federal Government suited to run a business? 2. Does the mixture of pow er production with flood control, etc., make a good power ‘yardstick.’ “The TVA was put over (and its con stitutionality was defended) on the ground that it would aid navigation, control floods and prevent soil erosion. The production, sale and delivery of electric power were distinctly incident al. The power was regarded as a by product. “And the power IS a t*y-product. This means that it is produced without di rect regard to what it costs, and that its cost cannot be accurately deter mined. Under the best system of ac counting, it would be impossible to find out precisely what is costs to pro duce a kilowatt of TVA electric pow er. It would be impossible to, know how much of the total TVA costs are chargeable to navigation, flood control, etc., etc. Under political management, we can be fairly sure that the propor tion of costs charged to power will be too low.” More than the TVA is involved here. A precisely similar situation obtains, to a greater or lesser degree, with ev ery one of the hydro-electric projects with which the government is blanket ing the country. It is argued that Grand Coulee is primarily an irriga tion development, and that power is incidental. It is argued that Bonne ville is primarily a navigation develop ment, and that power production is incidental. It is argued that Boulder Dam is primarily a flood control de velopment, and that power is incident al. And so the powier is sold at a price that, in view of the most competent engineers, is below cost of production if all costs are honestly figured, and the taxpayers hold the sack. Mr. Haneiy suggests that the TVA should be taken entirely out of poli tics, and “should produce no more pow er than required to use its plants eco nomically, and should sell its incident al electric power at wholesale for pri vate distribution.” That is sound and fair—and what is sound and fair for TVA is sound and fair for the other projects. At present, “power” is in politics neck deep—and just taking it out would im measurably level the road to recovery. BODYGUARD An authority on insurance recently said: “Life insurance is sending money on ahead—so it will be there when you get there!” That puts the case in a nutshell. Ev ery life insurance policy, as Calv*in Coolidge once phrased it, “is a decla ration of independence.” It is the indi vidual’s economic bodyguard against the vicissitudes of the indeterminable future. -oOo STATE TRADE BARRIERS A short time ago the National Con ference on Interstate Trade Barriers met at Chicago. Some 400 delegates from 43 states attended, including Gov ernors, Commissioners, Secretaries of Agriculture, etc. State trade barriers have generally been established for one of two rea sons—first, need of adcj/tional state revenue; secondly, the demand of pres sure groups wishing to get rid of out- * side competition. As Governor Stark of Missouri observed in a keynote speech, these barriers, in effect, pro vide a subsidy for organized minorities, and ultimately are disastrous to busi ness. The conference unanimously ap proved a resolution holding that “the taxing power of the states not be uti lized to effect discli jminations or to ef fect barriers to interstate commerce.” Another resolution, also unanimously adopted state that “any law, any reg ulation, or any ordinance of ny state, county or municipality that is punitive to any store or any other legitimate distributing agency of any wholesome agricultural or horticultural product is a trade barrier to the extent that it hinders or hampers free and orderly marketing, detrimental to both the producer and the consumer.” In too many cases the trade barrier has been used to an extreme, and has artificially forced up the cost of neces sities to the consumer while narrowing the market of the producer and manu facturer. In effect, these barriers are tariffs—which, made stiff enough, can amount to virtual embargoes on the produce of neighboring states. The trade barrier falls into the same category as punitive tax laws directed against certain businesses, legalized price-fixing, etc. Such laws may be of temporary benefit to a minority. But they do lasting harm to the interests of the great majority, and principally the family of small means, to which the budget problem is a pressing issue . No genuine public good can come from pre venting honest, ‘open competition in any field of endeavor. _ aAa v vy w--■ SMALL POTATOES What has happened to the much ballyhooed “economy drive” that was supposed to be gaining momentum in Congress a month or two ago? Late news from Washington indicates that the urge to spend is still dominant— and that the urge to retrench and e liminate some of the waste in govern ment is pretty small potatoes right now. Worst of all is the apparent public indifference toward spending. It was not so long ago that the nation was genuinely aghast wrhen a congress ap propriated two billion dollars. Now Congresses appropriate eight or ten billion, blandly oblivious of where the money is to come from, and we take it fo rgranted. Spenlding is like the narccjlic habit— the more it is in dulged in, the more the habit gets. However, the Amerioan people won’t be able to continue this indifference in definitely. The problem of financing the; deficit becomes steadily more dif ficult. So much of our money has gone into government bonds, that the ordi nary sources of productive capital have steadily dried up. More money for government means that there is less and less money for Industry and commerce. And industrial paralysis is the inevitable result. We have been told time and again, by men of unquestioned authority, that we are surely on the road to bank* ruptcy. We have been told that the in dustrial expansion we all hope for ne‘ eessarily waits upon our chaotic fiscal policy. We have found out from hard experience that capital goes into hid ing and stays there in the face of tax laws that take the bulk of the profit out of commercil undertakings, and regu lations that so hamstring industry that it is no longer its own master. We knoj.v the sad truth that badgered, sweated industry can offer no jobs for the millions on relief. We know all this—and yet we go on ' spending at the “emergency” rate. That “emergency” has lasted a good many years now, has cost us tens of billions, and has placed us high on the list of the debt-ridden nations of the world. Isn’t it about time to actually put into effect those policies of thrift and economy which the politicians preach when seeking votes? --0O0 ROAD TO PROSPERITY “A return to normal and reasonably permanent prosperity is inevitable if the people are permitted once more to transact their affairs in accordance with proven principles of progress,” in the opinion of W. T. Grant, President of the American Life Convention. Those who are connected with the life insurance industry are fully ac quainted with the kind of progress that follows free play of individual enter prise. This industry, under sound reg ulation, has become one of the finest examples of industrial probity, solven cy and progress. The men who make the nation’s laws would do well to think this over when new and restrictive “ex perimental” legislation is proposed. -0O0 NO CAPITAL STRIKE — JUST FEAR According to reports from Washing ton, a group of more or less left-wing government officials is advocating a decisive governmental attack on what they term the “strike” of capital. Part of the attack would be centered against the banks, on the grounds that they are hoarding money. This program might turn out to be a rabble rouser among the uninformed, but that is all that can be said for it. Banks are cautious with their deposits not only is a matter of duty to deposi tors, but because government regula tions require it, and because, under chaotic conditions today, avenues of safe investment are steadily closing. Any banker in his right mind wants to make as many sound and profitable loans as he can—it’s not his fault that comparatively few can be found. Stable governmental policies which would do everything possible to as sure business a profitable future, would do more than anything else to break the so-called “strike” of capital, which is nothing more or less than the fear on the part of millions of citizens to invest their savings, in the face of political trends that tend more and more to reduce the chance for profit, and safety for private capital. Attack ing business which is doing everything it can, under the most adverse condi tions, to serve America, will produce more fear, more uncertainty, more de pression—not less. It will be a national tragedy if a group of politicians, blind to the lessons of the past, is permitted to go in for more destructive business baiting. _ _nHn_ LAUNCHING A BOOMERANG Ho who seeks to destroy others by government regulation, is himself like ly to be destroyed by government reg ulation. That eminently sound conclu sion was reached by Dr. Paul H. Ny strom, Professor of Marketing at Columbia University, in a recent address in when he commented on the short sightedness of those who pro pose punitive legislation and taxation to destroy cain stores. He said those responsible for such prdj |osals “are likely before long to discover several reasons for being sorry. Have they heal’d of consumer cooperatives and their possibilities for rapid growth if the public should grow tired of seeing the squabbles and the consequent wastes in the present systems of dis tribution? Do they know that the na tional government may at any time become an important factor in the dis tribution of goods? Are they ready for publicly controlled prices? “Most wholesalers and im/.vidual retailers are probably smart enough to recognize that worse things than chains can happen to them, if consum ers should decide that way, these worse things are apparently not far awray. “Using legislation and the help of politicians to crush competitors who are themselves engaged in legitimate methods of doing business is at any time dangerous. It is doubly dangerous now% not only for its possible kick back on those W'ho attempt it, but also as an additional argument that will be used by those who urge that business, cannot conduct itself properly without governmental regulation and control. It is perfectly obvious that the destruction of honest competition in retailing wdll inevitably result in high er prices. It is equally obvious that an intelligent public will not accept arti ficially-induced higher prices, quietly. Those who ask government to penal ize the other fellow turn loose an all destroying boomerang. —-0O0— The Root of All Evil Much misquoted is the tenth verse sixth chapter of the First Epistle to Timothy. Correctly it reads that “the love of money is the root of all evil.” Not money, but the love of money. It was written nineteen centuries ago and the opinion has now been approv ed and affirmed by the Public Affairs Committee, Inc., whose spokesman is Winthrop D. Lane. His pamphlet, just published by the committee asserts that “as a people we attach too much importance to money,” and this misguided sense of values is a major cause of crime in America. The urge to make money blurs the dividing line between right and wrong. Probably Mr. Lane speaks painful truths, but Horace said it first. “Money, make money, by honest means if you can. If not by any means make money.” Alexander Pope, the poet, also said it. “Get money, money still, and then let virtue follow, if she will.” There is more novelty, though no less truth in Mr. Lane’s opinion that “the line between some business prac tices and such crimes as theft, robbery and’ burglary is very norrow and dif ficult to see.” Many well meaning busi ness men have pondered the same prob lem. Some accepted standards and practices of the business world could never serve the needs of an honest pri vate life. A man may be compelled to anesthetize his personal conscience while he earns his living. Now and then comes to light a dra matic contrast between a decent and honorable private life and outrageous dishonesty in business. Sometimes somebody goes to jail for stealing and swindling whose private life had been scrupulously respectable. The love of money did it, says Mr. Lane. But Hor ace and Paul of Tarsus said it first —-oO o Advertising Means Increased Business
