The Charlotte News

Wednesday, September 7, 1938


Site Ed. Note: We include the other editorials of this date, separate from the previously posted editorial "A Man Abstracted", contained in the 1940 big book of editorials and editorial cartoons from across the country during the period 1938-40, What America Thinks. Other Cash editorials contained in that book may be accessed from the drop-down menu available at the top of the page containing "A Man Abstracted".

We provide for you, too, the front page from this day's News, more for its two pictures than the print, the one being an interesting and unusual candid moment of FDR, apparently concerning the attempted purge of Milaird Tydings, the other to suggest just how far and fast armament went from this time in 1938, when France was moving guns along its German border via horse-drawn carts, and that just seven years hence when Fat Man and Little Boy would be dropped on Hiroshima and Nagasaki--the end of relative worldwide innocence, brought on by the madmen of Berlin, Rome, and Tokyo and their cadre of madmen.

We also include from the editorial page of this date the following, an interesting suggestion that the pre-automobile age in the small villages and towns of America was not, as commonly still probably assumed, some Idyllic haven for cheap goods and provender, as well as a reminder to Big Business, still a good reminder, of its constant symbiotic relationship with all stages of government, local, state and Federal--not to mention its dependence on ordinary people, its labor and consumer base--inevitably necessary for the steady maintenance and increase of its markets; yet we would query, from today in 2006, whether in this post and super-post modern age, from roughly 1950 onward, has the relative affluence especially of American society, especially as it saw and has continued to see the further building of roads, for ever more automobiles, ultimately finally outrun itself, to the danger that the whole system which supports it all, that is not just a local, state, national or world economy, but the very environment of the great globe itself, becoming so artificially contaminated and distracted from natural currents, is in danger of world-wide collapse, a collapse wrought ultimately by over-burdened Nature itself?--we ask as we endure a Southern winter January day, with spring-like temperatures and thunder showers, where ordinarily it would be in the thirties or lower, and, more often than not, frosty, man, frosty:

Berle Looks At Monopoly

[Note: A. A. Berle Jr., one-time Braintruster, more recently Assistant Secretary of State, "liberal" but often [indiscernible words] of the New Deal, was asked by two members of the committee investigating monopoly to prepare a memorandum on the subject. The excerpts which follow are from that memorandum. As Mr. Berle said of his notes, they do not "purport to be complete." They are published, rather, on the assumption that they will be interesting and provocative.--Editors, The News.]


There is a tendency to idealize the early nineteenth-century and to assume that small business and the prices it charged were the result of competition. As far as I am able to see, there is little, if any, foundation for this. The village grocery store, the village blacksmith, the village grist mill, were all monopolies. Until the advent of the automobile, they charged conventional prices or administered prices which were not elastic. The people of the village could not go many miles to the next town. In a large measure this is still true in small towns. Such competition as there has been, curiously enough, came from large-scale enterprise: mail-order houses, and later the chain stores. The theory that prices were adjusted by competition under the old small-scale production in small towns, as far as I can see, simply never was generally true, despite some nostalgic reminiscences which are indulged in today.


There are two distinct preconceptions which cancel each other. One of them is that large-scale enterprise is more efficient: the second is that it is, by hypothesis, less efficient as it grows.

I can see no reason for indulging either preconception. The only solid factor about it is that pointed out by Mr. Brandeis on many occasions, namely, that a large-scale enterprise will frequently and easily outrun the moral and mental stature of the man or men who direct it.


Here is a tremendous field which should be thoroughly opened up. This is peculiarly true in view of the attitude of some people that the Government is so much overhead which it has to carry. For instance, the automobile market would cease to exist if the local, state and Federal governments stopped providing roads. Certainly the expansion of roads and road improvement has had to go hand in hand with the expansion of the automobile industry: when road expansion stops, the automobile industry will run into a saturation point within a very short time.

Relief to workers in time of lay-off is a subsidy to industry. General Motors, for instance, pays an average annual wage of approximately $1,100 a year. When plants are running full this about takes care of the worker. When the plants "shut down" or lay off men who are unable to save on this wage go onto the relief rolls. If this were classified as a cost of General Motors, there might be a different picture of the extent to which General Motors depended on the Government for its profits. It will come as a shock [indiscernible words] that unemployment relief is essentially a subsidy: but I see no escape from the underlying economics of it.


It is obvious, though not commonly noted, then in any given industry the large-scale unit has a huge preferential position in the matter of raising capital. My belief is that this preferential is the greatest single factor in encouraging large-scale as against small-scale industry. Specifically it would be found that there is almost no machinery by which any concern can enter the capital markets on decent terms to obtain capital of less than, say, $3,000,000: and that ability to obtain that capital increases steadily and the cost diminishes as the size of the concern increases.


It is already been noted that small industry does not have the same access to the capital market as does large industry. A small step in the right direction was made by the change of the rules of the Comptroller of Currency with reference to bank loans and investments; but this is too limited a step to have general effect.

A real system of capital credit banks is plainly indicated: a system which would have to be backed by a capital reserve bank (presumably, a division of the Federal Reserve Bank) able to create credit, and to join in contracting it when necessary. This calls for a separate study.

Until this is done it is mere waste of time to grouse about "Wall Street." The Wall Street banking system is doing exactly what one would expect it to do--no less and no more. If anything real is be accomplished along this line, the foundation has to be laid for a capital credit system that really works.

(To Be Continued Tomorrow)

The Eternal Feminine

No part of this or any preceding Five-Year Plan was a perfume factory for the female of the Red species. Yet demand for this toilet article has become so insistent in Russia that Papa Stalin has ordered a plant to be built to make perfume bottles.

And the other day in New York, Red flappers, professing Communists every one, had a beauty contest complete with first, second and third prizes, News photographers, bathing suits, entranced judges, evening gowns and all. If the younger generation of girl Communists don't watch their step, their taste will have completed a cycle and begun again to esteem bourgeoise refinements and fashions and the small talk of young men over significant social speeches.

Brothers in Democracy

Within 24 hours after President Roosevelt made his statement about preferring the liberal Republicans to anti-New Deal Democrats, the Democratic Congressional (House) Campaign Committee came out with one of its own to the effect that would unquestionably go down the line for party nominees. The Senate Campaign Committee had taken the same position when Senator Pope, defeated by Representative Clark in Idaho's Democratic primary, called at the White House to solicit the President's endorsement if he should run as an independent. The Senate committee volunteered the information that it would support Mr. Clark, the Democratic nominee.

Lest this be taken, however, as a sign of independence among Congressmen and a widening rift between the the President and his fellow Democrats, it should be pointed out at once that the President isn't running this year. Whereas every last Representative and a third of the Senators are running. And to one running on a party ticket, nothing is so important as the party organization. Even Old Borah, much as he kicks Republican traces during off years, always assumes the aspect of regularity at election time.

The President, whose term doesn't end for two more years and who may never run again, can afford to humor his notions about liberals and conservatives irrespective of party label. But these Representatives and Senators on the firing line--they know that lodge brothers have got to stick together or be stuck separately.

That Mystery Again

Since June 1934, when the Silver Purchase Act was passed, this country has increased its silver holdings nearly four times over, from 696,000,000 ounces to 2,415,200,000 ounces. The Treasury has paid out nearly a billion dollars in good hard money for this bullion, and though mere storage has become a problem (half of the horde is cached underground in an enormous vault that West Point), it is committed by the Silver Purchase Act to keep on buying silver until (1) it has a third as much on hand as it has gold or (2) the price reaches $1.29 an ounce. Due to the influx of gold the Treasury still has another billion ounces of silver to buy in order to carry out Congressional orders. As for price, the world is paying 43 cents an ounce for the stuff, a far cry from $1.29.

Claims put forward by advocates of this Silver Purchase Act at the time of its passage were that it would strengthen our trade relations with silver-using countries, that it would "break the backbone of gold," and that it would practically sweep us into prosperity. It has done none of these things; quite the contrary, it upset China and Mexico. It has been condemned by nearly every economist of any standing. It is utterly pointless except as a relief measure for Western mining states. But--

Still the Treasury continues to buy silver. It's a mystery.

In Labor Circles

When the President selected the commission to go to England and find out how our elder cousins manage their labor relations so admirably, John L. Lewis refused to let the CIO take any part in it. His believe evidently was that since CIO was making great headway under labor laws as they are set out for this country in the Wagner Act, it would be wise to resist even any examination of other, more conservative models. But--

When the Latin-American Labor Congress, a pretty pinkish outfit, issued invitations to United States labor moguls to attend its sessions in Mexico City, it was the AFL's William Green who declined and Lewis who accepted. When he arrived Monday, he was greeted enthusiastically by all the little brown skins, among whom, in all probability, were more than a few syndicalists and potential revolutionists.

We refrain from advancing that hypothesis that birds of a feather flock together, being content to call attention to the different kinds of parties our labor leaders attend.

Outside Competition

Last year Canada produced a record tobacco crop, mostly flue-cured, of 71,457,000 pounds. This compared with 46,116,650 pounds the season before and an American crop that usually ranges between a billion and a billion and a half pounds.

It was partly favorable growing conditions that accounted for Canada's bumper crop, partly a twenty per cent increase in acreage. And what had something to do with the increase in acreage was, in all probability, crop curtailment in the United States. Canadian growers, out of reach of any Triple A, were quick to perceive their opportunity.

Canada's tobacco production does not imperil the Southern tobacco farmer, and probably never will because of the limited area suitable for tobacco culture. But each little bit hurts and recalls Senator Bailey's statement made to North Carolina farmers last year at about this time. He said then, with reference to crop curtailment:

"Sixty per cent of the tobacco produced in North Carolina is sold abroad. The other nations will learn how to produce tobacco. They are buying our seed and even sending for our farmers... In the long run, we must come to the export debenture or bounty plan in order to maintain a world market for North Carolina tobacco."


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