In Washington

(See front cover)

Gravely, the U. S. Chamber of Commerce went into session in Washington last week for its 18th annual meeting. Gravely because, first quarter over, Business has not started the long march from Depression to Prosperity, merely marks time, seems dazed at its narrow escape from a drop into the sheer chasm of Panic. Well might the businessmen assembled last week have remarked, together with the venerable Commercial & Financial Chronicle: "Verily, trade and business in this country have undergone great shrinkage."

The most direct expression of what is happening to business is the amount of money earned by corporations. Last week corporate returns continued to be gloomy reading.* Another index is the rate of foreign trade. In March exports were valued at $374,000,000, against $489,900,000 a year ago; imports shrank from $383,800,000 to $300,000,000. Carloadings, a prime indication of the state of trade, were down to a weekly figure of 883,000 for March against 962,000 a year ago. This average, the poorest for March since 1924, found reflection in railroad earnings. Gross railroad income for February was down 10.11% from February 1929 while the $97,448,000 net was off 22.40% and was the worst result for February since 1918. Manufacturing production has fallen off so that the March figure (Electrical World statistics, 1923-25 = 100%) was 125% against 135.7% a year ago. Steel has held fairly well, with March's rate of 122.6% contrasting to 145.2% for the same month in 1929. The U. S. Bureau of Labor Statistics (using 1926 as 100%) give the following price changes for March against March 1929: All commodities, 90.8% against 97.5%; raw materials, 89.3% against 98.9%; farm products, 94.7% against 107.1%; chemicals and drugs, 91.2% against 95.6%; cotton domestic consumption for March was 508,600 bales of lint against 631,700. Building contracts for the first quarter were down to $1,100,200,000, $155,700,000 off from the first quarter last year and the poorest since 1926. Bank clearings, helped by larger stockmarket activity, were nevertheless down 17.8%. Insolvencies for the first quarter numbered 7,368, involved $169,000,000 as contrasted to 6,487 and $124,000,000 last year. Employment continues vague, with the American Federation of Labor probably overstating the case. Labor statistics give employment in manufacturing industries at the end of March as 89.8%, down from 90.3% in February and 98.6% a year ago. Factory payrolls are estimated at 91.6% Feb. against 97.4% a year ago. It is apparent that the same, forces which gyrated to keep business going must gyrate even faster to improve it.

Bull in Bearskin. Alarmed by figures as these, but angered more by faults he claims exist in the Federal Reserve system, a bull last week clad himself in a bearskin. It was no less a bull than William Crapo Durant who said: "With regret I make the prediction that we see next winter business conditions unimproved, longer breadlines, more soup kitchens, continued uneasiness and distress a more pronounced tendency to Social and Communism--this regardless of assurance from Washington that every thing is all right."

Steps. To the members of the U. S. Chamber of Commerce, Mr. Durant's dire predictions meant little, for when so flagrant and persistent a bull as Mr. Durant dons a bearskin, it must of course a great one. But few overlooked his parting shot: "regardless of assurance from Washington that everything is all right." For, apart from usual routine, the purpose of last week's Chamber of Commerce was to review the policy of proclamative assurance that the Government pursued since the break, together with other governmental panicures.

The steps by which the Government endeavored to right matters have been few simple. Last December the President summoned some tycoons and many near-tycoons to the series of conferences at which they pledged no wage reductions, increased spending (TIME, Dec. 16). Overstatement thrived at these meetings, but Panic received its first and greatest set-back from them. Second of the steps was the formation of the Business Survey Conference, which went too far at first in artificial bullishness, but has operated well as "a clearing house for information." Third was the Department of Commerce's campaign to urge state and local governments to sponsor public works, create industrial activity. Fourth was the action of Congress in appropriating $125,000,000 a year for road construction, another way of creating employment and demand for materials. Fifth was the policy of easy money.

Barnes. Each of these steps, with the exception of No. 2, was conducted through a governmental agency. For the Business Survey Conference a committee of 72 was set up, headed by Julius Rowland Barnes, Chairman of the U. S. Chamber of Commerce. In its attempts to probe and advise business, the Survey conference of course worked hand in hand with the Chamber, and therefore its results were the ones that most interested the meeting last week. Julius Howland Barnes likes to talk of his early life, for his early life is the typical story of the self-made U. S. businessman. Office boy . . . laborer in a pressroom . . . theatre usher . . . work before breakfast . . . after dinner. . . . Like many another successful business man, Mr. Barnes has theories and rules for success. Excerpts: "The most excellent advisor a man can have is likely to be his wife. I married when I was 23. . . ." "If a man believes in himself and in other people he is bound to be optimistic, and optimism is one of the greatest of business assets." He worships facts, says, "If a person gets all the facts, I don't see how he can keep on failing, even if he does once or a few times through factors beyond his control. Get the correct data is my advice."

Tall, well-built, dignified, Mr. Barnes immediately suggests success. Most of this he achieved in the grain trade, where, as a private dealer, he became imbued with ideas about the government meddling in commodities. Between Federal Farm Board Chairman Alexander Legge and Mr. Barnes have passed many words, and in the U. S. Chamber of Commerce's stand against the Board is seen Mr. Barnes's influence.

If the War had not taken place, Mr. Barnes would probably have remained in Duluth with his firm, Barnes-Ames Co., big grain exporters, spending spare time in rowing, hunting, and riding. But in 1917 he went to Washington as head of the U. S. Food Administration Grain Corp., and became friendly with another $1-a-year man, Herbert Hoover. In 1922 he became president of the U. S. Chamber of Commerce and during his two terms gave the organization power and prestige previously lacked. Since 1924 he has been its chairman, has continued in business as a grain dealer.

Chambers. Mr. Barnes may be well defined by saying that he is the best expression of Chamber Spirit. As such he has been thoroughly publicized--wherein lies the great virtue and petty vice of Chambers. Today there is scarcely a hamlet without its Chamber and the U.S. Chamber has an ad-packed magazine called Nation's Business, the only real success in its field. The great virtue of the thousand and one Chambers is that they give voice to an otherwise dumb world of Business. That this voice is sometimes vapid is a peccadillo which sophisticates magnify to a sin.

But while local Chambers may speak for local business, the National Chamber has more difficulty in speaking for national business. For the greatest tycoons are indifferent to it. Thus the deliberations of the Chamber this week were of little importance in Wall Street or in the operations of greatest industrial concerns.

Survey. Before the actual meeting began, the Business Survey Conference is sued its long-awaited report through Chairman Barnes. Although headlined in many papers as "better trade conditions in all lines portrayed," the survey was far from that conclusive, perhaps was a cause of the declining stock market which followed it. Even the four points which Mr. Barnes said were the significant phases of the survey could not be said to be bullish by themselves: "1) American industry is fully carrying out the construction program forecast by them last December when the Conference met; 2) A manifest adjustment of production of goods to current consumption; 3) Continued cautious, prudent merchandising policies in retail distribution; 4) The evidence on our foreign trade problems of trade disturbances in other countries."

The actual reports, which Mr. Barnes "submitted to the business world for interpretation by individual judgment," varied in completeness and meaning. Thus a gain in the amount of money held by building and loan societies, and the only April gain recorded for six years by New York State savings banks could be bearishly interpreted as the result of a contraction in trade. Similarly, a record volume of business in new life insurance perhaps only reflected loss of confidence in security markets.

Some of the reports seemed extremely vague. Under "Iron and Steel Industries" it was revealed that "production of furnaces and mills has kept closely in line with current demands." Also slightly irrelevant seemed the statement that whereas production has been at 74% of capacity, in 1927 this would have been 80%. On the other hand, the news that the telegraph and cable business showed upturns in April, the former now running better than a year ago, was just as decidedly bullish as the report that hardware payrolls in March were off 20% from a year ago was bearish.

Following its outline the Survey reported on international conditions as of April 15, announced: "Briefly, world business with a few exceptions has not been in a prosperous condition during the winter months, but now appears to be on the mend, as underlying economic factors show slow but steady improvement"--phrases redundant of the reports on U. S. business.

* Earnings statements released last week were in many cases much worse than expected, although a few companies fared better than in the first quarter of 1929. Important reports:

Increases: (000's omitted)

1930 1929

American Metal Co. . . . . . . . . . . 773 766

American Bank Note. . . . . . . . . 722 691

American Safety Razor. . . . . . . 268 259

Bethlehem Steel . . . . . . . . . . . . . 10,077 9,045

Caterpillar Tractor . . . . . . . . . . . 3,365 2,197

Commonwealth & Southern. . . . 19,060 19,036

Hershey Chocolate . . . . . . . . . . 2,320 2,265

Kelvinator . . . . . . . . . . . . . . . . . . 883 273

Transcontinental Oil . . . . . . . . . 1,173 527

United Biscuit . . . . . . . . . . . . . . . 485 399

Decreases: (000's omitted)

Briggs Body . . . . . . . . . . . . . . . . 760 1,404

Chicago Pneumatic Tool. . . . . . 174 325

Commercial Solvents . . . . . . . . 750 844

Congress Cigar . . . . . . . . . . . . . 267 456

Corn Products . . . . . . . . . . . . . . 3,152 3,435

General Motors . . . . . . . . . . . . . 44,968 61,910

Gulf States Steel . . . . . . . . . . . . 94 354

Hercules Powder . . . . . . . . . . . 731 939

Independent Oil & Gas . . . . . . . 743 2,018

International Silver . . . . . . . . . . 168 268

Island Creek Coal . . . . . . . . . . . 589 818

Magma Copper . . . . . . . . . . . . . . 388 992

Mullins (Accessories) . . . . . . . . 29Loss 164

National Biscuit . . . . . . . . . . . . . . 4,665 4,709

National Cash Register . . . . . . . 912 1,879

Packard . . . . . . . . . . . . . . . . . . . . . 2,654 7,114

Stewart Warner. . . . . . . . . . . . . . 656 2,054

Virginia Iron, Coal & Coke . . . 41 Loss 33

Westinghouse . . . . . . . . . . . . . 4,546 5,631

This file is automatically generated by a robot program, so reader's discretion is required.