June, 1931 



THE I. A. A. RECORD 



Page Seven 



Ob 



nervations 



MANY a shot has been taken at the 

 business and industrial leadership 

 of the country since the depression and 

 widespread unemployment set in more 

 than a year ago. Prominent men in 

 business as well as public life have 

 joined in pointing the finger of shame 

 at industrial captains who have turned 

 thousands away from their factories 

 and workshops to swell the ranks of the 

 jobless/.';'.- ■.;•'■:' .;';"'' ::>:'■,. v."',v''' '•^■7^,''''''■■■^' ■' . ■.;..' 



Without arguing the merits of either 

 side in the controversy over who or 

 what is responsible for the current hard 

 times, it may be interesting to hear 

 what one stout defender of the manu- 

 facturer, George Roberts, economist for 

 the National City Bank, has to say 

 about it. 



along against severe competition trying 

 to make a living themselves while risk- 

 ing their capital. 



"Unemployment undoubtedly pre- 

 sents a problem, but it cannot be 

 solved by any policy that would be 

 disastrous to the industries," he con- 

 tinues. "If the latter are to assume the 

 responsibility of keeping labor always 

 employed they will have to find means 

 of doing so by obtaining higher prices 

 for their products or paying lower 

 wages to their employees. The risk of 

 such an obligation would be a serious 

 one, and could not be borne by the 

 employers alone. ... 



Leeper Elected President 

 ^^ National Fruit Exchange 



Referring to the federal income tax 

 returns from corporations for the high- 

 ly prosperous year of 1929, Mr. Roberts 

 shows that 40 per cent of the com- 

 panies that year reported deficits while 

 the other 80 per cent reported average 

 net earnings of 8.92 per cent. 

 ■ "If the returns were consolidated to 

 show net earnings for all the active 

 companies, the result would be $3,667,- 

 3 54,123 of profits upon a gross income 

 of $60,960,346,678, or 6 per cent on 

 the value volume. This is scarcely 

 above a normal merchandising profit on 

 turnover, whereas manufacturing is 

 subject to greater risks than merchan- 

 dising, by reason of fixed investment 

 in addition to the trading risks," de- 

 clares Mr. Roberts. 



"The old saying about the wisdom 

 of saving for a 'rainy day* is evidence 

 that life always has been subject to ups 

 and downs and emergencies against 

 which the prudent accumulate reserves. 

 If everybody accumulated reserves and 

 avoided indebtedness except for tem- 

 porary needs, the whole problem of 

 crises and depressions would practically 

 disappear." 



A. B. Leeper, director of fruit and 

 vegetable marketing for the I. A. A., 

 was recently chosen 

 president of the Na- 

 tional Fruit and 

 Vegetable Exchange. 

 This is the new na- 

 tion-wide co-opera- 

 tive sales agency re- 

 cently set up with 

 the aid of the Fed- 

 eral Farm Board. 



The members of 

 the Board of Direc- 

 tors represent prom- 

 inent co-operatives 

 between the Rocky Mountains and the 

 Atlantic coast. ^ , / x • v '^-^ > 



The Exchange will not handle citrus 

 fruits since the citrus fruit growers are 

 already well organized. 



A. B. Leeper 



Our own observations among friends 

 and acquaintances, both in the city and 

 the country, lead us to believe that 

 there is much truth in Economist Rob- 

 erts' assertions. Keeping up with the 

 Joneses, or downright "foreflushing," 

 are ingrained American habits. Many 

 people live up to or beyond their means 

 ^most of the time. When adversity tem- 

 porarily hits the family there is noth- 

 ing in the "kitty" to pay the grocer 

 and the landlord. 



'. \ "These figures for the net earnings of 

 manufacturing corporations not only 

 disprove the theory that as a class they 

 make large profits, but show the fallacy 

 of the declaration of the Washington 

 Conference that American industry has 

 'failed in this crisis as in every other 

 crisis to assume responsibility for keep- 

 ing wage-earners employed and industry 

 at work.' Since 40 per cent of these 

 corporations had net deficits in 1929, it 

 may be assumed that another important 

 percentage made only moderate net 

 earnings and that no more than a small 

 minority would be able for any length 

 of time to continue production of goods 

 which could not be sold at a profit. . . ." 



High wages, salaries and bonuses paid 

 by many a firm in 1928 and 1929 went 

 into high-priced automobiles, extrava- 

 gant living and stock market specula- 

 tions instead of in gilt edge bonds for 

 the inevitable rainy day. It is doubt- 

 ful if any economic or social system 

 can be devised that will spare us from 

 the consequences of indiscreet and im- 

 moderate living. — E. G. T. 



Mr. Roberts then turns to a report 

 of manufacturing in New York state 

 which reveals that 75 per cent of the 

 70,000 factories in that commonwealth 

 are small businesses which employ fewer 

 than 50 persons each; that these small 

 manufacturers are busy men struggling 



Cause of Farm Depression 



Adjusting production to market de- 

 mand, reducing costs of production, 

 and eliminating submarginal land are 

 three lines of action recommended by 

 the U. S. D. A. in a recent bulletin 

 "Land Utilization and the Farm Prob- 

 lem." 



Among the elements cited as contrib- 

 uting to the present agricultural situa- 

 tion are: changes in agricultural pro- 

 duction, crop land, and farm labor; in- 

 crease in number of tractors and de- 

 crease in numbers of horses and mules; 

 and changes in consumption of food 

 products. 



^^^ Speak at Manhattan 



^^r^ REDIT Problems Resulting from 

 v^ the Handling of Side Lines in 

 Local Co-operatives" was the subject of 

 an address prepared by Secretary George 

 E. Metzger for delivery at the Ameri- 

 can Institute of Co-operation at Man- 

 hattan, Kansas, on June 10. Mr. Metz- 

 ger was unable to attend. His paper w - 5 

 read by Frank Gougler, director of pro- 

 duce marketing. '". 



Mr. Gougler addressed the conference 

 on the subject, "Colle6tive Bargaining 

 of Butterfat," on June 9. 



Other Illinois speakers during the 

 week were A. D. Lynch of Sanitary 

 Milk Producers, St. Louis; Don Geyer 

 of the Pure Milk Association, Chicago; 

 P. O. Wilson and Chas. A. Stewart of the 

 National Livestock Marketing Associa- 

 tion; and C. E. Huff, Geo. S. Milnor 

 and Bill Stahl of the Farmers National 

 Grain Corporation. 



DeKalb Signs 1,000 



In Two Days 



More than 1,000 members were 

 signed in the DeKalb County Farm 

 Bureau in two days, reports Farm Ad- 

 viser R. N. Rasmusen. Three town- 

 ships, Clinton, Paw Paw and Kingston, 

 increased their memberships over that 

 of three years ago. 



Clinton township topped all others 

 when out of 143 men interviewed 107 

 became members. Volunteer solicitors, 

 Edgar E. Hippie and T. F. Sawyer, op- 

 erating in Clinton township, signed 42 

 of the 48 men they interviewed. 



