Show MONEY C MARKETS M RI ETS i By James McMullin Th The Th Telegram Exclusive Observer Observe Along Wall Street NEW YORK New YORI-New New York Insiders in insiders In- In siders interpret the huge new government spending program asa asa as asa a triumph for Tom Corcoran and Ben Cohen For months Tommy and Benny have been urging F. F D. D R. R to shoot the works They scoffed at the budget balancing ideas of Jones and Kennedy They pooh proposals for friendly overtures to business contending that a reconciliation between the new deal and private industry was impossible They argued that businessmen would take no stock in any olive branch the president might extend so what was the use Their recipe for curbing the recession and winning this falls fall's election was the old familiar one of lavish federal federal federal fed fed- eral largesse interspersed with snappy cracks at princes of privilege Mr Roosevelt has been teetering teetering teetering teeter teeter- ing on the fence between his right and left wing advisers since late last year It looks as if the star dust twins have finally Induced induced in induced In- In him to jump off oft on their side Apart from the spending financial leaders anticipate a trend to the left in White House policies and an end to any shadow of a truce with big business This dev development e I op m e n t probably dooms any hope there might have been for an early and peaceful settlement of the controversy between between between be be- tween the government and the private utilities Some of Mr Roosevelt's counselors counselors counselors coun coun- notably Chairman William O. O Douglas of the securities and exchange commission and Chairman Chairman Chairman Chair Chair- man Jesse Jones of the R F C have been trying hard to promote a final adjustment of utility relations relations relations rela rela- in the Tennessee valley Their point has been that this would benefit the administration by unloosing power company purse strings for overdue construction construction construction con con- to the tune of more than thana a billion dollars thus priming the pump through normal business business business busi busi- ness channels But the president has evidently reached the conclusion conclusion conclusion sion that theres there's no percentage in this He has intimated to recent visitors that even if an agreement agreement agreement agree agree- ment were reached now it would be too late for utility spending to todo todo todo do any good this year He has to have results before November Corcoran and Cohen had able assistance in persuading the president from W er P er A-er Harry Hopkins Jerome Frank of the S SEC SE SE E EC C and Economist Leon Hen Hen- derson Only one practical railroader was present at Mr Roosevelt's original conference on railroad problems problems Cary Gary Gray of Union Pacific He batted up a suggestion suggestion suggestion tion which socked financial men more than anything the new dealers dealers dealers deal deal- ers have proposed Mr Grays Gray's idea was a formal moratorium on all railroad debt for two years years interest interest payments as well as maturities He argued that the roads would have a chance to pull out of the hole if they could forget their fixed charges for that period That might be true but what it would do to rail bonds and the institutions and investors who own them in the meantime would be just too bad Fortunately for New Yorks York's peace of mind this inspiration was ostensibly squelched Officials realized it would require reaching far-reaching preparation preparation prep prep- if adopted Federal Communications Commissioner Commissioner Com Corn missioner Paul Walkers Walker's report to congress on American Telephone stated that the corporation could cut its rates by 25 per cent without without without with with- out affecting earnings This isn't quite as cockeyed as it sounds Informed financial sources while they do not agree with Mr Walkers Walker's Walkers Walker's Walkers Walker's Walk Walk- ers er's contention concede that A. A T. T Ts T.'s depreciation policy has more to do with the case than the public realizes American Telephone got to be a practical monopoly by the gradual gradual gradual grad grad- ual acquisition over a period of years of many small companies and properties Inevitably some of these properties were overvalued overvalued overvalued over over- valued in the purchase price The A. A T. T T. T management wisely charged off very large sums for depreciation thus squeezing the water out of these write ups much more rapidly than is usually the case As a result telephone properties are more realistically valued today than those of ot almost any other utility But now the write offs are pretty well completed It is possible possible possible pos pos- sible that the corporation could lower its depreciation rate without without with with- out damage to sound accounting II principles If so present earnings could be maintained on cheaper I rates to customers I Oklahoma has an exceptionally I high proportion of voters over 60 i years of age They are conscious of ot their power I Governor E. E W. W Marland Is running running running run run- ning in the Democratic senatorial primary against incumbent Elmer Thomas He has been trying to persuade Dr H. H G. G Bennett president president dent of Oklahoma Agricultural 1 and Mechanical college to team up with him as a candidate fo for t governor A group of old age 1 pension advocates called on Dr Bennett and told him they could 1 guarantee to put him over if he would come out for 50 monthly pensions The college president has shown no great interest to date But the 1 significant point is that the old od age vote in that state is organIzed organ organ Ill to shop for candidates and HI I I does not hesitate to do so Copyright 1938 1935 for The Tel Telegram gram Ii |