The Government's Week

Last week the U. S. Government did the following for and to U. S. Business:

P:. Declared a truce with Wall Street. SEC Chairman William O. Douglas announced in Manhattan: "The day of the crackdown on Wall Street is over. . . . The prosperity of the New York Stock Exchange is not incompatible with the national welfare." As a basis for further reform by the Exchange, Chairman Douglas and acting Exchange President William Martin Jr. drew up a "round table" of Exchange and SEC members to discuss: i) problems of floor administration such as the question of segregation of broker and dealer activities; 2) increasing the amount of bond trading on the floor; 3) commission rate revision; 4) development of odd-lot trading; 5) creation of a depository for customers' securities. These are Chairman Douglas' "five favorite ideas."

P: Worked closer to a truce with the utility industry. First, Mr. Douglas and five utility magnates, headed by James F. Fogarty, president of North American Co., discussed the question of whether the Public Utility Holding Company Act of 1935 needed any revision. Mr. Douglas said no; the magnates said yes. But the two got along well enough for SEC to announce progress toward "a harmonious relationship." Few days later, Chairman Douglas published a statement in The Annalist offering SEC's help in whatever utility recapitalizations may soon be necessary to release $432,000,000 in accumulated unpaid preferred dividends. Finally, though the Senate took Franklin Roosevelt's advice and voted down the suggestion that PWA be prohibited from further building of power plants in competition with private industry, Senator Alben Barkley specifically promised that the "President does not contemplate" any further such competition "unless and until such municipality as may apply for such allocation has in good faith made an offer to purchase the existing private plant. . . ." (see p. 11).

P: Cracked down on 13 major oil companies and eleven of their officers. Accused of illegally fixing the margin of profit for independent jobbers in the "second Madison oil case." these defendants fortnight ago pleaded nolo contendere (TIME, June 6). Last week. Federal Judge Patrick T. Stone of Madison, Wis. fined them a total of $360,000 plus $25,000 costs.

P: Cracked down on the great meat packing house of Swift & Co. Charging "unfair and unjustly discriminatory" methods in the sale and distribution of its products, Secretary of Agriculture Henry A. Wallace issued a cease and desist order. Secretary Wallace's action followed a seven-year look-see into such complaints as that Swift made agreements with numerous concerns to buy meat only from it, that Swift deliberately misled customers about competitors' policies, that Swift manipulated prices in search of a meat monopoly.

P: Charged the Aluminum Company of America with being a "100% monopoly" in the production of virgin aluminum (see col. 3).

P: Reassured the wool industry. Dissident factions in the wool trade recently inspired a special Senate committee to investigate speculation and other phases of wool marketing. Last week the committee's chairman, Senator David I. Walsh of Massachusetts, announced that the committee "has no reason to believe present practices are reprehensible."

P: Cracked down on the farm equipment industry as the Federal Trade Commission sent to Congress the first installment of a long report charging the eight chief farm equipment companies with monopolistic practices. Last year, FTC found, was the most prosperous for farm machinery since the War, partly because prices were kept artificially high even when farm prices fell below normal.

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