May, 1928 ILVDUSTRIAL S&VD ENGINEERIXG CHEAVISTRY 453

From Bad to Worse HEN our views concerning the Norris bill to put the w Government in business were set down in our issue of

April 1, the latest congressional monstrosity had not been prepared for the waiting world. It has since made its ap- pearance under the name of the RIorin bill (we resist the temptation to give it the obviously appropriate spelling), which has been reported out by the Committee on Military Affairs of the House of Representatives. It is obviously an effort on the part of the House to find a ground upon which they can go into conference with the Senate, and in these political days we may have to depend upon the courage of the President to veto this or some equally bad measure. With the American Farm Bureau Federation representatives putting forth Herculean efforts to have Muscle Shoals operated, re- gardless of cost and regardless of science, in an effort to make good their promise to the farmers, practically anything can happen.

We cannot go into great detail here, for those particularly interested will want to read the entire bill, To make sure of success, it stipulates that the board of directors, under whom this ten-million-dollar government corporation shall function, shall be composed of men having no financial in- terest in any public utility corporation distributing or selling power to the public, or any corporation engaged in the manu- facture, etc., of fertilizers or any ingredients thereof, or any interest in a business that might be adversely affected by the success of the Muscle Shoals project. Furthermore, the board is required to profess a belief in the feasibility and wisdom of carrying out the provisions of the bill, which reminds us of the declarations required by some fundamentalist colleges of those who may be employed for the teaching of science in their institutions.

In addition to putting the Government in the business of manufacturing, distributing, and selling all sorts of fertilizers or any essential ingredients, the bill contemplates including the by-product business as well. To guarantee success, the board is empowered to help itself to any government employee of any rank, and the President may direct those so chosen to render all possible assistance. For five years the products are to be sold a t cost, after which time 4 per cent is to be earned, but this is to be reckoned only on money paid in as capital stock with no consideration for the many millions already invested. Some return from the sale of excess power is expected, and this power is to be sold without any control by the Federal Power Commission in competition with private companies that are so limited. Under the bill the existing cyanamide plant is to be modernized, but the board is empowered to employ any other process that it sees fit. I n addition to offering fertilizer a t cost during the first five- year period, 5 per cent of the total product may be donated for experimental, educational, and introductory purposes and if, a t the end of that period, more than 25 per cent of the product of the plant remains on hand unsold, then an ad- ditional 10 per cent may be given away.

As we read the bill, the above provisions look to the cre- ation of a government monopoly which, under the influences that would doubtless exist should the bill become a law, could be managed so as to destroy t o a great extent the fertilizer business of this country. The features cited above are bad enough, but Section 19 sets forth that “the corporation as an instrumentality and agency of the Government of the United States for the purpose of executing its constitutional powers, shall have access to the Patent Office of the United States for the purpose of studying, ascertaining, and copying all methods, formulae, and scientific information,(not including access to pending applications for patents) necessary to enable the corporation to use and employ the most efficacious and

economical process for the production of commercial fer- tilizers, or any essential ingredient thereof.”

It then goes on t o state that if a patentee feels that his rights have been invaded through this clever scheme of helping one’s self to all patent information, he may proceed against the United States in the Court of Claims for the re- covery of reasonable compensation. In other words, if you hold a patent which the Government wishes to employ in its effort to make the socialistic experiment a t Muscle Shoals a success, it would help itself, and if you did not like it you would be offered the cold comfort of the expense and an- noyance of going to court and filing proceedings in the Court of Claims for “reasonable compensation.”

In reporting the bill the committee repeats the majority report of the President’s Muscle Shoals Commission of 1925. Omission of the minority report, prepared by the only en- gineers on the Commission, is the course followed to avoid any embarrassment its reprinting might occasion the committee.

Such a bill as the Morin iMuscle Shoals bill would open the way for the Government to engage directly and on a large scale in various sorts of business, would lead to the un- limited expenditure of federal funds, and make certain the destruction of private industry. Should anything approach- ing it be agreed upon by this Congress, appeals to the wisdom of the President and to the fearlessness which he has shown on other occasions must be made.

This Year’s Business T H E R E is a tradition that general business in presidential

years is inclined to run much below the normal level. The mere existence of such a belief exerts an influence on business trends, and it is well known that trade is very sen- sitive to mass psychology.

A recent investigation by the National Bureau of Economic Research discloses that during the period 1790 to 1925 the United States had experienced on the average three years of prosperity for each two years of depression-a higher average of prosperous years than has been enjoyed by any other great nation. Indeed, during the last fifty years the ratio in favor of prosperity has been somewhat greater than the three-to- two average.

A study of the factors believed to influence and be a key to prosperity fails to bear out the tradition. There appears to be no ground for the belief that the political cycle in any way controls the business cycle. Where a year of recession in business happens to fall in a presidential year, this is set down by students of economics as a mere coincidence. It can be shown that oftentimes where business has been subnormal during an election year the same conditions exist in other parts of the world, where our elections, no matter how im- portant, could have no influence.

These statements are based upon studies made of the data on stock fluctuations, on the effect of tariff as a campaign issue, world conditions, depressions which have been experi- enced in the past, and other indices of prosperity, including the influence of the political complexion of Congress upon the business cycle.

In the present presidential year, with no prospect of a third party movement or of a major party division on funda- mental economic issues, there is no reason to expect any profound influence of politics upon business. No candidate or party is advocating anything particularly dangerous, and business is justified in placing great hopes rather than fears in certain candidates.

All factors seem to indicate a continuation of prosperity, and the sooner we forget the tradition that business must be poor in presidential years, the better the opportunity to keep it above normal.