Mockery?

H. K. Ferguson Co. of New York and Cleveland has built plants for such firms as General Foods, Pittsburgh Plate Glass, General Electric, U. S. Gypsum, Armstrong Cork. When new building dried up six months ago it sent out 2,200 questionnaires to executives in all types of industry except railways and utilities. Last week it announced that 275 firms, of which only 25 were big, had admitted holding up nearly $200,000,000 worth of industrial construction. Reasons given: 72% blamed the undistributed profits tax, most of the rest blamed uncertainty over Government policies, a negligible few feared labor troubles.

Last year the U. S. steel industry spent $320,000,000 for plants and equipment. Last week the American Iron & Steel Institute estimated that the total for 1938 will be only $165,000,000. This figure seemed small when U. S. Steel Corp. last week announced that it was borrowing $50,000,000 in cash from ten New York, Pittsburgh and Chicago banks for construction purposes. But this fat sum was only to complete expansion already under way. The first new financing by "Big Steel" since 1929, it was made necessary by heavy payments for arrearage on preferred stock last year and by the obligation imposed by the undistributed profits tax to distribute most of Big Steel's $94,900,000 1937 profits in dividends.

Simultaneously, it was in no optimistic mood that 50 underwriters headed by Bonbright & Co. last week offered a $67,000,000 batch of bonds for Appalachian Electric Power Co.. all for refunding purposes. Before nightfall, however, all had been bought, with prices occasionally going to a premium. The New York Herald Tribune trumpeted: "The distribution was exceptionally sound and it makes a mockery of charges that a capital strike prevails."

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