Word: marketing
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Dates: during 1940-1949
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...drop was partly due to seasonal shipments of cattle to market, though they were running lower than at the same time last year. When prices started down, some farmers stopped shipping, hoping that a shorter supply would raise prices. Nevertheless, except for hogs, prices stayed down. The Department of Agriculture, which mortally hates and fears a fall in farm income, predicted that the lower prices would not last. Many another expert thought differently. Mark W. Pickell, executive secretary of the Corn Belt Livestock Feeders Association, said that prices would be "lower in November and December," even lower next year. Whoever...
Though it all sounded like so much stratospheric financial gobbledygook, it was far more than that. The pegging of the market was a potent inflationary force, and ill-advised tinkering with it might bring the whole boom tumbling down...
Drop the Peg. Until recently there has been little complaint about pegging of Government bonds. Bondholders liked the guaranteed market. But as commercial interest rates edged upwards (Reynolds Tobacco Co. had to promise 4½% last week on a $26 million issue of preferred stock, compared to 3.6% on an issue in mid-1945), big bondholders, notably insurance companies, began to unload on FRB. They could put their money in better paying private issues or out to loan. Had the unloading reached such a point that FRB should stop supporting the market...
...thought so was the Equitable Life Assurance Society's Thomas I. Parkinson. Said Parkinson: "Neither banks nor life-insurance companies have any right to expect a guaranteed buyer." Parkinson thought that FRB should let the bonds find their own level in a free market. His argument was that lower bond prices meant higher yields, and higher yields on Treasuries would in turn push up the commercial interest rate. Making credit more expensive, thought Parkinson, would help nip inflation...
What had dried up the money market? Price thought he knew: double taxation of dividends and high income taxes which made stocks no longer worth the risk or left stockholders little cash to invest. Price's solution: wipe out the double tax on dividends, limit personal income taxes to a maximum of 50%. Said Price: "We need an incentive program for the forgotten man-the stockholder ... If he is to risk his capital he must be given a wage increase...