The sun., 1917-08-13
KNOTTY PROBLEMS
IN PRICE FIXING
Legislation Gives No Power
for Stipulating Costs to
individuals.
REVENUE BILL IGNORED
War Industries Board Must
Rely on Other Agency for
Information.
Special Dsspa,aA to Tnr sr>

Special DespoicA 10 TINS Sr\
WAsHINGToN. Aug - The dncer. /
tainty prevaliug with regard to the 4
manner in which 'he Administrations .
price fixing policy Is 10 be ar9iled IS not .
likely to be relieved for sNiEo weeks /
Although the new war industries Board I,
has been meeting lately over the prob |
lem, 1t can be said on excellent au-
thority that little progress has been
made in working out any definite plan
which can be applied TO the different in
dustries involved and which will emplo$
the principles the President recently
cnunciated.
The fact that hard headed men like
Chairman Frank A. Scott, Bernard NJ.
Baruch and Judge Lovett, thoroughly
conversant with big business. are hnd-
ing the problem a difficult one is causing
no surprise here. Many Senators who
more or less unwillingly voted for the
food bill and other measures because
the President demanded these powers
knew that in doing 70 they were passing
on a problem that even the most astute
economists would have trouble in solv-
ing.
The price fixing programme is suffer-
ing badly from lack OF coordination,
which as yet nobody has Strengthened
out
Two stumbling Blocks.
There are two serious stumbling
blocks to the Presidents plan for one
price for all. These are:
The apparent lack of any authority In
the legislation passed TO stipulate what
prices American manufacturers shall
charge to customers other than the Gov
ernment. This applies to everything
but coal. The food law plainly gives
the right to the Government not only to
fix the price, but to seize coal and sell
1t to anybody IT sees fit.
The lack OF coordination between the
revenue raisers in Congress and the
executive branch. as a result of which
the revenue bill now before the Senate
which seeks TO raise $2.006, ,O00, 600 has
been drawn up with little or no con-
sideration of the effect of the price fix
ing programme. whereas 1t is held the
two shoulc be interviewer.
The War Industries Board is hopeful
that within the next two weeks 1t will
have before It the report of the Federal
| Trade Commission on the cost OF pro-
ducing at least two commodities, coal
and copper. 1t knows in a general way
already OF the general form the reports
| will take. and therefore its efforts are
! being bent to evolve, by the time 1t has
| these cost figures, some general plan
| which can be applied speedily. But here
| Is where II is running up against the
stumbling blocks.
Informally some pretty strong pro-
| tests have been made in the first place
| against the Government debating TO
business what II shall charge to the
Allies. The board has evidence to show
that there has been some wide difference
between prices that have been charged
the allied buyers and prices charged this
| Government.
Business Men to Suffer.
| 1t is apparent that the relinquishmen:
| of anything but reasonable profit"
| over cost OF production. and that profit
fixed by this Government. is going to
come hard to many business men. They
fear that the Government. inspired by
some OF the radicals here, may deter
mine an altogether unjust scale of profits
and while obliged to accept these with
reference to supplies for this Govern
ment they do not want to see them APP
piled to all the business they may do
for the Allies and for the public. The
contention has been raised that there is
nothing in the law which gives the Gov
ernment the right to FIX prices for the
Allies and so far nobody has been abe
TO dispute this contention except or
|
tuition, admittedly pretty broad when ap
piled to the Allies.
The second stumbling block has beer
brought up In connection with a tenta
tive plan which members OF the War In
dustries Board had drafted This plaI
takes into consideration the fact tina
costs of production will be shown 4
vary much between individual producer
and in different localities. 1t would TAX
as a basis the highest cost OF production
shown and add to this whatever may b-
decided on as a reasonable profit. Th
price 80 derived would be made the pric
. for ALL Naturally this would mean larg
profits for those producers whose cost
] were the lowest, while restricting som
to the exact percentage OF profit fixe
by the Government But this plan theI
calls for a levelling process to be ac
complished by An excess profits tax.
E May Require New Bill.
Unfortunately the revenue bill is no
. predicated on any such arrangement a
this II would seem to require the draft
. ing of an entirely new revenue measur
n to go with the price fixing plan. No
z only does the pending measure fail (
h provide for any such plan In the way c
d taxing profits but II also has been draw
d on the expectation OF getting larR
amounts from taxes on corporation an
x personal incomes many of which woul
d be reduced almost to the vanlshin
e point by the price fixing plan. In othe
r words the plan of the revenue raiser
n and the price fixers doesn't jibe, In Gres
y Britain, II Is pointed out, the Govern
ment worked out both plans together
e The National Chamber Of CommerC
g issued a statement to-day which is vii
II tually an appeal for patience Aft'
IS calling attention to the fact that one
the difficulties is the fact that the boar
> will have only indirect means OF putin
II its decisions into effect, the chamb'
goes on to say
70 Nevertheless, the board will III
a doubtedly accomplish a great deal TT
i problem OF general basis of price {
ID materials and supplies for the Cover
IT ment and for the allies Is already und
consideration and a satisfactory concl
* sion may be anticipated. Also. regar
l. ing priority on Government contract
E. the board may be expected AT an ear
le date TO bring about Improvement in co
ID ditions as they have existed. The o
L portunity is likewise offered for an a
We rangement with all the Allies so tn
their requirements in this country mi
and Contracts Of