The sun. [volume] (New York [N.Y.]) 1916-1920, 1917-06-21
WILSON URGED
TO SEIZE PLANTS
AND FIX PRICES
Daniels FavOrs Drastic Ac-
tiOn to Cut Cost in War
Supplies. :
BUSINESS MEN ALARMED
Manufacturers Timidity May
Retard Work on Big U. 8.
Air Fleet.

WASHINGTON, June 20. A powerful
element among the official advisers OF
the President is urging more drastic ac-
tion than has been taken with regard to
the Governments policy toward the large \
business interests OF the country In the
matter of prices for war supplies. This
element is believed to be In favor Of the
Government proceeding vigorously to de-
termine the cost of supplies such as
coal. copper. steel. cement and platinum
in order to arrive at proper cost plus
profit based upon which 1t is proposed
the Government shall secure all of It's
war supplies.
The radicals among this element would
even have the Government assume vir-
tually the control Of many of the larger
4 industrial plants. They are understood
to take the view that only by such
measures can the Government maintain
control OF the cost of production in Or
der to fix the proper basis for prices.
| This element is known to be at work
preparing figures calculated to support
their arguments and is laying plans for
a campaign which It apparently be-
lieves will have popular support once 1t
Is launched. Rumors are aioat that
this campaign is shortly to be given q
great impetus. Some OF the large busi-
ness interests are believed to be cog
INFANT OF what is going on. Whether
they have planned any move to meet It
or not has not been established.
Daniels supports Radicals.
There is difference Of opinion among
the Presidents advisers as to how far
the Government should go. Secretary
Daniels Is known to belong to the radi-
| ral eienppt ca % ha tn
be rather cautiously feeling his way. In
all that he has done thus far ne has been
supported by powerful friends Of the
President. some of whom are in favor
Of more drastic measures In the drec-
ton OF Government control than he has
attempted.
The cooperation between the Govern
ment and producers Of raw and finished
materials needed by the Government at
tempted in the first few weeks of the
war has already given way to a policy
under which the question of prices is
taken virtually out Of the hands of firms
doing business with the Government
That all future transactions are to be
on the so-called cost plus profit basis.
with the Government ascertaining and
possibly scaling down the cost appears
to be certain. The power of the dow
ernment to force business firms to sub
nit to Its terms or have their plants
dents advisers as being without ques-
tion under the laws already passed,
While the business interests Of the
country have not yet been heard from
generally on this new policy there is
evident n growing note of resentment
here, particularly among some of the
business men associated with the Coun-
Gil of National Defence.
The announcement to-day by Secre-
tary Daniels that he will have the Fed
eral Trade Commission ascertain the
production costs of coal. OIL copper.
cement and iron ore as basis for Gov
ernment prices has not instilled conf
dsnce.
."COxt Plus" Plan Approved.
The phrase "cost plus reasonable
profit" does not work out so simply as
II seems, 1t is explained. The question
OF determining what is to count as cost
is a problem which will occupy experts
for months and is regarded as certain
to lead to infinite differences Of opinion.
Furthermore it is hinted the Govern
ment will have to investigate costs in
particular plants rather than for an in
dustry as a whole. AS the Government
and not the business interests are to
. estimate this cost there is a very gem
eral fear of unfairness, particularly now
, that it is known that Mr.. Daniels Will
,
high The effort of Secretary Daniels
to build his battle cruisers on cost plus
percentage basis caused much confu-
sion. After months of investigation
!, little more was known about cost than
at the beginning
The most dangerous feature OF the
, policy of regarding all business interests
with suspicion, in the opinion OF many
, here is that il completely checks just the
, sort OF endeavor which the Government
needs at this period. In the question OF
airplane motors, it is pointed out. 1t
would be we'll worth the Governments
while to encourage manufacturers to eX-
pertinent and If need be spend millions
toward the procurement of the best type
of motor. Many manufacturers are
ready to devote all their work to this
, task, But they now are beginning 10
fear that the only interest Of the officials
acting under Mr.. Danielss policy will be
| to "see that money is saved
. Price Increase Ccnsured.
S In discussing the matter OF prices to-
day Secretary Daniels made II plain that
n he would not pay for supplies except on
D "A basis of cost of production plus "rea-
( sonahle profit"
e There is no justification for tre-
4 mendous increase in prices of basic ma
n terials." he said THE Almighty put
these things in the ground and the only
additional cost over normal times is get
( ting them out Congress has appropri-
/ ated so many millions for the navy, ex-
n pecting II to buy 80 much of these sup
Y plies. II the price is doubled it means
= that we will get only half as much as
was expected from given sum and will
n require that much more money from the
= Treasury.
a Under the law the President Is au-
thorized to fix n reasonable, price for
:, what is needed for the navy. There Is
, no disposition whatever to cause any
= hardship to the producers. We are per-
;, fectly willing and intend to pay them
- fair, even liberal profit but we will not
pay exorbitant prices such as are being
. quoted in some instances"
a COAL BARGE GRAFT.