Evening star. [volume] (Washington, D.C.) 1854-1972, 1918-10-27

gone In the present war with Ger
! many the government
| Industrial has sought to erect
| 49,. p readjustment OF In
hauon1ng. dustry- by. following
the plan Of voluntary rationing with
such aid as could be given by d.
nancial control and curtailment OF
banking credit. The inadequacy OF
voluntary methods in the face OF our
Irising national requirements has,
however. necessitated recourse to
more direct and authoritatiye con-
troll
Such a program of control is, now
in progress Of development at the
hands Of the War Industries Board
the various government bodies en-
gagged in the reorganization OF Ia
Dor, and the provost marshal gen.
erals Office. which has issued IN
lstructions with reference to the ap-
plication of the man power DILL.
The program of the, War Industries
Board Is based upon comprenenslVe
application of the principle OF prior
ity. The system Of priorities thus
far announced, with reference to the
apportionment of fuel, material Ia
Dor and transportation among diff
ferent enterprises, constitutes an Ell
fective beginning of a system f0r the
dent in message forecast what is
now being done, saying at the time,
with reference to our war program:
ct will involve the organization ana
mobilization Of all the material re-
materials of war and serve the incl
dental needs of the nation in the
most abundant and yet the most
economical and efficient way posi-
ble."
officials of the Federal Reserve
| the object now aimed at by these
government bodies has long been re-
garded as essential by the board,
which has from time to time an
nounced either officially or through
its members the necessity OF care
| full adaptation of business to war re-
quirements.
So far as lay within its power the
Federal Reserve Board. so the officials
point out, has attempted to pave the
way for adequate industrial organ1za.
ton by urging a program which 1t
has DESIGNATED as conservation and
curtailment of credit. The problem.
however, is so broad and far-reaching
in its connections that it has always
been obvious that control OF credit
could not alone be relied upon to pro-
duce the necessary results. In sub
stance, the new plan amounts to the
regulation of supply of goods for the
general consumption by determining
conditions under which their manu-
facture may proceed. This is much
more direct and effective and power
full means of control than any that
could have been ,eNerted through the
Withholding of credit from unessential
and unnecessary enterprises.
Thus is first the production of those
things needed for the war to be slim
consumption of those things which the
community in war time does not need
| for its health. efficiency and happiness
Ito be restricted. Necessary industries
lare to have the first claim on the pro-
ductive power of the country; less es-
sential industries will be limited by
what is left. The consumer will be
pra ctically rationed by being kept
from the full use Of his spending
power, and his savings Will therefore
be made available for the purchase OF
government bonds.
The voluntary system OF rationfng
or controlling credit was. moreover,
lacking in uniformity, since 1t was
based upon the assumption that prac-
Itically all individuals must rely upon
! the banks for accommodation. Such
lis not the case, inasmuch as there are
many businesses Of an unessential
type whose receipts consist chiefly of
cash and which accordingly pay in
cash. These enterprises are self
financing and hence do not find them
selves obliged to rely upon the banks.
thus leaving an inevitable gap in what
lotherwise might be a uniform system
of oversight. Within the past year or
1.-TWO, officials of the reserve board
point out, the general prosperity of
many classes. due to the payment of
very high wages and the consequent
practice of paying cash for goods, has
RESULTED in enabling many concerns
(which formerly had to rely in part
upon bank loans to finance them
selves to do without such advances, SO
that it is probably true today that
the number of concerns which are not
subject to banking control is very
much greater than at any time in the
past.