Harrisburg telegraph. [volume] (Harrisburg, Pa.) 1879-1948, 1918-12-28
DRICE-FIXING in this country
has served its purpose and

has served ltS purpose anu
should be abandoned at tho
earliest possible date. 1t was a tenn
porary subversion of principles of
free enterprise that only the war
emergency justified. But like press
censorship and other necessary
measures incompatible with the
genius of American institutions, 1t
should be done away with.> A med
icine in war, it would prove pois-
on in peace. There may remain,
for few months, good reasons for a
continuance of price-fiXing in spec
tally scarce foods, as normal food
conditions must await new harvests
in Europe. But permanent price
fixing is no more to be desired than
is q permanent standing army OF
four million men.
Particularly unsound is the form
of price-fiXing for which a demand
has arisen in some quarters-a de-
mand for nothing less than price
fixing designed to keep prices uI
against the inevitable drop that will
come with the return to conditions
of peace. The notion that prices
should be kept up is based on the
fallacy that fall in prices is unde-
sirable. The fact is that a drop in
prices to stable levels is exactly
what is desired. Such stable level!
are prerequisite to satisfactory bus.
mess conditions.
Price-fixing is only one of severa,
, plans suggested by those who are
apprehensive as to the effects OF
falling prices on business. 1t has
= d. fnl
in prices: (a) by price-tiXing; OBJ
by continuance of heavy loans BY
the United States Government tC
our Allies, to be used for reconstruc.
| tion purposes; and (c) by an organ
lied policy of liberal lending on the
| part of American banks.
Fail in Prices Desirable.
Two comments are in order. II
the first place, these policies, while
they might for time retard the
fall in prices, could not prevent it
In the second place, 1t is better by
far to have our prices go down ii
natural course, get through with
! 1t, and then undertake longtime
plans on a sound price basis.
| The efficacy of the measure sug'
gested for preventing a fall in price!
is essentially limited. (a) Price
fixing, for example, has not been de-
vised for holding prices up, but fol
| holding them down. We have de
vised no machinery for holding
prices up except in the case OF
wheat, where the purpose was Il
make the maximum price also {
minimum price, and where~the Gov
ernment has created the Grain Cor
poration with a revolving fund
of 100000 which may be uset
! in purchasing wheat If the marke
price should fall below the mini
mum guarantee. But, in general
our price-fixing mechanism ha'
been adjusted to hold prices down
and the procedure has been essen
TALLY this: As we limited prices
we have restricted consumption, ra
tioning out the supplies. We hav'
! said to producers: Produce al
you possibly can," but we have sale
| to consumers: You may buy a
such and such price, but you ma!
only buy so mucR," and to som'
consumers. we have said, "You ma!
not buy ut ALL"
The Government organization
concerned with handling this prob
lem has been worked out with ;
view to studying the needs of con
sumers, and to rationing the sup
plies In accordance with public pol
icy.
It would, of course. be possible T.
reverse the procedure, and to max
the presnt maximum prizes mini
mum prices. But in that case, w
should have also to reverse our in
structions to producers and con
sumers. We should then say to con
sumers, Buy all you possibly can,
but we should have to say to pro
ducers. Although you may sell a
such and such a price, you mus
restrict production and limit out
put. If you sell at high price yot
can only sell such and sucl
amounts"
Artificial Price Levels.
This procedure is, indeed. not un
familiar in the history of American
business. We have had pools an
1 combinations in the past which, b.
restricting output, have sought {
maintain. prices. But such pool
have not usually been successful
The temptation to expand the mar
ket by breaking the pool agreemen
and cutting prices has always bee
a great one. Moreover, such ar
rangements are clearly contrary t
public policy. Whatever else w
may seek to do in the present emer
gency, we must do nothing whicl
would tend to lessen output. TIL
world is impoverished, goods an
/ supplies of all kinds are short, ant