The Washington herald., 1918-07-02
FLOURANDCO
TO.
I sBECASTIGATED.
plans by Fuel and Food
Heads Impose Severe
Penalty.

sharp regulation of pronteering
IN Hour and coal are announced by
the Food and Fuel administrations.
The -four penalties have been In ef-
feet for several weeks. while the
Fuel Administration IL working on
a new plan for price-hxing. which.
IL adopted will result In q saving OF
1870, ,o00. 900 to the people OF the
country next year.
Announcement of the plans fol-
lows the sensational report of the
Federal Trade Commission last
week, but in neither case Is It the
result of that. both administrations
point out The food plan was al
ready In effect. and the fuel plan
was being worked out
Both administrations also point
out that their activities are not un-
der IRE in the Commissions report
The Food Administration shows that
the food profiteering exposed was
all during the period before the ad-
ministration was created, while the
Fuel Administration points out that,
in its creation. it was provided that
the then existing contracts should
not be abrogated. and that some of
those ran until this April. Tremen-
dous profits have been made on
these.
Food Administrator Hoover has
warned the milling trade that when
he allotted a . cent profit on each
barrel Of flour. he meant It. The first
fiscal year ended yesterday for oper-
ating and financial reports to the ad-
ninistrator by all mills. II these re-
ports show any excess over the IS
cents profit. the profiteering mill will
be forced to sell to the government
flour at 81 a barrel. about q tenth to
q twelfth of the market. until these
sales average down its profits on its
entire output for the fiscal year to the
5 cents set
II any mill refuses to sell the gov
ernment on these terms, its license
may be revoked. and It may be closed.
The administration does not want to
reduce the milling output Of the coun-
try. but 1t Is firm to halt profiteering.
Reports of mine operations and costs
for a complete year will be in the
hands Of the Fuel Administrator
shortly after August l. He Ia not en-
tirely satisfied with the bulk price as
fixed by the administration now. 1t
leaves a wide margin Of profit to the
big miner who operates cheaply and
efficiently, while the miner who has
not improved machinery and operates
with high costs may be forced to close
his mine. because he can make no
profit on the price allowed. though it
is entirely fair to the average Of the
producers.
Garfield regards production as the
matter of first Importance and the
lowest possible cost to the people the
second At present the Government
can skim OF the excess profits by an
excess profits tax, but the man who
cannot operate within the fixed price
is driven out Of business.
Garfield IL considering a plan Of
having the Government take over the
entire coal production OF the country,
allowing the mine operators cost plus
a reasonable profit. then pooling the
output. averaging Its cost to the Gov
ernment and selling 1t at a uniform
price. considering hailroad costs. etc.
He will make no recommendation
along this line until after August 1.
and 1t may be several months before
he has completely analyzed the cost
figures and is ready to give the Pres
iident his conclusions.
Both administrations are having
trouble with the operators and millers,
who are seeking to include their ex-
cess profits tax as part Of their oper-
ating costs. In both instances the ad-
ministrations are refusing to allow this
claim.