Norwich bulletin., 1919-04-11
Railroad Director
Refuses Steel Prices
Chairman PEEK of Industrial
Board to Submit the Matter
to President Wilson.

TO PRESIDENT Wilson.
Washington, April 1o.-Acceptance
by the railroad administration of the
steel prices agreed upon by the repre-
sentauves of the industry and the de-
partment of commences industrial
board was definitely and formally re-
fused today by. Director General Hines
Ihe refusal was announced after Mr.
Hines had conferred with Chairman
| George N. Peek of the board.
The director generals decision, an
nounced as final, was based on the
grounds that the prices as agreed up
on are too high; that the industrial
board is without power to impose them
upon the railroad administration and
| that the return of all prices to normal
Will be seriously retarded by the ap-
proval by government purchasing
| agencies of prices which it deems ex-
| cesSive."
| Chairman Peek of the Industrial
board, let it known after his confer
ence with Director General Hines that
he would present the questions involv-
ed in the controversy with the railroad
administration to President Wilson
and would ask the president, to sus.
tain the action of the board
After repeated consideration of ths
| oNCCA eailA iioll pI1CSS pfopOSet Dy liz
| industrial board" said a statement by
| MIR. Hines, Il am still of opinion tha
those prices are too high and there.
| fore that the railroad administration
cannot approve them as being reason.
able prices.
ITO the extent that the railroad ad.
ministra ton finds it necessary to max,
| purchases it will continue to max,
them on the best terms obtainable b,
fair and just methods, with full recog
milton of the principle that a govern
ment agency with large purchasin,
power must be particularly careful no
even TO attempt action which coult
be regarded as oppressive.
THE object of the railroad admin
iStration throughout has been to Oh
tain fair and reasonable price level
Il has never contemplated that i
should get a lower price than tn
general public.
IF the industrial board can assist il
bringing about levels of prices a
which the railroad administration vii
feel justified in buying its co-opera
ton will be welcomed.
I'm the newspaper discussions o
this matter the suggestion has a
times occurred that the principal thin
is to establish some price which tn
government will endorse to the en-
that the public will begin buying a
that price and that the mere estab
lishment of a price for this purpos
is more important than the intrinsi
reasonableness of the price itself.
cannot agree with this principle.
am keenly alive to the great desira
bility OF stimulating business in ever
reasonable way, but L believe in tn
; long run that the endorsement by
government purchasing agency of a
excessive price level would be harm
full to the public interest and woui
: not bring about confidence, and tha
the end sought to be obtained wi
come only by reachingra price lew
which the public itself shall conside
to be reasonable.
Il believe one Of the greatest prob
lens that confronts this country j
that of getting prices back to a rea
! sonable level and | believe progres
5 in that direction will be seriously re
! tarded by the approval by a govern
mental purchasing agency of price
which it deems excessive
7 RecOunting the history of the nego
tiations, Mr.. Hines stated that hi
3 counsellorS, John Shelton William
8 Robert S. Lovett and Henry Walter
' members of the railroad administra
, tons advisory committee on purchas
es. T. c. Powell, the railroad admin
: istration's representative in the negc
tiations, Henry 3. Spencer, directc
OF the railroad administrations di
- vision of purchases, and LnterStat
; Commissioner McChord had agree
unanimously that the industris
jboard's steel prices were too high. TIL
; advisers opinion was again reiterate
; after conferences with New York yes
; terday with representatives of til
steel industry, Mr.. Hines said
Chairman Peek of the board tc
night issued a statement in part as TO
5 lows:
q The director general of railroad
has today given to the press a state
ment definitely refusing to accept tt
= prices on steel approved by the il
!. dustrial board as representing ia
n pprices for public buying. TIL
o statement discloses what has alread
n been developed in repeated conferens
n es with the railroad administratio
n that the reasons for the director ger
erals refusals are, first that he deni.
the right of the Industrial board to III
4 pose a price on the railroad admin:
tration, and second. that he is of II
opinion that the prices are too higf
Inc pubic nuSL D0 informed
the magnitude of the solemn respoI
sibility assumed by the director ger
eral in this important decision.
THE industrial board was formed
carry out a perfectly defined indu!
trial policy to which the government
represented by the president, the cal
met and the director general, was fu
| ly committed.
ITO complete success of this pla
however, there was one absolute e.
sential, that the governmental d,
partrents should express the conf
dence of the government in the ex,
cution of this most important polio
"At this late date in the execution
the plan this important essential
its success has been denied by the d
! rector general of railroads, and !
that denial the labor OF the industri
board is set at naught and the go'
| ernment is exhibited as setting up
industrial policy with one hand al
destroying it with the other"