New-York tribune., 1919-09-27
wartime efficiency to enable

wartime efficiency to enable
monstrous growth Of this kind to de-
stroy individual enterprise Of the
United States on the mere hope that
regulation of the industry will con-
tinuc after the war. BY that time
the competitors will all be dead.
40. There is one prime difficulty
in all regulation of profits in ad-
vance. Such advance regulation
must provide for stimulation in pro-
duction, give an incentive to serve
war aims and must provide suffi-
cicntly wide margins to cover all
possible risk. If the concern regu-
lated is so fortunate as to come
through without mourning losses
from the risks the profits may be
inordinatc. Having narrowed the
possible profits of the packers to
tion to producer and consumer, our
point of view was to encourage him
to follow the national food strategy
ut his own risk.
I'll. In calling upon the Trade Com
mission to re-examine this problem
we had in view some attempt to
further regulate down the possible
maximum profits Of the packers.
Since that time proposals have been
formulated in Congress to enact
further strong excess profits legis-
lation. Such legislation would be
the most satisfactory remedy.
Urges New Tax Curbs
'The food administration regula-
tions having in some degree accom-
plished stability in the market, hav-
ing stimulated production and served
-:
speculation, should be broadly sup
plemented by tax legislation that
would restore to the public any in
ordinate earnings that might be Sc
cured by the more fortunate manu-
facturers. This method also has the
great advantage of equalizing situa-
tions between different manufacture
ers, which is one Of the objects
sought by the Trade Commission
12. An advance profit regulation
operates, if too strictly drawn, to
curb incentive, destroy production
and limit efficiency. The sound
method, if possible, is to give fair
ly loose profit regulation, sufficiently
strict to prevent speculation, stabil-
ize price levels, and then to appro-
pirate to the government any ex-
traordinary profit that may have
arisen.
There is also a psychological
point of great Importance. Any
given business enterprise would will
ingly pay in the shape of tax what
ever may have been its extraordinary
profits. But if its profits are limited
in advance to the same sum the same
enterprise will feel it is restricted,
unable to protect itself against risks
Of loss, and the reaction will damage
the efficiency and courage in the con-
duct of this enterprise.
I'm conclusion, we are not in dis
agreement as to the fact that the
packers may earn too large profits
under the regulations. We are in
disagreement as to the method of
establishing regulation and perhaps
as to the actual percentage. On the
other hand, we feel that the whole
matter can we'll be deferred until the
character of the action now being
taken by Congress can be determined.
If it should prove ineffective to ac-
complish these ends, it would be
necessary to revise the regulations,
and l will take it up immediately
upon my return from Europe.
II have written a letter to Sem
ator Simmons Mt his request on the
whole relation of a properly founded
excess profits tax on it's bearing on
regulation of industry, which ex-
press more fully the views which we
have formulated in this matter, whics
l transmit herewith"