New-York tribune., 1919-02-24
Bureau of Departments of
Commerce to Establish a
Foundation of Costs
Price.Fixing Not Planned
Government, Capital and
Labor to Unite to Keep
Mills of Nation Running
BY Theodore M. knappen
NeW York. Tribune
Wdsi,n0tOn Bureau

Ne,U York. Tribune
Wdshin0tOn Bureau
WASHINGTON, Feb 23.-Formal an
nouncement of the creation of "the
Industrial Board Of the Department of
commerce" was made to-day through
the Council Of National Defence. The
function of the new board is defined
to be the "stabilization of prices for
basic materials in such fashion as to
create firm foundation on which the
consumer can base his future pur-
chases and the producer can form the
necessary production cost estimates"
The chairman of the board is George
N. Peek, of Moline, Ill.,, formerly vice
CHAIRMAN Of the War Industries Board
Hugh Frayne, who represented labor on
the War industries Board, also will
represent it on the new board, and the
official representative Of the govern Pow
ment will be Thomas C. Powell. director
of capital expenditures of the railroad
administration. Three other members
Will be announced later.
Ihe new board, it is considered. has
a very difficult and very delicate task.
lt is expected to find some way to yet
the wheels of production going again
on price basis that will lure the con-
sumer into spending, make the lob at
tractivc to the producer and at the
same time keep up wages.
Problem of Psychology
lhls sounds like a programme of
paradoNes, but the originators Of the
Idea believe that it is feasible and
that its problem is chiefly one Of
psychology, of the right attitude of
mind more than anything else. and
they Will seek to establish the "right
psychology" To do this they hold that
t the first thing to do is to get rid of
tne VICIOUS suggestion" which now
paralyzes business, that being the no
.lon that the present high prices can
De Kept up, and also the opposite
notlon tnat present prices must go
very much lower
The basic idea is that imitation has
established new normal plane Of
prices, and that safety and prosperity
he IN locating that plane in the region
between war prices, which often got
out OF all touch with actual imitation.
ana the old peace time prices. which
knew nothing Of imitation. The latter
are gone for good and "ought to stav
gone,' according to the ideas of some
economists, if the country is not to go
through wrenching reduction.
once this plane is somewhst roughly
located by artificial means it is believed
mat the wheels will begin 10 turn. and
alter that supply and demand will be-
come an effective economic ordinance
again.
"Ihrough proper investigation and
stabilization," says the S.Ticiai an
nouncement. "it is expected that tie
foundation can be laid for the resump-
ton of American business and for the
trrnlshlng of employment 20 returnin,.
soldiers and sailors this Though gov
ernment purchases, the publication Of
far price lists and cooperation of the
producers.
''To obtain this cooperation it Is
Planned that the board shall call the
various leaders of industry into cor-
sultatlon. The first of these confer
ences Will be with representatives of
industries producing baslc materials.
such as iron, steel, 1umpe., textiles,
cement, copper, brick and other con-
struction materials.
ut will be the endeavor of the board
to interchange views with these repre-
sentatlves OF industry in the fullest and
freest manner possible.
Normal Bases Sought
"lf these conferences result in a rcr
eral agreement among the important
basic industries upon proper prices
and bases for prices at which sales
VIII be made, and this agreement is
approved by the board, 1t is believed
that the announcement of this fact
VIII induce the nation to feel iustified
IN properly beginning a buying pro-
gramme.
"Such a procedure should, in sub
stance, establish Immediately a nor
NAL basis upon which to resume ac-
tlvities, and in this way the law of
supply and demand be enabled to come
INTO play, for, to quote Secretary Red
held, 1T cannot be too strongly en-
phasized that the proposal that the
government shall cooperate in the do
termining of fair prices on basic com
modit!es and in stabilizing these
prices through government purchases
is IN no sense price fixing pro-
gramme. No one will be under anv
sort of compulsion to adhere to The
price schedules arrived at. If a pro-
ducer can find market for his wares
at higher price no one can prevent
MS being free to avail himself of it.
II consumer is able to buy below
these prices, it will be his privilege to
40 1t. In substance, we propose to
~ ms SoPiletl, ldDOIa ana Lnc govern
ment together around one table and
with one purpose-to do the best pos
sible for the country"
The new board will aim at these
marks:
First-A reduction of prices to the
lowest possible plane, which, is. how
ever, recognized as being consider
ably higher than that of pre-war
prices.
Second-In order to attain the OBJ
ject of the reduction it should be
made in one cut, so that consumers
will not be tempted to wait for the
next cut
Third Capital should absorb the
bulk of the reduction and ask of
labor as little as possible, though
labor's vital interest in the resump-
tion of production is recognized and
there is a sort Of vague hint in the
skilfully worded programme that
80 per cent foaf is better than
none"