Evening star. [volume] (Washington, D.C.) 1854-1972, 1927-12-31

I
year as a whole M
would be described AA-
as pros erous, David Lawrence
such general
terms were used cautiously. be
cause il was recognized that in Ger
tain lines OF trade there were mod
crate recessions. These "receSsions'
would never have been recognized as
such in years like 1923 and 1924. but
when comparisons are made between
1922 and the unprecedented gains OF
1926 there was 8 natural falling OH
Usually. IN business, as earnings in
crease there is inevitable expansion
SO that 1922 found many lines OF
business expanded to such an extent
that the earnings of the year were
not sufficient to have warranted the
OUTLAWS made.
But il is an i'll wind that blows no
good. and the general feeling here
now is that the prudence which was
forced upon the business world in
1927 will have its effect in 1928
Businesses have been reorSaniZed 10
meet competition, economies have
been effected. and il would not be
surprising TO find a year hence that
1928 figures have closely approx
mated those of 1926.
heSut3tIHs TEOuuCtfUu.
On almost every side nowadays the
Government is asked, in one form or
another, 10 regulate production, that
is. TO withhold any legal action
against such voluntary curtailments
ss an industry might want TO make.
II consumption requirements do not
come up to production an industry
usually feels that il should have the
right in some way to curtail that
production The industry is likely 10
call II "s;ahiiization" Of prices, but
the Government lawyers are Stll
hesitan1 about allowing anything that
looks like concerted price fixing.
In this problem of regulating pro-
duction the Government plays vital
part. because The Sherman antitrust
laws are still on the statute books
and the Department of Justice still
potentially holds a sword over the
heads Of businesses that want TO tN
prices. Under The management of
Assistant Attorney General Donovan
the Department OF Justice has de-
veloped q new practice of conference
with industry. which tells business
in advance thu apparent dangers Of
merging big units.
These informal conferences do not
constitute a guaranty against prose
cution. bot not infreQuently some OF
the pitfalls that might lead 10 prose.
cution can be avoided in informal
talks between the principals and the
department officials.
Business Seeks More Freedom.
There has risen. nevertheless. a cry
from business men that the Sherman
antitrust laws ought to be amended
SO THAI business will not be embar-
raised and restrained from natural
combinations that must he set up in
order TO compete in home markets as
well az abroad. The Government at.
titude lie that there may be certain
economic reasons for combinations OF
big units. but the consumer must be
protected against arbitrary USE of
economic power by big business
mergers. Business, on the other
hand. says tina: new efficiency has
20 be developed. and that margins Of
profit are constantly being reduced
and that overhead can he eliminated
by combinations OF various concerns
in the same line Of business. 40 that
ali Of them will conceiVably make
more money In combination than as
separate units.
The past year, therefore. has seen
many mergers Most Of these arose
from 8 desire TO eliminate waste. cut
down overhead and reduce the selling
cost. Labor already has been exempt
ed from the operations Of the Sherman
Law, and so has agriculture. Business
- not sanguins about getting any
thing like a repeal OF the SheFn an
law. but Goes want a better defini.
ton Of &hat can and cannot he done
The Department 0, Justice suggests
that such definition cal best be Oh.
tanned by a series OF test cases in
which concrete Instances are placed
before the Supreme Court. The view
- taken that the Sherman Ia " IL ike
charter Of principles and that
test Of whether an actual restrai int Of
trade exists must be left 10 the ape
clnc CASE, and that big combinations
are permissible. provided no undue
advantage is taken Of the public.
Government Regulation Probable.
IL the antitrust laws are amended
some c&y--snd the movement IL grow.
ing Ina that 0irection~-any cha ngs
probably viii lie accompanied by some
measure 81 regulation on the part OF
the Government This viii lie the
price thai business viii hs Ye 10 pay
tor sucH amendment In other words.
the Government must retain some
power 10 step in IL IL BECOMES ap,
tion IL hxlna prices aud developing a
TnoBotcIy which leaves the consumer
helpless. Many 81 the public utilities
~ the country have natural monoDo>
lies, bus they are regulated ny The
ELalS commissions
The railroads are regulated by The
lDtsf stale Commerce CDfninis1iOn
- iiiis business does not want ~ tlIug
4u sny mare commissions ar bureaus
- regulate IL. an institution like ting
FedeFal Trade Commission might vel
lave 10 DhES upon care that effect
Unfair ar ~ economic fSowsf or re-
$tiSlTt u tTadS The Federal Trade
tssinihisslnn uo~ confines Itself ~ con
hiTts @llhin So industry and ieayel
ib@ sherman law ~ he enforced by
ias Depsf meHt ~ jusilce
There IL sehori II thought sbicf
- coRdfU ming too much GovefnfHenl
}ntsifs fshcs Ia business and there "a
gsHkfgI recognition among s,fffriHi,
here - TIE sDfis rrsss'uEnts ~ inter
fetence bDt IL industry should van
ine rxht 10 eUrtaii prod uctinb ans
~ prices ths ins Hitsbis IesDlt her
@jii sse Government regulation -
SONS Kind cd pfoteciipn To lie con
aVD4ef
Foreign Trade Problems
Thess tendencies ere Significant o
the transition sts.s~~the irBnrfe
from period ~ big production 4
49, eta ~ distribution The GOVERN
nent agslu comes into tie pictUr
beer use ~ the es gsfness ~ Americai
business 40 set Trade sbrDad II 4
Teelized t9at our SURPRISES must fn'
nagket our export ltade has heei
Increasing by leaps and bounds
Foreign GaTieis sR6 combinations "a
3eady sfe making u increasingly dlf
cut t.! iLs AmsIlcsn business ma