Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-03-11
WAR PRICE FIXING
PLAN HIT BY BAKER
Too Rigid Advance Laws
Hamper Success of Armies,
Ex-Secretary Holds.

Drafting of men for industrial occu-
pations and the freezing" Of price
levels at the outset of a war were op-
posed by Newton D. Baker, who was
Secretary of War during the World
War, testifying today before the COM
mission set up by Congress to study
methods Of equalizing the burdens and
minimizing the profits In future con-
dicts.
Expressing the belief that in modern
warfare methods and problems change
as the conflict progresses, and must be
solved as they arise, the wartime Sec
rotary told the commission he favored
only a limited amount of preparatory
economic planning. 1t would be mis-
take, he thought, to have an !nnexlole
plan in advance.
In the World War, he said, the war
Department found itself more emoar-
raised by laws already on the statuGe
books from peace time than by the lack
of Law MI. Baker characterized as
unwise the proposal OF capital levy as
a means of financing war. Any leg1S-
lative provision against any exemptlon
from universal draft based on mous-
trial occupation would be unfortunate,
he said, adding that modern war Is not
only a war of men, but OF material.
There are certain men, he said, whose
presence at their daily jobs is essential
TO the successful prosecution OF the war.
View of Baruch Plan.
The former Secretary of War said
the plans outlined to the commlsslco
last week by Bernard M. Baruch, who
headed the War Industries Board, were
admirable, but he expressed the belief
that IL would be better to follow Mr.
Bar1lchs processes than to install his
procedure at the outset. Referring to
Mr., Barucla's proposal for freezing
price levels" at the beginning OF
war, with an agency to unfreeze them
I'D or down. Mr. Baker said he was
inclined to regard that as unwise.
II would have an agency to flx
prices but not with freezing In ad-
vance"
Mr. Baker expressed the belief that
prices in this country went up rapidly
before the United States entered the
World War, but that they went up
rlodestly after this country entered.
and in soma surprising cases they went
down.
MI. Baker indicated that he had in
mind wartime regulation Of prices by
reaching q conclusion with regard 10
each industry, and then freezing the
prices, elastic enough to obtain produc-
ton of the things needsd. He argued
that excess war profits can be recap
tured by taxation as they were recap
tured"
Replies to Robinson.
Asked by Senator Robinson Of Arkan-
diea diva nta0eg in
permitting liberal profits in time OF war
and then "recapturing" them by taxa
ton. Mr.. Baker said there are some dis
ADVANTAGES but he thought they were
largely sentimental. expressing the be-
lief that people do not always realize
how much is taken back in taxes.
Mr.. Baker took the view that the
largest profits in time Of war are the
profits in q nation not engaged In the
war, He estimated that SO per cent OF
the new millionaires in this country |
made their money before the United |
States entered the war.
Asked by members Of the commission
10 comment on another pending pro-
poSal to require q referendum on going
to war, except In the event OF attack
or invasion, Mr.. Baker pointed out that
this Is q representative Government and
that he Is inclined to have faith in the
representatives of the people. He said
that IL It were possible to obtain in an
instant an expression of all the people
when a war is threatened, 1t would be
an excellent idea. but he expressed the
fear that the period Of time required
for Q referendum would tend to divide
the people.
Mr.. Baker pointed out that court de-
cisions from time to time have upheld
man. implied powers which rest in the
he of the Chief Executive Of the
Un 81 States in time Of war to meet
prc3.em as they arise.
Gen. Pierce Testifes.
Brig. Gen, Palmer Pierce, retired, a
former mep;-Sr Of the general staff, told
the commission that lin order to get the
best results and suppress excessive
profits the Government should regulate
instead of draft labor. capital and in
dustry' in time of war.
Industry and capital" Gen. Pierce
continued should remain in the con-
troll Of those trained and accustomed TO
exercise such control in time Of peace
A draft of all these agencies would pro-
duce changes of conditions not in har-
nony with the characteristics and Gus
toms Of our people. The power to draft
should be ever present and the Presi-
dent should not hesitate to use 1t in
extreme cases of defiance or OF failure
TO cooperate. 1t is believed other solu-
tons of this important problem of tax
ing the profits out Of war should be
sought"
Among the recommendations made
BY Gen. Pierce were the following In
the event Of any future war formation
OF body similar to the War Industries
Board, but more inclusive, and func-
tioning under the war powers of the
President; price fixing to prevent in
flation, and licensing of manufacturers
Of public necessities; Communicating of
plants that fail TO carry out regula-
tons, or whenever necessary for the
public service.