Evening star., 1932-12-31
Leaders, After Survey, Insist
on Preservation of
"Profit Motive"
COMMITTEE SUGGESTS
REMEDIAL MEASURES
But Findings Offer No Radical
Reorganization of Industrial
Structure.
BY THOMAS r. HENRY.


While technocrats are proposing that
government be turned over to engineers
as distinguished from politicians or
business men, the engineering profession
itself. as represented by the American
Engineering Council, with headquarters
here, are attacking the problems due to
the present world distress also from the
standpoint of their profession, but at a
less radical angle.
The councils Committee on the Bal
ancing of Economic Forces, which in
cludes some Of the foremost engineers
IN the country, has been at work for
the last year and has submitted its pre-
liminary report, which, without offer
ing any panaceaS, proposes some posi-
BILE remedial measures.
the committee is composed of r. E.
Flanders, New York City; L. P. Afford,
Springfield, Vt; F.. j. Chesterman, Pitts
burgh; Dexter S. Kimball, dean of en-
cheering at Cornell, and L. w. Wal
lace, executive secretary Of the council
Want Profit Motive" Kept.
Unlike the technocrats, this commit
tee proposes no radical reorganization of
the industrial structure, but insists that
the profit motive" be preserved 1t is
described as the guiding principle that
now preserves order in the incalculable
complexity of business relationships "
At the same time the report states, 1T
may properly be said that it is only one
OF the many motives by which men are
moved, and often is overshadowed by
other elements more clearly in the fore
ground Of consciousness.
he
continued. have established a going
mechanism of money, credit. labor and
services. The mechanism is not oper-
ating properly. But in view of the COM
plexity of the processes and the meas
ure Of success achieved. the decision
must surely be to study its deficiencies
and lubricate its movements rather than
to discard it forthwith"
1t points out two attempts to bring
such an "incalculable mass of economic
transactions as constitute American
industry under control without the
profit motive. The first was made by
the War Industries Board during the
World War. This was simplif1ed by the
fact that there was only one customer
the United States itself-having only
one object. Such a mechanism, it is
pointed out, could not operate with
100000 customers. each with a diff
ferent objective. The second attempt
is that of Russia. where the problem,
according to the report, also has been
arbitrarily simplifled.
1T Is based" the report said, "on an
alleged temporary low standard of iv-
ing. with limited number of necessi-
ties and a still more limited number of
luxuries. The adoption Of such a for
mula in the United States would mean
the reduction OF the richness and vari-
ETY. OF the comforts and satisfactions of
the American people"
Public Works Program Proposed.
The committee proposes a program
OF non-competitive public works. but
does not recommend laying up reserves
in prosperous times for such a purpose,
for. the report said. such an accum-
lation Of funds would be embarrassing
to the necessary balance between saw
ings and investment. In large-scale
Government operations it is preferable,
contrary to the accepted principles of
financial morality. to borrow, spend and
repay, rather than to save and spend"
1t frankly admits. however, that these
policies cannot be used in the present
situation for the period of borrowing on
most favorable terms is passed, the
needed Government reorganization Of
public works control has not been ef-
fected and the study needed to co-ordi-
nate the program has not been given.
1T would appear that if. when en-
ploynlent has reached certain low
point, q policy were followed of borrow
ing for extending public works. this
action would have quick remedial ef-
feet on the business situation. Such
governmental borrowing would serve to
reduce the accumulation of savings
seeking investment 1t would also
have the direct effect of furnishing
work in increased quantity to a body
of workmen in which unemployment
otherwise would be growing"
The Engineering Councils commit
tee finds perhaps the most vital neces-
sity of all some means for the stabili
zation Of money. but does not suggest
any definite procedure, such as the
substitution OF energy units as pro-
posed by the technocrats.
Proposal Advanced.
"The seriousness of lack of control"
the report said, 'is beyond words to
express because it is probable that the
world is in full movement on a secu-
turns only in prospect. What is re-
cover a safe and reliable means of
controlling the value of money. In
stead of question by the tabooed or
ignored, It should be looked upon as
the most important financial subject to
which those in charge of the worlds
money can devote their energies"
Among the proposals for keeping
money at work is that each banking
organization maintain a staff of en-
gineers to search aggressively for sound
fields of investment. Hitherto" said
the report, 'the demands for capital to
supply railroads, construction and the
of bicycles, automobiles,
war material and other equipment have
AFFORDED the money available for in
vestment. What is there now which
will draw the idle millions of the years
to come into profitable industry? Will
it be by the building of houses? If so
the cost of their construction will have
to be diminished by new methods and
by better equalization of labor rates
as between the building trades and
those whom the buildings are to house"
Two other great American depres-
siocs, the report points out. have been
ended by the discovery of new gold
supplies. That following the War of
1912 was ended with the California
gold strike, while that following the
Civil War was broken by the gold
strikes in Alaska. Australia and South
Africa and the invention of improved
processes for extracting gold Nothing
more of this kind can be looked for, the
engineers believe.
Danger in Experimentation.
1T Is clear" the report concludes,
that the arbitrary control of modern
industry and commerce, in all their
complexities. ramiflcations and details,
Is beyond the power Of human beings.
The influences now at work must con-
tinue to govern its details. The profit
motive and the active force of COM
petition must be retained In such ef-
fective operation as will give society
the benefit Of continuous improvement