Evening star., 1933-07-24
PURCHASING POWER|
HELD RECOVERY ADJ
Small Business Men Seen Ap-
prehensive Over Needed
Higher 0utIays.
BY MARK SULLIVAN.

known as IN. r. A." should begin by
emphasizing certain facts about it and
about Gen. johnson, who is to head 1t.
Gen. johnson has had business expe-
rience and in this enterprise reflects
the business point of view. He, with
the theory that the sure formula for
chasing power by increasing wages and
employment. Thereafter recoup the
outlay and reap profits through the in
crease of volume of business which will
follow increased purchasing power. Not
~nly does Gen. johnson believe this to
e an infallible formula for recovery.
te believes further that any attempt
at recovery which does not begin this
way runs risk of failure.
Gen johnson is. in the common
phrase. absolutely ION the level" He
is business mans man. He has no
bug" about bringing about funda-
mental change in the American social
organization. He is intent on business
recovery in the interest Of all, and he
has no further motive.
Some Disquiet Seen.
Keeping this in mind faithful pic
ture of conditions in Washington and
in the field of business must record q
considerable amount of diSquiet about
this N. R. A. plan. The disquiet Is not
always expressed because the essential
spirit of the NJ r. A. movement Is to
unite in a common mood Of eXaltation
and approval. 1t is a psychological
drive" and business men feel they are
expected to cheer it on and keep mute
about any misgivings they may have.
Nevertheless, leaders OF some, though
not all trade associations now IN. WASH
ington, have manner Of being dis
couraged and doubtful. This Is particu-
larly true of retail trades. They say
that many large corporations having
strong treasures are able to invest
ready money in increased outlayS in
wages. and trust to getting it back sew
eral months from now. Many retail
merchants, however. and many small
corporations and individual businesses
literally have not the money to do this
The increase in outlay for wages
prescribed by the N. R. A. agreement Is
in some cases formidable. 1t Is not
merely that wages of the lowest paid
labor are to be raised to a prescribed
minimum. That is all the headlines
mention. The plan, however, contains
and, as many business men say, serious
outlay
BY one provision, the business man
agrees TO increase the pay for
employment now in excess Of the mini
mum py an equitable readjustment of
all pay schedules" That means, in
every plant affected by the agreement.
q general upward raise of all wages of
all classes of employees.
Must Raise Prices.
Many businesses, now running at
loss, and without reserve funds. say
they cannot possibly do this without
raising prices of what they sell to the
consumer. But raising prices of what
they sell, while not completely for
hidden, is strongly discouraged and Is
hedged about by severe limitations
The spirit and intent of the agreement
aims to prevent increase of price to
the consumer. The spirit of the agree
ment aims to bring public disapproval
on business men who raise prices to
consumers.
In effect, the agreement says the
business man should not try to get the
profit necessary to pay more wages out
of increase of prices, but should rely on
future increases in sales volume" As
to this, retail merchants say that some
big mass-production industries, like
automobile manufacturing. can get
profit out of. increase of volume. In
the case of many other businesses, in
crease of volume entails employment of
additional labor and increase of other
expenses in proportion.
A complete picture would be obliged
to record that some heads of trade
associations are troubled by an appre-
hension. They know they are dis
couraged from, in spirit prohibited
from, raising prices of what they sell
at this time. They wonder If they will
be allowed to raise prices later on.
They say the N. r. A. agreement runs
only one way. They promise the NJ r.
A. to raise wages. but they do not
receive any corresponding promise in
return. Vaguely they fear that when.
ad II business gets better, they may
be deprived of the future profit neces-
sary to recoup them for their present
outlay In increased wages.
Fear Discounted.
Probably this apprehension is un-
necessary The major ultimate objec-
tive of the Roosevelt administration is
to increase prices of everything. once
prosperity is brought back, assuming
1t is brought back, by the present
N r. A. operation, business men should
have no fear about participating in
CuC luluIC scucIdl IlSc Ol pIlCc-lcNcl
which the Roosevelt administration
aims at.
On another point, much disquiet
comes from the South. In that section
wages in all lines are lower than in
North and West. The present agree
ment, however. makes no distinction
between sections. 1t sets differing
standards for big cities, smaller cities
and small towns, but city or town in
Georgia is given the same standard as
one in New Jersey. Some Southern
business men say this paralyzes them
seriously. The condition is funda-
mental in any attempt made at Wash
1ngton to standardize anything on a
uniform Nationwide basis.
(Cepyrieht, 1881