Evening star., 1933-11-01
BUSINESS SCARED
BY PRICE FIXING
Higher Wages and Curtai|eo
Earnings Hold Back Stock
Buyers.
BY CHARLES F. SPEARE.

Special Dispatch to The Star
NEW YORK. November while the
new gold policy was being discussed in
Washington Sunday, a member of the
official family, Assistant Secretary of
Agriculture Tugwell. was delivering an
address before an educational associa-
ton in Chicago.
The virtue of the fresh venture into
the gold markets of the world was that
OF advancing the price of commodities
ana thereby stimulating recovery in
business. The social and economic
philosophy expounded by Prof Tugwell
was that business. as now functioning,
is old-faShioned and that the factor of
profit is overemphasiZed. while that of
distribution of profits has an under
estimated Importance in bringing about
greater industrial activity
On Monday the iron and steel manu-
facturers capitulated. They had said
originally that they would not sell steel
rails below $40 ton. Then they agreed
collectively to let them go to the rail-
roads at $3.50 ton. Co-ordinator
Eastman insisted that S35 a ton was
enough for the carriers to pay. A COM
promise was reached at S3635 a ton, or
a drop of S663 a ton from the price of
year ago-in other words, a conces-
sion of over Is per cent from a price
schedule supposed to be lnviolate.
Forced to CapituIate.
The administration had forced the
most powerful group of industrialists in
the country to sell their best product at
figure that these men would have re-
garded as confiscatory few months
ago Government had entered into
price fixing with a vengeance
Getting back to Prof. TugWell at Chi
cago, this is paragraph OF mis- address
to the educators: Perhaps the most
popular of all the presently popular
theories of government among business
men in the following terms: In
older to set things going again we must
insure business profit. Only with this
assurance will they begin to borrow. to
expand their operations and to give en-
ployment.
There is no denying the truth of this
doctrine. 1t is impossible to shake it
cut OF the business mans system. Sc,
when he finds himself in the grip of the
Government, which decides how much
or how little his profits may be, he nat
urally refuses to expand or to give en-
ployment except to cover immediate re-
quirements.
This sort of creed, according to Prof.
Tugwell, is all wrong. What is required
is that incomes must be transformed
into larger wages and higher prices to
farmers, not simply stacked up in sterile
boards of capital if wealth. in any large
and gratifying sense, is to breed again." "
FavOrs Small Profits.
1t might be mentioned that the first
effect of the N. R. A. program was to
advance wages much in excess of the
increased ratio of employment and that
farm prices had a substantial rise. A
combination of the two die. not create
enough industrial momentum to carry
along the industrial recovery as much
, as four months before meeting with a
serious interruption to it.
Nothing but higher wages and farm
incomes" said Prof. Tugwell, together
with moderate retail prices, can redress
the Embellishments which continue to
exist in the structure Of our prices.
Profits will have to follow from new