Evening star., 1933-08-26


has emerged as q necessary and major
job for the Recovery Administration.
and 1t may get under way right after
the pending big codes.
Once these groups are under bind
ing codes. a definite hump will have
been passed by N. r. A., and the long
range job OF policing the compacts will
come to the fore.
The part that price control will play
in this was accentuated by Gen. john
son, with statement that he intended
to set up complete organization to
watch what the code-signing indus
tries are doing SO they may be warned
if prices get too high. He Is con-
cerned already, he said. with some fu-
ture price quotations which have come
to his attention.
Justice Department Watches.
The big stick" which the Govern
ment may WELD to keep prices in line
is the presidential power to lift the
recovery laws grant of immunity from
antitrust law prosecution. With the
N. r. A.. the Department Of Justice Is
keeping an eye to the situation. ready
to step in If necessary.
Already N. r. A. has considerable
organization to watch application OF
the textile codes. keep track Of price
quotations. cost increases and the like.
There is no intention to forbid neces-
sary price increases. but the emphasis
will be on preventing unwarranted
profit taking.
Johnson, in q conference with news
no 10 OF oil la ry11
at the tendency, which he said was ap-
parent in some industries, to increase
prices ON a speculative basis. He said,
however, he could find no basis for the
assertions OF some people that prices
were running away in all directions.
Random Check Made.
I'VE have made several random
checks in the Government" he said,
"and they do not support the conten-
ton of some people that prices have al
ready run away. But I do not like
the looks Of such forward quotations as
have seen in some fields
Asked if it is possible to prevent In
creased costs Of production from being
reflected in prices, Johnson replied:
Certainly not but it Is possible to
prevent anticipatory and gambling ad-
vances in quotations from being put
into effect.
In some Of the codes-retail for
example-there is a provision that there
shall be policy OF the industry against
adding additional costs
Another questioner said: Except
those occasioned by the N. r. A.. do
you intend to keep police power over
that?"
"Monopolies Prevented"
Absolutely over that code and over
every one of them" the administrator
replied. There are two reasons The
first is that there Is provision in
the law not to permit monopolistic
tendencies to appear and second not
to permit the oppression OF small
enterprises.
we have to- execute this law. We
came to a day when recognition was
given to a demand that the Sherman
act was responsible of itself for some
OF our troubles Lift that, they said
and you can prevent the abuses. for
which that was enacted, by other
means.
That is the reason for the ma
tional recovery act. to enable people
to get together. But We must see
that the abuses for which the Sher-
man act was enacted shall not grow
up. We shall allow them to proceed
to industrial elf-government, but will
keep valid a contract of supervisory
nature with the power TO modify or
veto anything they do"
Seven modified presidential re-em-
ployment agreements were approved
yesterday by johnson for the trucking.
fiber and metal buttons. scrap iron and
steel, handkerchief. cocoa and choco-
late, printing ink makers and funeral
supply industries.
Under these modified agreements. the
employers may put their own approved
schedules Of wages and hours into effect
and receive the blue eagle pending hear
ings on permanent codes.
The memorandum Of DR.. Sachs and
Pogue on the Wice-fixing provision o:
the oil code follows:
The proposed code includes q
clause which permits the President to
fix a minimum price for wholesale
gasoline for test period Of 80 days,
after which he may continue Or
of course, is form OF price-fixing
and represents q statement Of general
policy.
See Overproduction Gain.
"The establishment of q minimum
gasoline price and the announcement
thereof in the presence Of the serious
overproduction now obtained in both
the crude oil and gasoline fields will
render it particularly difficult to bring
about promptly a balanced situation,
for obviously, retiners will continue to
overproduce If the profit margin is
guaranteed to them. The overproduc-
tion of the present production of crude
is 2,8O0 900 barrels. against the con-
sumner demand Of 100000, indicating
a current overproduction Of 100000
barrels a day. critical weight Of over
supply
This overproduction has been aggra-
waited during this whole period Of dis
cussion. which has tended to thwart
the readjustnent whichs otherwise
would have taken place. The present
price of crude is around so cents a bar
rel, and had the price responded to
the overproduction 1t would have gone
down on the basis of historic precedent
to 25 cents barrel.
See Control Handicapped.
Furthermore, this action destroys
the sensitivity of the most important
single price in the industry, namely,
SpOt paSOline and therefore SERIOUSLY