Evening star., 1933-05-14
BY WILLIAM HARD,

Dx WILLIAM hAhD.
All this prospective industrial re-
covery" legislation, with its possible
provisions for production control" and
price control" Is great triumph for
Representative Clyde Kelly of Pennsyl-
vania and also for W. Jet Lauck of
Washington, economist at large and In
general.
These two gentlemen have been
preaching "stabilization OF industry"
on the corners and in the corridors of
apparently they have a President who
Is at least in some degree willing to
embark upon the great experiment.
The So-called industrial recovery
act contains the germ of an economic
revolution and contains also the kim
ding for a tremendous political fight
The convening of the Democratic cau-
Gus of the House of Representatives
Wednesday night was the first flare in
that fight.
The President, under the influence Of
the movement set going by Mr.. Kelly
and Mr.. Lauck, has veered strongly
toward the idea Of governmental sane
tioning OF trade agreements for the re-
stricting of competition in the matter
of outputs produced and in the matter
Of the Democratic majority in the
House Of Representatives. on the other
hand. are profoundly opposed to any
restricting OF competition and to anv
governmental completely in any such
restricting. The contest thus initiated is
by. far the most important that has
arisen within the Democratic party
since the Presidents Inauguration.
The point of view of those who favor
the industrial recovery act" in its full
form and intention has been expressed
authoritatively during this present ses-
sion of the Congress by Mr. Kelly. Mr..
Kelly. Mr.. Lauck and Dr. Harold G.
Moulton Of the Brookings Institution
of Washington were subcommittee
of three for the first formulation of
the act. They were appointed in the
course Of a meeting called in the office
of Senator Wagner of New York, at the
suggestion of the administration. Mr..
Kelly and Mr. Lauck were perhaps
themselves the original authors of the
suggestion. for they had discussed their
industrial stabilization" ideas with
two highly influential and active cells
Of the brain trust" Raymond Moley
and James p Warburg.
Mr.. Moley and Mr. Warburg, 1t ap-
peared. had been already interested in
such ideas and their backing of them
produced the meeting in Senator Wag-
ner's office and then and there pro-
duced the most innovating set Of eco
history
Among those present. besides Mr..
Wagner. Mr.. Kelly. Mr.. Lauck and DR..
Moulton. were Virgil Jordan. managing
director of the National Industrial
Conference Board of New York; Fred I.
Kent. director of the Bankers Trust Co.
Of New York: James Henry Rand. Of
the Remington-R Rand Co.; former Rep
resentative Meyer Jacobstein of Roch-
ester, N. Y, now a banker. and Col.
Malcolm Churchill Rorty, famous as a
telephone engineer and manager.
These gentlemen proceeded to evolve
a plan which has undergone many mu-
tations but which continuously carries
with it the philosophy developed and
expressed throughout many years in
the House of Representatives by Mr..
Kelly. The administration bill en-
bodying the present stage of the plan
will have in Mr.. Kelly its most pro-
ficient interpreter.
In. a conversation with this writer,
MI Kelly elaborated his conception of
the basic complete ideas of the plan
thus:
The Government sets up National
Board for Industrial Recovery" That
board may recommend emergency loans
from the Reconstruction Finance Cor
poration to private industrial firms for
the enlargement of production and OF
employment. In order, however. TO see
to 1t that such production Is not un-
profitable and that such employment Is
not unremunerative and in order, fur
ther, to place all industry on stabi-
lized level of profitableness and remun-
erativeness hereafter, the board must
have further powers.
It must have the power to legitimize
the activities Of a trade association
within each industry 1t must have
the power to legalize arrangements
made by any trade association for fix-
ing the levels Of outputs and OF prices
and of wages. It must have the power
to oblige the firms within each indus
try to maintain those levels. 1t must
have the power to declare recalcitrant
firms guilty of unfair competition: 1t
must have the power to oblige all firms
to recognize the principle OF collective
BARGAINING anu W ucoi wiciA '''Si, S
ployes through representatives chosen
freely by those employees themselves.
It must have the power-in other words
both to regulate certain fundamental
functions of industry and to substitute
that regulation for the competition now
demanded by our antitrust laws.
X
In Mr.. Kelly's own words:
industrial recovery means produc-
ton contrcl There should be respon-
sib,e and effective trade associations
organized within each industry.
in order to meet the menace which
has destroyed cooperative efforts to
better conditions in the past, there
must be power to deal with the rack
eteers of industry.
"The Appalachian Coal Corporation.
which exists for the stabihzation Of coal
prices, and which has just been given
y