Evening star., 1933-06-18
Industry to Avoid Suicide

minimize as far as was possible the ap-
plication of new machinery to mines
| in order that skilled machinists could
devote their time to war materials.
The conservation section functioned
with the objective of reducing the coal
consumption required in the develop
ment of poWer-meaning that it sought
to make maximum use of existing power
facilities.
American in Origin.
These were instances of planning
measures of that period carried out on
national scale with Government CO.
operation or partnership" to assist
them. And the Influential hand Of Gov
ernment partnership" was often needed
to bring pressure that effected the
needed result.
The national industrial recovery act
which seeks to enlarge Government
partnership in business to a greater eX
tent even than during war time will go
into effect with the approval Of the
great majority of our industrialists. A
few years ago, however, it would have
been resented by all industries. And
business, almost to man, would have
denounced it as an attempt to social
ize" or 'RussianiZe" America.
Oulll 1lilpAy tllot NCiItld1
planning can only be carried on under
political system very different from
our own. I have. in fact, been told by
Russian officials that comprehensive
planning is incompatible with so-called
capitalism. Yet planning on large
scale is essentially American in its
origin and like many other details Of
their industrial policies it was bor-
rowed by the Russians from u.s.
But Russia is not the only country
that has used central planning to ad-
vantage. The Canadian banking system
is an excellent example of a we'll
planned organization. Each bank Is
as strong as the whole system and be-
cause of this there have been only two
banking failures in that country within
the last 20 years
Perhaps the best example of national
industrial planning comes from Great
Britain, when the coal mines act of
1880 rescued the British coal mining
industry from condition of chaos fully
as bad as that affecting our own coal
industry
This act provides for central and dis
trict "schemes"-to use the British word
to regulate the production and sale of
surplus coal by fixing the total amount
to be produced annually, the quota for
each mine and the minimum price to
be charged
The operating machinery of the plan
consists Of a national coal board and
district coal board for each of the
seven districts into which Great Brit
ain is divided. The national board
estimates for several months in ad-
vance the amount of coal to be mined
during that period, and then in con-
sultation with the district boards pro-
rates this production to the various
districts and allocates the quota to the
mines according to previously deter
mined standards.
Wages Important.
The matter of wages is. of course.
considered as Of the greatest impor-
tance and is under the jurisdiction of
a wage board. Wages are regulated,
not in accordance with the selling price,
but with the cost of production The
relative shares Of capital and labor in
the proceeds" from the sale of coal
cproceeds" being the sum left after
deducting from the selling price all
costs except labor are II per cent to
capital and 83.per cent to labor, with
a guarantee of a minimum wage. An
interesting feature of this scheme is
that the miner is definitely interested
in lower production costs.
This plan has undoubtedly accomp-
llshed its major purpose of permitting
the great resources of a nation to be
utilized in an orderly fashion of pro-
Viding living wages to the workers and
some profits to the owners, and of safe
guarding the interests of investors, con-
sumers and the general public 1t pro-
vldes us with successful working mod
el to guide us in our own planning.
But the undertaking which our Ma
ton has set out upon is more complex
than the British model. The first step
OF our industrial planners under the
new regime will be to attempt to cor
relate production with consumption.
In what may be called normal times,
there is some degree of correspondence
between productive facilities and the
demand for the product, and the amount
of output is fairly we'll regulated by
natural economic laws. But the war
gave us an excess of productive facili-
ties in many industries. Intensive SELL
ing methods led to extravagant buy
ing and the speculative mania of the
latter years of the past decade made