The Washington times., 1934-07-11

tain business ~ ~
men have "vio-
lated" their Lewis Haney
codes by joining together to fix
prices, "even as against the gov
ernment ITSELF" He says they will
be prosecuted.
But why should the New Dealers
be finding out" all this at such
q late date? They deliberately
suspended the Antitrust laws in
the case of code members, and
they openly approved many codes
which contained various price-fix-
ing arrangements.
A child would know that this
would lead to undesirable mon
opolistic results.
One great trouble with the
New Dealers is that they will
not learn from past experience,
or accept established economic
law. They insist on "experi-
menting." The only way they
know to learn that a fire is hot
is to burn their fingers.
Evidently we are now witness
ing the failure of another one of
their experiments" Certainly
they are crawfishing out Of price
fixing under the codes.
On June 7, General johnson
issued an edict that no new codes
were to contain price-fixing agree
ments, and that existing arrange
ments of this sort would be re-
yiSed.
It was being found" that
prices were marked up faster
than consumer purchasing power,
30 that farmers and laborers
gained little or no general bene-
fit from the schemes to give them
more money. High prices were a
serious drag on the building in
dustrieS. (The Government itself
forced down steel rail prices for
the railwayS) Now lumber code
prices have been cut.
High prices also stimulated pro-
duction and made curtailment
difficult. This has brought trou-
BILE with "hot oil' and non Blue
Eagle copper. We now "find out"
that the cotton acreage is at
least 28,000,000, although the New
Dealers tried to reduce it to 25,-
100000. They have failed be-
cause cotton is so high in price
that the farmers are strongly
tempted to raise more.
Business men, too, have run
into difficulties with price fix
ing. Some complain of the lack
of flexibility, which means that
they cannot change prices
quickly to meet new conditions.
Above all, however, 1 would
stress the fact that If price
fixing is allowed, Government
control is sure to come. BuSi-
ness leaders made a great mis-
take when they fancied that
they could retain "seIf govern
ment" if they were exempted
from the antitrust laws. The
quicker they learn that if they
want to run their own bust
nesses they must compete, the
better.
Another evidence Of the col
lapse Of the New Dealers price
fixing experiment, is seen in the
Presidents edict that there shall
he q Is per cent tolerance" on
sales to the Government. That
is, business men can cut IS per
cent under code prices on Govern
ment contracts.
But in some cases the Govern
ment is doing most of the buying
nowadays, and in others it is COM
peting with private business This
makes it probable that the "toler-
ance" would become general. You
can't have two prices in the same
market.
Anyhow, if an industry can cut
prices IS per cent and still make
money, why should it not do so
for all buyers? If a code price
is IS per cent too high, it should
be cut. If it is not, such a re-
duction should not be made to
the Government or anyone else.
It is a far cry to the day, not
so long ago, when price boosting
(to the 1926 leveD was what
the Administration seemed to
want. Maybe the New Dealers
are learning some economics.
They still have to learn that no
price is sound or lasting which
, does not represent a market
value, and that market value
must balance demand and supply
conditions.