Evening star., 1934-05-21
Restriction Upon Production
Dooms Recovery, Dorro" Says
Supplemental Report Claims N. r. A.
Sustains Monopoly-Socialised Con-
troll Seen as Only Cure.

troll the combination.
The strongest OF these combinations
can take their profits at any point
along the line from raw materials to
final sales, thus controlling the price
for raw materials and for semi finished
articles and often forcing up the price
to the ultimate consumer.
Small Man Driven Out.
The small business man, who con-
trolls only a part of this long line of
the economic process, is often driven
into bankruptcy by the low prices
forced upon him by the powerful COM
binations which are at once producers
and consumers.
The N. r. A. has given the sanction
Of Government TO self-governing COM
binations in the different industries.
Inevitably this means control by the
largest producers.
Not only is there conflict between the
large and small business in the same
industry, but similar conflicts arise
as between different industries, such as
oil, coal and hydro-electric power; or
different types of textiles which can
be substituted for one another In the
same market.
The control Of market which is at
tanned by force Of monopoly maintains
profits by diminishing or restricting
production, that is, by decreasing
wealth and lowering standards of liv-
ing. 1t also maintains profits by low
ering costs OF production, that is, by
lowering wages, and reducing living
standards for the workers.
Consumer Does Not Gain.
In the control of prices to suit
combinations able to determine where
the profits shall be taken, the small
business man must either be swal-
lowed up in the combination or
perish. Yet the consumer does not
gain through his elimination. and the
tendency to raise prices while forcing
down wages reduces the purchasing
power which alone can balance pro-
duction and consumption. This kind
Of restriction on production in the
interest of the strongest producers.
while running small business men and
farmers and lowering standards of
living for all workers., also under
mines the community's ability to sus-
tain education, music and the cul-
tural activities which depend on the
community's use of its surplus wealth.
To go back to unregulated COM
petition in which the small man can
gain his share of the market by some
special advantage of skill or other
factor, is not possible in a situation
where archaeological advance has pro-
duced a surplus so that unregulated
competition demoralizes both wages
and prices and brings on recurrent
and increasingly severe industrial de-
preston. Only by the fullest use of
productive capacity for the raising of
standards of living of individuals and
the community can a steady balance
be achieved in an age of abundance.
This, however, is possible only when
industry produces for use and not
for profit, since it is essential that
enough wealth should be distributed
through the return to the workers
to set them as consumers free to use
industry's plentiful output.
Planned Use of Resources.
The choice is between monopoly
sustained by government, which is
clearly the trend in the National Re-
covery Administration. and planned
economy, which demands socialiZed
ownership and control, since only by
collective ownership can the in
evitable conflict of separately owned
units for the market be eliminated
In favor Of planned production. There
is no hope for the small business
man or for complete recovery in
America in enforced restriction upon
production for the purpose of main
tanning higher prices. The hope for
the American people, including the
whelmed by their own abundance.
lies in the planned used of Americas
resources following socialization. To
give the sanction of government to
sustain profits Is not planned econ
omy, but regimented organization
for exploitation. The N R. A. Is at
present in the stage of conflict of
interests, but in proportion. as the
authority of government sanctions
regulation by industrial combinations,
the inevitable tendency is toward
monopoly. with elimination Of the
small business.
The answer Of Gen. Johnson follows:
The supplementary report confirms
the opening statement in Mr.. Rich
berg's commentary that the Review
Board in its original report was sim
ply seeking to justify a preconceived
opposition to the fundamental theories
and purposes of the national industrial
recovery act" In the supplementary
report the way suggested to destroy the
Industrial recovery program is to trans
fer the powers of fact finding and en-
forcing from the N. r. A. to the Fed
eral Trade Commission" The purpose
(Contihued on Seventh Page.)