The Washington times., 1934-04-06

AA4ANAoOAy kO"SS
to get together
on prices, and ~
practically eX- - <@S:z*Ess y =
empt them "W" ha"ey
from the antitrust laws. Second
they raise operating expenses,
and that is made the basis Tor
raising prices.
The NRA codes also lead to
control over marketing methods
and to fixing the amounts al
lowed to wholesale and retail
dealers. For example, in the oil
trade an allowance Of 6 cents
a gallon is prescribed to cover
the jobbers and retailers OF
gasoline, and they are prohibited
from rebating any Of this liberal
amount to consumers.
OF course, this sort Of thing
leads to monopolistic price fix
ing and price maintenance. It is
most interesting to read what
the head Of the Steel Corporation
said, namely, that NRA had given
the steel producers the privilege
which they sought for years. He
meant the things called 'stabiliza-
ton" and cooperation These
in practice mean price fixing.
So the steel companies have
hastened to raise wages. But
then they promptly marked up
their prices. If everybody did
that, the higher wages would do
the laborer no good, since his
cost Of living would rise.
But equally interesting are the
statements of the heads of Gen.
eral Motors and Of the Ford
Motor Company.
The former says that such "co-
operation" in industry should not
be allowed to raise prices to con-
Sumers except when necessary to
cover the costs Of the most eff
cient producer.
He says, "Otherwise We put a
premium on inefficiency-and we
raise the price to the consumer.
with the result that there is less
consumption of the products Of
industry and hence increased un'
employment"
And Henry Ford says:
Neither higher wages nor, in
creased material costs can force
us to raise prices. When prices
go up, business goes down.
Everybody will be looking for a
plan to reduce prices before we
can say that business is getting
back where it should be-"
So we find a monopolistic school
arguing for Corporation" and
high prices. And we find an eff
cheney school arguing for competi.
ton and low prices.
In this case, I think Ford is
right. Business, in the last anal
ysis, is justified by what it does
for the consumer. Profits are
justified only by efficiency, and by
products that are cheap, quality
considered.
When things are cheap, more
can be sold. Then more can be
produced. Then more labor can
be employed. Then the real in
comes of all are increased.
But, above all, Mr.. Sloan, Of
General Motors, Is right. These
"code" combines may restrict
competition and raise prices, thus
enabling the inefficient producer
to get by and make profits. They
keep alive the economically unfit.
They also tend tc prevent prog
ress and make for rigidity. They
try to keep business in certain
fixed channels which they call
fair" This prevents competitive
experiments to try out new and
cheaper methods.
One result will be an irresistible
movement among manufacturing
consumers and us ultimate con-
sumers to defeat such schemes.
Thus Ford threatens to roll his
own" steel. Consumer groups
C'cooperatives") will form every.
where to buy their gasoline and
other supplies without paying the
excessive spreads" which various
codes assign jobbers and dealers.
We want the most for our
money. Monopoly and high prices
are not the way.