Evening star., 1934-05-21
REPR|SAL FEARED
BY SMALL FIRMS
Minority Report Says
Boards Conclusions Are
Inaccurate.
By the Associated Press.

In ALL las witnesses have been
heard, whose testimony Is covered in
more than 2,753 pages of records
We have conducted ~ hearings
Obviously, in so S hort a time, 1t has
not been possible for us to begin to
investigate all the complaints which
we have received arising from these
various completed codes. Many codes
which are how under severe attack
by little business" men took months
to complete -7S0me are not finished
yet. Hence this report, which you
requested TOT be in your hands by
April Is. must necessarily be incom-
plete and largely inconclusive.
Diff gAculties Recounted.
A good deal OF the testimony : -
tended t6 show the difficulties under
which ttAe small man is working since
the veriouS codes have been put into
effect The main objection seems to
have been that in trying to work out
the principle of 'self-government in
industry" the little man"-the small
largely ignored. Nearly every
complaining witness heard raised this
issue. y"
In the old days. the small business
man was protected from monopoly by
the threat of the antitrust laws.
These laws are expressly exempted
from the provisions of any N. R. A
code or agreement affected under it
or any action taken in accordance
with the terms of such code or agree
ment, with the exception that
% Codes promulgated under the
N. r. A. shall not permit monopolis-
tic practices (Section 3, AZ, and
CD Nothing in the act shall be
construed to impair the powers of the
Federal Trade Commission under the
Federal Trade Commission act as
amended (Section 3, b.
Terborgh Quoted.
THE precise significance of these
qualifications is not clear says George
Terborgh of the Brookings Institution
in recent study on price control de-
vices in N. R. A. codes, but in any
event they have not deferred the N.
r. A. from approving codes contain
ing variety of arrangements for the
control of prices and production, some
OF which appear to be definitely con-
trary to the antitrust laws as here
tofore interpreted by the courts"
In this able study of the first $50
completed codes, Mr.. Terborgh dis
cussed four main types of price control,
which tend In some degree to modify
or abridge the freedom of an individual
member of an industry to control his
own production and to make his own
price and terms. These four main
types are:
% The fixing of minimum prices
under the codes;
~ Prohibition against selling below
individual cost of production;
(3) Open price arrangements, and
90 Limitation of productive ca
pacity.
Each Type Attacked.
Each of these types of control, ac-
cording to the testimony of many wit
nesses, is under attack by the small
independent man as limiting in some
form his freedom of action.
Definite research, developed along
these four lines. would be extremely
helpful in finding out in what way or
ways such provisions work as detri-
ment to the independent business man.
This board has taken up in critical
way some OF the most important codes
that have been approved. We have
heard, largely, one side Of the contro-
versy-that of the complainant. We
rad no power to command both
sides to appear. Naturally, this has
been a great disadvantage.
Price fixing, limitation of production
and other factors of monopolistic con-
troll approved by the N. R. A. led us
to believe that in some situations they
tend to strangle the independent buSi-
ness man in various ways.
The fatal weakness of our work up
to this time-and this matter cannot
be emphasized too strongly-centers in
not having secured at the very start OF
our investigation a thoroughly COM
petent professional staff of men-ex-
perts in code law and economic re-
search-to assist the Review Board in
digesting a great mass of testi-
mony.
Testimony Limited.
ss* The majority of the board has
not seen fit to approach this investiga-
ton from the point of view of careful
research and analysis. AS result the
conslusions of the board, based as they
are upon only very limited amount
of testimony-and that very largely
giving only one side of the situation
must necessarily be inconclusive, in
complete, and at times misleading and
unreliable.
With regard to section of the ex-
ecutive order. we have this observation
to make:
A great many of the completed
codes, now exceeding 800, embracing
over go per cent Of the industrial
paw rolls of the Nation, we're hastily
drawn and will have to be amended
sooner or later in order to protect the
little business man from exploitation
and monopoly.
We have received several thousand
complaints in nearly every State
in the Union.
Ignorant Of Codes.
An analysis of these letters and
complaints would indicate that large
percentage of them, possibly 80 to go
per cent, could be classified as coming
from those who lack knowledge of
the code and code procedure.
The balance OF the complaints, the
10 to 90 per cert, are distinctly fun
dameptal and important. They pre-
sent cases that strike at the very
foundation of American business life,
sernea SO far as I the little man is con-
-" Many of these smaller men
fear to tell their real troubles to the
code authorities upon the ground that
these authorities are the most power
full competitors of the small inde-
pendentsgf within their own industry.
Considerable testimony was
presented to show that credit for the
INDEPENDENT business man has been
very difficult to secure since the be-
ginnin of the depression. The ina