Evening star., 1934-05-21
By the Associated Press.

By the Associated Press.
Following is the tert of supple
mentary report on ~ r. A. and
little business, made TO President
Roosevelt by Clarence Darro1D and
William o. Thompson. and the
dnsuer thereto by Hugh Johnson,
recovery administrator:
We beg leave to submit herewith
additional comments pertinent to the
report of the Review Board, national
recovery act:
The full effect of the national re-
covery act. in that feature of it that
gives governmental sanction to self
government by large combinations, is
yet to be revealed.
For example, complaints come from
small businesses that they cannot pay
the minimum wage set by the code.
Analysis shows that this difficulty
arises usually out of the increased
costs of production which have their
root in higher prices for raw materials
Zone OF the evidences Of monopoliStic
tendencies) and hence the complaint
against the wage scale cannot ac-
curately be attributed to the mere
desire Of the little man to chisel
wages" 1t must be attributed to the
monopolistic combinations, and is
therefore one of the central results
of the whole operation Of industry
under the control of the large pro-
ducers.
Wages Depend Upon Market.
Again the demand for regional def
ferences in wage scales will be found
to be apparently attributable to din
culties in finding a market; and hence
the desire to reduce cost of production
at the most vulnerable point, the wage
scale-other costs being controlled
Again this is to be attributed In part
at least to monopolistic tendencies
which control markets and which
must be thoroughly analyzed before
the specific requests of manufacturers
for lower rates IN certain regions can
even be understood in relation to
their primary causes, namely the
growth of monopoly which at first in
tensif1ed competition.
The Congress 20 years ago estab-
lished the Federal Trade Commission
to prevent monopoly. With the ad-
vent of the national industrial recov-
cry act it was expressly stated that
industries would be permitted to COM
bine to govern themselves and on the
other hand administration OF the
codes adopted was put under the con-
troll Of these combinations. The anon
ally arises from that form of ad-
ministration that monopoliStic combi-
nations are expected to enforce against
themselves q law to prevent monopoly
Moreover, the fact finding which
would reveal these violations of the
law is also largely under the control
of the code authorities, that is under
the industrial combinations.
Dangers Cannot Be Revealed.
The dangers OF monopoly which
are inherent In the national indus
trial recovery act cannot even be re-
vealed to the people Of the United
States, if fact-flnding and enforce
ment are thus controlled by indus
trial combinations. To permit the
National Recovery Administration to
carry these obligations is to expect
violators of law to sit in judgment
upon and to condemn themselves.
During the whole period since the
war when the power Of monopoly has
been growing In this country. the Fed
eral Trade Commission has been in
creasingly weakened and it Is doubt
full whether that commission or any
power Of Government can protect the
small man. Nevertheless, the fact re-
mains that in the immediate present
the Federal Trade Commission is far
superior to the N. r. A. as an enforce
ing nd fact finding agency. TIC
transfer these powers from the N. R
A. to the Federal Trade Commission
as a next step would help to inform
the public as to the inherent diff
culties which arise from the position
of the small man in the present stage
of industrial development and capi-
tai structure In the United States.
One Common Problem.
Briefly. this may be described as
follows On the basis of evidence be-
fore the board:
AL business, large and small, has one
common problem, namely, to find a
market at profitable price. But the
effort to solve that common problem
gives rise to conflict of interest be-
tween large and small businesses, In
which the small man Is the loser, and
no power under the N. r. A. is showing
itself able to protect him.
In an age Of plenty, like the present
stage Of American industry, abundant
production creates intense struggle for
markets. Unregulated competition
forces down prices, wages and salaries.
This pressure is felt seriously in the
basic industries, in raw materials and
in agriculture-that is, in the natural
resources. Regulated competition. on
the other hand, through combination,
naturally has for its purpose the SELF