The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1935-03-19
Dehind the Scenes
~ in Washington
WITH RODNEY BUTCHER
(Tribunc Washington COrrcspOndentD

Washington. March l9-The stewing in congress
MIRA legislation isn't anywhere near as important
ancient chamber of the u S. supreme court, the
long corridor between senate and house.
Nearly everyone in congress agrees that the least
that should be preserved of MIRA its provision for
tabliShment-and enfOrcenent-of maximum hours and
minimum wages.
Without that there just isn't any MIRA and If the
government lacks power to enforce it employers will slip
back to the old days when wages of IS and S. week
and work-weeks of 60 70 hours common in in
dustry.
The supreme court must decide whether wage and
hour regulations be enforced And it will decide
late in April early in May after 1t hears arguments
the Belcher lumber
Donald Richberg has proposed an MIRA which will
meet the courts objections in the hot oil by
clearly defining the intent Of and laying down
more definite standards.
But the Belcher case decision probably win tell
congress whether it can have any NRA 1T ALL
ISSUE IS PLAIN
Federal judges have been kicking the issue around
for months deciding this way and that way The issue
simply Is the production of goods interstate
congress empowered to regulate conditions Of production
by virtue of the fact that such regulation is necessary
congress is to exercise effectively its constitutional right
to regulate interstate commerce?
PRISON THREAT CLEAR
The senate munitions committee assigned q couple
of its experts to draft preliminary bill for control Of
the munitions industry and taking the profits out of
According to latest grapevine reports they had
agreed UQe-WQlcN
ton in wartme
~Trains shall run regularly to Leayenwsrth and
Atlanta"
John T. Flynn. eminent economist and writer and
member of the committees technical advisory board will
be called in to help write the He viii take the
witness stand present recommendations and be fol-
lowed by Bernard Names Baruch, who with General
Johnson sired the Mcswain "take-the
war" bill III the house
The senate committees bill will be much stronger
than the Baruch bill, which would provide for price,
freezing but not Tor removal OF war prOtltS.
BARUCH IN CORNER
Baruch will be asked reconcile it with his state
ment to the policies commission in 1881 that pro-
duction wartime, with lower cost per unit,
would result in huge profits with fixed price
structure and a high excess-profts tax" Baruch then
even explained how it would work, as follows
Consider the simple case of company captta.izng
for sl0ooooo selling 100000 worth Of goods annually.
making 20 per gross profit 100000 its turn
over and having 100000 of expenses of administration
and selling leaving net profit Of 100000, or 10 per
cent, on both its normal turnover and its capital!
Suppose also that 10 per cent OF its costs OF manu-
facure s8oOO0 is fixed overhead charges-deprecia-
tion maintenance, supervision, taxes. etc.
Then its cost of material and direct labor are $79o-
600 for every million dollars worth of goods it sells.
HUGE PROFIT CERTAIN
Nov, suppose war comes and we need the plants
full capacity We give it orders of 100000 worth Of
goods to be delivered in single year. It has no in
creased selling and administrative expense.
Neither do fixed overhead elements Of its manufac-
turing increase greatly-say only to 10000
Its material and direct labor costs on its 100000
sales are s288OoOO To this It must add $4,000 for fixed
overhead charges and 100000 for general and admin
stratve expense, making total cost Of goods sold Of
So O70,OOO
Its net profit is, therefore, ssssoes = 80 per
cent Of its normal profits in peace. It ID making
nearly 100 per cent on it, investment and its net
profit turnover has increased from 10 70 3 per
even if we assess tax Of 90 per cent on the $780,
600 of peace profit, the plant will stu be
making $2eoooo $50 per cent Of its normal profit