Evening star., 1936-05-17
DANGERS Of WEAK
INDUSTRY SEEN IN
PRICE REGULATION
Free Competition Declared
Way to Strong Trade
Structure for U. S.
GOVERNMENT THEORIES
REGARDED AS MEDIEVAL
Higher Prices at Which Little
Can Be Produced and Sold Be-
lieved Without Benefits.
BY J. G. DONLEY.

Special Dispatch to The Star
NEW YORK, May 16.-Once
asked David Burpee why it is that
weeds are so strong they will grow
anywhere and are hard to kill, while
some flowers and even some vege-
tables are difficult to raise.
His exact words have slipped my
mind, but in effect he replied:
Weeds have always had to fight. and
they have never been improved BY
hybridization and through chance
mutation we have made improvements
and selections in cultivated plants.
striving for certain results. But We
can't have everything. Some of the
new flower strains developed for their
blossoms actually lose the power tc
reproduce"
1t might be well to give some
thought, in our efforts to make over
the general scheme under which
business has long been conducted,
to the apparent law of nature that
overrefinement results in weakening
the organism. Business, no less than
weeds. has developed a robust ron-
stitution because it has also had to
fight for a living. One of its
weapons has been competitive
prices" 1t has overplayed its hand
in that respect very often. using
legitimate competitive weapon in a
cut-throat manner.
But even virtue may become a
vice. if it is carried to excessive
lengths. Because our free system of
pricing has been abused is no reason
why prices should be put in strait
jacket by legislative action. We don't
want the rank, weedy growth of those
who get the upper hand in ruthless
price competition, neither do We want
to turn business into a hot-house
plant so weak as to require constant
watering by the pump printing"
method and stimulation, perhaps, by
Government subsidy.
1t would seem better to have a
business organization that is capable
Of standing on its own feet and TAX
ing a bit of competitive buffeting.
Government, as umpire, may bar hold
ing and hitting below the belt and
all tactics not conducive to fair COM
petition and on equal chance in the
ring. But, unless We want to raise
a crop of business weaklings, We
must permit the contest to go to the
concern that has the most steam"
Embellishments Corrected.
On the much discussed subject of
prices, DR.. Benjamin M. Anderson, jr,
economist of the Chase National Bank,
says some pointed things. He believes
that if prices move promptly and un-
restrainedly, moderate price changes
will usually rectify a maladjustment
before it has gone very far. He says:
The function of price changes is
to bring about the necessary shifts of
labor and capital from one industry
to another, to check excessive con-
sumption in one line, to lead to in
creased consumption in other lines. to
keep goods moving through the mar
kets, making way for other goods to
be produced to replace them and thus
to keep business active and keep full
employment. Right prices, from
this functional point of view, are prices
that move goods, right wages are wages
that give full employment to labor,
right interest rates are interest rates
which equate the supply and demand
for capital, keeping a proper balance
between savings and consumption, and
so on. High or low prices and interest
rates are not good or bad in them
selves, but they are good or bad de-
pending on whether they reflect the
facts in the situation.
Federal Attitude Differs.
But governmental attitude toward
prices runs on radically different lines.
When governments touch prices they
touch them from the standpoint of
the notion of just price rather than
from the standpoint of the notion of
functional price. 1t is the essentially
medieval notion of just price which
dominates both juristic tradition and
present day governmental policy, when
government touches prices at all.
Higher prices at which little
can be produced and sold do not mean
economic welfare even for the group
that gets them"
In many consumer lines, of course,
there is priceless ingredient" which
defies the price cutter. There are
things We want because we want them.
Vice President Barker of Sears, Roe
buck & Co. says that "in the choice
and purchase of style merchandise,
emotion is dominant" No woman