Evening star., 1938-01-07

OF prices ana pro- 8##$% e!s:::::
duction.
The Jackson ,
1ckes addresses
were carefully timed to arouse the
public against private price fixing. 1t
was intended to show the abuses of
private power as it is supposed to be
exercised under our present economic
system. But when Mr.. Roosevelt, in
his press conference, spoke of having
businessmen sit around the table with
Government, he did not intend any
body to assume that he was going to
allow private price fixing by those
who sat in conference Certainly if he
did it would be an Inconsistency in
his position.
The administration is convinced that
price control Of some kind is inevitable
if America is to keep from having
sudden drops in business volume such
as the recently begun recession has
developed The present mechanism
for making prices is held to be mix
ture of monopolistic practices and
competition and with no coordination
by anybody for fear of coming into
collision with the Sherman antitrust
laws with their various judicial inter-
pretations extending over a period
OF nearly so years.
Must Be Limitations
The administrations idea is that
there must be some price limitation.
The principal advocates of the plan
do not say this means actually fixing
the prices but merely putting limits
beyond which prices of certain basic
commodities shall not go.
Since the public is not likely to
permit private price fixing, the only
other instrumentality LEFT, of course.
Is the Government itself BY sitting
around in conference with business
men in each industry ideas would be
advanced in round-table fashion, but
the decision would be that of the
Government itself
There are other plans, to be sure
which are discussed from time to time,
such as giving a public utility status
to important basic industries and reg
ulating their profits or rate of return
on investment somewhat as is done
with electric light and power COM
panies. The assumption is that in
basic materials derived from natural
resources in the first instance the ele-
ment OF price fixing between groups
Of marketing corporations is related
solely to a narrow list of items and
that hence the manipulation of prices
Is easier than in other productive
enterprises where the elements enter
ing into the price may vary con-
siderably.
Just how is the Government to ac-
quire the power to control or regulate
basic industries? Isn't it unconstitu-
tional? The Supreme Court of the
United States has said that rather
broad power is vested in the Federal
Government to say what industries
can be clothed with or affected with
. public interest"
Extension Of Power Seen.
With the liberals" in complete con-
troll Of the Supreme Court now, there
need be little doubt as to the gradual
extension Of the Federal power to in
clude whatever regulatory authority
may be needed to afford protection
to interstate commerce.
The real question is how the Fed
eral power is going to be exercised and
what legislation will be sought so as
to cover the problem of price control.
The mistake of the N r. A. was in
trying to do too much at once The
next time the administration attempts
control of business. the effort will be
limited to few basic industries in
the hope of getting planned pro-
duction" first and price control second.
All this necessarily means Govern
ment regulation of labor unions. not,
OF course. in any way intervening in
their own affairs so far as admins
tration or organization is concerned.
but in the use they may seek to make
Of their economic power.
In many industries, for example.
labor costs are so much of a factor
that they almost control the price.
1t IL incredible that the administra-
ton would be thinking of price control
without taking into consideration the
importance of regulating labor's de-
mands. Labor may not like this, but
= hint of what is coming was given
In the Presidents message to Congress
this week about the misuse of power
by large groups and also in his press
conference the next day when he re-
ferred to the importance of co-opera-
ton by labor as well as capital.
Organized Economy.
What the administration is seeking
is not exactly controlled economy but
an organized economy 1t believes
that an organized democracy is nAes-
sary If world conditions are to be
battled with by the American people
and the more drastic controls of
Faclsm are to be avoided
The businessmen of the country NAV
think of "co-operation" in terms OF
an equal voice by them at the con-
ference table. but what is intended
really by the administration is that
labor and business shall come into
conference and Government shall
have the deciding voice as to what
each or both should do in order tc
increase employment, keep prices dowr
and develop a fair return for capital
invested and for labor.
Not the least Of the subjects being
discussed behind the scenes is the
problem OF allocating volume within
an industry so that limits are placed
on bigness and 50 that marginal pro.
ducers or business are not placed al
q disadvantage because of the large
surpluses or larger capital sums in.
vested in big business. The admin.
istration is getting ready to argue
that what America needs Is "stabil.
lied profits" and that the very I'm.
certainties Of which business complains
will be removed by the exercise O.
governmental power to assure con.
tnuity OF production and planning.