Evening star., 1938-04-30
May Expect Disagreement.

1leTe Will De QlI1eIenC6S OF opinion
about the validity Of the Presidents
argument about concentrated control
or the opportunities for efficiency that
can come if all large units are broken
up and decentralized.
we all want efficient industrial
growth and the advantages of mass
production" says the President, but
then he adds that modern efficient
mass production is not furthered by
a central control which destroys COM
petition between plants, each capable
of efficient mass production While op-
Grating in separate units"
If Mr. Roosevelt is right, then large
business corporations have really been
inefficient. They should have scrapped
some of their plants and bought from
independents or separated units. 1t
may be doubted whether the present
low prices to consumers could be
maintained by breaking up our pres
ent mass production industries, but
thorough inquiry. in which business
will present its side, no doubt will dis
close the facts.
Bureau Suggestion Good.
One of the best suggestions the Pres
ident makes is related to the estab-
lishment of a bureau of industrial
economics for business analogous to
the well-developed Bureau of Agrlcul-
tural Economics, which exists for the
farmers use. The Department OF
Commerce has never been as inten-
sively developed under the present ad-
ministration as it should be and much
of the statistical information that
business needs to help it understand
economic trends would be forthcom-
ing quickly if new bureau were es-
tablished to do the job
Confidence in Government data.
however, needs to be rebuilt. Lately
there has been much manipulation
for political purposes. Even the
memoranda on which the President
apparently based his message contain
some misleading statistics. Take, for
instance, the statement that one-tenth
of ! per cent of the corporations own
So per cent Of the assets of all cor
porations or the statement that one
tenth of ! per cent Of all the corpora
tions earned so per cent Of the net
income of all of them. This sounds
very interesting, but the reader is
not told that the number of corpora
tions has no real relationship to the
operations of business or the scope
of It's activities. There are literally
thousands of paper corporations and
thousands of inactive corporations
which help to make up the statistical
total, numerically speaking but have
little to do with the active business
Of the country.
1t is fact that about 10000 cor
porations do about 80 per cent of the
business of the country, but it is also
q fact that there are not more than
$500 companies in manufacturing
which employ more than 500 men
each. OF these only 178 employ more
than $500 men.
Handicapped in Capital.
What is lacking for competitive pur-
poses is capital for the small business
man so as to enable him to start real
competition with the larger units.
The Government cannot supply this
capital and it usually has to be OBJ
tained by a pay-as-you-go system.
Government could ease the way by
certain tax credits as an incentive
When it comes to prices and costs,
the small business is forced to pay
wage scales which the employees of
larger units dictate While there is
much sympathy with the Presidents
idea of minimum wage as a matter
Of principle. Mr.. Roosevelt does not
take into account that competitive
system in which wage rates are frozen
and permit of no flexibility is one in
which the area of allowable compe-
tition is being gradually diminished
Freight Rates Big Factor.
Thus the freight rate is fixed by
the Government and is big item
in prices, certainly the controlling
factor as between some sections of
the country. Then wage scales are
also fixed by collective action of
unions or groups. When minimum
wage rates and maximum hours are
fixed and the overtime rate is also
proclaimed by law. the items left
for fiexibility in price will be mar
rowed still further
All this is worthy of study, but
there is something else that ought
to be studied at the same time, and
that's the concentration of political
power in the hands of the few, not
merely in our large cities but here
in the Federal Government. For in
the National Capital we have not one
tenth of l per cent of the popula-
ton in control of the destinies of
the Nation, but much smaller part,
probably not more than so persons
In all.
(Copyright 1881 u