The Washington times., 1938-01-08
PerpleXity

several other tnln9S news we've read recently
was the story in yesterdays papers of William S.
Knudsens appearance before the Senate Unempoy-
ment and Relief Committee
Mr.. Knudsen, president of General Motors, was
called to testify about the recession with special ref
erence to General Motors recent Iayoff of 10000
because of sharp slump in December car orders.
Two economic PHILOSOPHERS came into head-on col
lision at the hearing-he philosophy of production
for profit and the philosophy of production for
Knudsens feeling was that General Motors might
just well shut up shop if it couldn't end each year
in the black. Some Of the examining Senators Won
dered if General Motors ougtnt to have kept those
men at work by cutting into its surpuses for their
wages and cutting its prices to sell the they would
produce.
We can't go along with those who urge that Gen
eral Motors should cut out dividends and abolish
pluses to keep at work when people have slowed
cunn1v down on car purchases. What would such
apocv lead to?
: De"'""" Hundreds of thousands of cars would
be produced If they sold at cut rates such sales
would only postpone the next slump IN car buying
If they weren't, they would overhang the mar
ket until buying should pick up and then the selling
of them would prevent employment of to
supply demand would catch up with General
. Motors sooner or later
The instant retort Of the productionforuse people
is: "Socialism! Make the goods and pass them
around (which sounds nice and generous and ideal
j. istic But Socialism has now had twenty years trial
in Russia and the known results convince people to
whom Communism is not a religion that the Russian
masses are worse off than the masses in any modern
capitalist country
It is the great riddle of our age this paradox of
plenty, this seemingly eternal round of overproduc-
tion compelling layoffs and reducing mass buying
r,,n1 ~ power We don't know the answer;
if we did, we'd overshadow all the
OHggeStIO"S economists of all the ages.
Here are couple of suggestions, though, from lay
men who never made or sold automobile for what
they may be worth.
We think the motor companies might ask themselves
whether there may not be a market, yet
tapped for cheaper than today's cheapest Per
haps such could be made, if the emphasis put
on the 'guts' of the and the luxury gadgets and
fancy upholstery left off. To repeat don't know;
we merely suggest that such cars might find mar
ket. If they did, they would make motor-fac-
tory jobs and would step up demand for steel, glass,
rubber etc.
Mr. Knudsen himself said at the hearing that his
company considers excessive instalment buying of
cars danger to the industry. To U.s. that seems un-
keep it under control
One notion urged by some thinkers seems absurd to
us-he notion that individual corporations should be
charged with the duty of taking care of all their
Ho,, Coyo For employees through thick and thin,
good times and bad.
AH2 JOO'eSS' The answer to that is simply
that they won't do it. They won't do it because they
can't. General Motors for example, does the best it
can by cutting its work week from forty to twenty
four hours in thin times-another evidence that the
forty-hour week is too short, and that we may
eventually come to a universal thirtyhour week. But
for General Motors to cut its week below wentyfour
hours would to throw all its mass-production
workers thus retained below decentsubsstence level
of pay.
We're convinced that it is the job of Government
to take of those thrown out of work when over
production forces ayofs. To perform that duty the
Government has to tax the producing corporations
through good times and bad. On that point we feel
no perplexity at ALL
From News