Evening star., 1938-01-03

sudden develop Nj, ,,u,.n,.
ment--it is nee
essary to recall that, beginning last
spring, warnings were issued by Gov.
Eccles of the Federal Reserve Board
and by the President himself that
prices must not get out of line.
Mr.. Roosevelt, in his message to
Congress last November, called at
tention to what he deemed had been
for several months the key to the
Nations economic future-the "busi-
ness pricing policies"
Now maladjustment has come.
Business men of prominence have
said it is the administrations zig
tagging course which has upset con-
fdence, that the let-nature- -take-its-
course doctrine should be revived,
that government should remove the
restrictions except for fraud and dis
honesty and let the economic machine
move forward.
Philosophy Is Rejected.
The administration does not accept
that philosophy. 1t holds rather that
business had its chance to adjust
'dlvidualism ran rampant, that wage
increases were passed on to the pAolic
in too great measure, that prices
were fixed and forced upward and
that, generally speaking, the whole
economic structure has become mall
adjusted because it has been un-
regulated.
What to DO? The administration
propounds this query: Shall business
men fix prices or shall the Govern
ment do it? There's another course
quite possible-that neither shall
exercise completely the price-fxing
power, but that limits shall be ap-
Piled through Government regulation.
This correspondent is not approving
or disapproving the economics of any
of these plans. but believes it essential
that the public shall understand the
impaSse which the administration
conceives is at hand. One may put
aside the Jackson-Ickes speeches as
merely collateral bits of bombardment,
somewhat overdrawn and exaggerated
in the very nature of things because of
their vehemence. but significant
nevertheless of broad sort of STRAIT
ecy on the part of the administration
to create background on which pub
lie attention can be sharply focused.
Thus it is not simply fight against
monopolies-this has been going on
for so years-but modernization of
the monopoly question that the ad-
ministration is seeking to bring forth.
When it is recalled that nearly every
one of the administration measures
has been projected on background
OF Senate Investigations and reyela-
tions or a series Of public addresses
with sharp attacks and one particular
objective in mind, the importance of
the series of speeches in recent weeks
dealing with combinations of business
and price-fXing becomes clear.
Cummings Makes Accusations.
Thus the Attorney General, Homer
Cummings, who speaks and writes in
moderate terms and Notwithstanding
the sniping by the left wingers, re-
mains one of the most important of
the Presidents advisers. delivered a
weeks ago before the Associated Groc-
cry Manufacturers, In that speech
Mr.. Cummings asked why when the
Government bought certain commodi-
ties the bids were identical almost to
the cent.
Nobody in the business world has
publicly answered the accusations
made in the Cummings address.
Now it will be conceded that the
Supreme Court of the United States
has ruled that it is no sin to adopt
competitors price and it will be ad-
mitted, too, that ever since the Rob-
tnson-Patman law was passed there
has been tendency to make identi-
cal prices for large bids because it
never was quite clear whether it was
safe to quote to the Government any
lower prices for large quantities than
were being extended to private GUS
toners who bought substantial guam
titles. 1t is not necessary here to go
into the details whereby prices have
become somewhat standardized in va
rious industries. Suffice 1t to say that
the Government of the United States,
now being controlled by the Roosevelt
administration, is about to insist that
any such Standardization must under
go certain economic tests and that the
public interest demands Government
supervision rather than indifference
to such price-making practices.
Prepare to Fix Ceiling.
But, the business man will inter-
5ect, If labor insists on higher wage
and 1t Is very costly to engage in a
strike and less costly to accede to Ia.
bor's demands, how can the Govern.
ment blame the manufacturer fol
passing on the price to the consumer:
Gov. Eccles of the Federal Reserve
Board has not hesitated to say pub.
licly that labor costs pushed up un.
duly have been considerable factor
In price rises. How then to handle
labor?
The administration is driftins
toward the price-making theory or
the assumption that If ceiling i!
put on certain basic prices in Ger.
tain key industries. labor will have t.
confine its collective bargaining ne
gotiations to the area within which
there is f1exibility. if any.
All this presupposes q central eco
nomic mechanism of regulation.
Broadly speaking, the administra
tion considers its policies temporar,
in the sense Of few years of emer.
gency until the world shall agar
restore trade gross volume to tn,
heights reached before 1929 and unit
public opinion everywhere is ready fo
lower tariff barriers and more inter
national intercourse.
Control Was Apparent.
For several months it has been ap
parent that controls of some kins
were coming to industry and tha