Evening star., 1938-07-14
SURVEY DEFENDS
B|GBUS|NESSUN|
Brookings Institution Study
Says Large Combines
Aid Consumer.

broOKlngS INSTITUTION To-Day mace
public q report defending in general
large industrial combinations as aids
to the consumer and small business
man.
- Competition has not declined with
the growth of huge corporations. the
report declared. These great corpo-
rations, it was asserted, were formed
largely for the purpose Of effecting
economies and promoting efficiency
and most of them actively seek to
broaden their market by giving the
consumer more for his money"
! The percentage of the Nations in
: dustry controlled by big business"
{ the report said. was found not to
> have increased perceptibly in recent
2 decades, despite the merger movement
) Of tn 20s The report placed about
$ 10 per cent of industrial output under
. such a head, which is about the same
: percentage as prevailed at the turn
: Of the century.
: O'Mahoney Comments.
4, Chairman OMahoney OF the Gov
= ernment Committee just now launch
a ing an inquiry into monopolistic busi-
/. ness practices welcomed the Brookings
q report as being contributory to the
!, mass Of information which his group
: will study.
= The purpose Of our inquiry" he
:. said, lis to get the facts and then draw
: conclusions. This report on industrial
= price policies and economic progress is
!. evidently study of part Of the field
- to which we will give attention"
. Price Making Methods.
The report, entitled Industrial
Price Policies and Economic Progress"
was based on a study made by DR..
= Edwin G. Nourse, director OF the In
= stitute Of Economics, and DR.. Horace
B. Drury, member Of the stan. 1t
4. continues the general line of investi-
= CATION Of income distribution in
: relation to economic progress which
d. was begun by the institution about
" five years ago Case histories OF many
, corporations, large and small, were
studied
Methods OF industrial price-making
have undergone drastic change since
the days when prices were fixed by
direct market bargaining, the report
said, but the change has not reduced
competition
Modern competition may be more
beneficial to the people than that OF
earlier times, inasmuch as it develops
new and better products. raw mate
rails, and ways Of satisfying human
wants, rather than being concerned
solely with price" it was pointed out.
High Prices Hopeless.
Competitive conditions of today are
such that maintenance Of artificially
high prices is virtually hopeless, it
was stated. The price-fxing power
OF so-called monopolies has clearly
diminished" and even If a firm has
an effective monopoly Of q particular
product, lit is likely under modern
technical conditions to meet keen
competition from other products that
satisfy consumer wants in different
ways" the report continued.
Commenting on the tendency to
transfer more and more social-eco-
nomic responsibility to Government
agencies, the economists suggested
that industry might be able to carry
the burden for continuous employ
ment more effectively because of its
better handling of Its pricing ap-
proach."
The magnitude of the task the re-
moteness and inflexibility of public
agencies and the susceptibility of such
agencies to political manipulation.
the report said. tend to impair eff
cient and economic functioning of the
productive and distributive system"
Summary Of Report.
A summary Of the report, released
by the institution, follows in part:
Large corporations occupy an i'm
portant place in modern industry, not
alone because of the technological
need for large units of equipment, but
also for economic reasons. A company
must have large financial resources
and furnish fraction Of the product
large enough to be q significant factor
IN the market if it is to set the pace
In price-making. Far-seeing and
courageous price-making has made
the enlightened business executive the
most important factor in the function
Ing Of the modern economic system.
over large section of industry,
production Is keyed to prices set in
advance at a point computed to be
the most effective in expanding the
sale OF goods. The extent to which
economic progress is promoted depends
largely upon the pDmptness and
completeness with which prices reflect
the progressive improvements in tech
nological processes. Radical changes
OF both product and processes, making
lower prices possible, have become
Characteristic of the operation of the
most progressive industries.
The struggle between the three
largest organizations in the automo-
bile field has set the high mark OF
useful competition thus far. Pace
makers in the competitive struggle
also include the leading chemical
companies, the large mail order houses,
food chains, electrical manufacturing
concerns and many others.
Direct to Consumer.
price competition is most apparent
among companies selling direct to
the Anal consumer. But If the people
are to get full benefit of our industrial
system similar price-making practices
must be adopted throughout the va
rious industries whose output goes
into these products in their earlier
stages--the so-called heavy industries.
Companies which have been able to
assume large overhead expenses to
maintain competent technical and
managerial STATS have usually been
In the van Of price reduction. But
the cost-lowering influence of large
scale production has been felt far be-