Evening star., 1941-06-27

In a forecast of what the country
may expect if Congress is persuaded
eo delegate price-fxing to a govern
mental bureau.
Without hearings and without
regard to the fact that one price is
permitted for some manufacturers
and another price for another set of
competitors certain auto makers
were asked to withdraw their ad-
vsnces in price for the models
winding up the present auto year.
The amount involved is very small,
but the principle is very big.
The prices of the automobiles
now on the market were made last
September. They provided for a
profit margin of s30.47 per car in
the case of one OF the manufac-
turers in question. Nonchalantly
and without regard to the effect on
costs the Roosevelt Administration
through the National Defense Medi-
alton Board approved wage ad-
vances which together with other
material costs increased on June 4
the total cost by $27.55 per car.
Thus did one branch of the Govern
rent virtually wipe out the profit
while another refuses to allow the
manufacturer to absorb the in
creased costs by raising the price.
This means that the Chrysler
Corp, for instance, on the basis of
about 100000 cars which the o. Pm.
will allow it to make next year
would have profit of about ST.
100000. This is return of little
more than l per cent on the 1885,
100000 of capital invested in the
company.
Denounced as Profiteers.
The moment the Chryler officials
objected, a breakdown statement
was issued which denounces them
as profteers. Yet this same cor
poration has just finished building
q plant costing the Government
s20000,000 and the total fee charged
by the company for its management
and its designing and engineering
was exactly So. Also, it is revealed
that out Of S31,000,000 of defense
contracts in another group of
plants, the Chrysler Corp. made a
profit of sl3,295 or about one twen-
ty-ffth Of l per cent.
The amount involved in the
price increases is only about
100000, whereas the payroll in
crease forced on the Chrysler Corp.
by the action of the National De-
fense Mediation Board this month
amounts to about Sl2,000,000.
If production is curtailed next
year, prices will have to be ad-
vanced because, as the number of
ears made diminishes, the cost per
ear increases so the figure given
sbove of $1,s00,000 profit is purely
theoretical and 1t is more likely
that refusal TO permit price in
creases will mean operations in the
red for all auto companies.
The justification given by the
governmental agency dealing with
price fixing is that imitation must
be prevented but 1t will take
good deal of explanation to tell the
people why the sanction of higher
prices to one group of manufac-
tsrers doesn't prevent imitation
while refusal 10 sanction advances
by other csr-makers starts inf1a-
ton. The imitation spiral was
started by the President himself
when he permitted the National
Defense Mediation Board to settle
the General Motors strike with a
10-cent-an-hour wage increase.
Now it is apparently going to be
taken out of the investors, which can
only mean losses for those who have
put their savings In automobile
companies.
q. 6. Loses on Taxes.
Fae paradox Of the situation Is
that the price rise of $4,000,000
would have meant under present