Detroit evening times. (Detroit, Mich) 1921-1958, 1941-10-10
Quick Action
On Control
Bill Needed
johnson Hits Ceiiinq
Over Profits
BY HUGH S. JOHNSON

4" r YOU put a ceiling over
prices; especially II you put
one over wages and farm prices.
You will have TO put n ceiling
over profits of business"
This is one great bugaboo that
is holding up anti-inflation leg
Notwithstanding h
every important authority, new
dealer. old dealer or middle-of-
the reader, has testified that
initiation is the most dreadful
danger that now confronts our
people.
In furtherance Of that threat
we hear in war there shall he
no profits" We see bills intro
duced limiting business profits
10 6 per cent capital investment
and other similar balmy luna
cieS.
Look at them more closely
and you will find that they are
largely a confusion of terms. ut
tered mostly by politicians who
either don't know or don't want
to know what they are talking
about.
What is Ceiling ever.
prices, including wages or farm
prices? IL is no caStiron restric-
ton II doesn't reach back and
reduce any price. II simply says:
These increases have gone
high enough. They shall not 20
any further upward without a
showing. I'm the case of wages,
that increases in the cost of liy-
ing justify IL or, in the case of
farm prices, that they have not
reached the Compromised goal
of 'parify'-fair exchange value
In terms OF the prices of the
things the farmer buys"
THAT In itself is a flexible
Il rule. For, just as labor
wages wifi 20 UP as fast rs tire
cost OF living goes up. So tflse
will the price of the things the
farmer sells 20 up as fast as
the price Of what nc buys.
That is the ceiling" plan as
II applies 10 labor and agricul-
ture. AS il applies 10 business.
prices can go up but only whore
for some special reason and for
its own purposes government
permits them to 60 up. In a
certain degree no further.
But that is not what the
opponents OF price ceilings pro-
pose when they say there must
also be a ceiling over profits
say 8 per cent on invested capi-
tai. That doesn't propose a
ceiling over profits as of Ger
tain day II proposes to reach
back indefinitely on an arbitrary
rule or no rule at all and. for
most new and small enterprises.
TO point that would bankrupt
most of them and on most old
and highly CAPITALIZED and
powerful monopolieS or great
corporations 10 set a limit
higher than most OF them have
enjoyed for a long. long time.
Wages have been going up.
prices have been going up 20 a
point where the beginning Of a
robust initiation is already here.
But generally speaking net
profits, whether figured as a
percentage either on investment
or sales. and regardless Of null
tiplied businesses. haven't been
going up. Mounting state. local
and federal taxes have taken 30
large a portion OF them that net
advances in profits have been
prevented.
THE new tax legislation will &C.
Il tually reduce them. Govern
ment hasn't taken 10 per cent
10 so per cent out Of wages and
farm prices. But it has or
shortly will take as much rs
that out of profits.
There is hardly a voice in this
country raised against the Slo-
gan Take by taxes all profits
due TO war" We are doing that
and we are going to do it
further.
But that is a very different
thing from this new slogan In
war. take all profits
That simply ruins the capital
istic system and our plan Of free
enterprise. II is creeping COM
muniSm or naZism.
Ii would be as sensible rs 10
say: Don't put reasonable
limit on high wages and farm
prices due to war 10 prevent in
fation. But in war take all
wages and conhscate all farm
products.
1t is high time TO get quick
and common sense action on the
price-control bill.
HE NEWS: