Evening star. [volume] (Washington, D.C.) 1854-1972, 1946-01-31
Strike Wave Seen
In Small Businesses
Writer Sees Firms Endangered
by Is Per Cent Demands
By David Laurence


The Nation soon will be able to test
whether the settlement of the strikes in
the steel and auto industries will mean
the beginning of industrial peace or the
start of new wave of strikes with much
more intensity than those of the past
few weeks.
The reason forsthe fear that period
of even more unrest may ensue is that
the settlements in motors and steel will
necessarily be reflected in other indus-
tries. The fact that the Presidents
Fact-Finding Board in the General
Motors dispute said that increases OF
Is per cent or more were to be given
will encourage the filing of demands
on every side. Disputes will increase in
number, though involving smaller
groups OF employees.
Small businesses which are unable to
pay increases will find themselves con-
fronted with the demand for the Is to
Is per cent rises in wages and many will
be unable to stem the tide. Some of
them viii face losses which Uncle Sam
will have to pay in the form of carry
backs on last years excess profits taxes
Others will not wish to risk further
business operations and will be COM
PEELED to close down, thus producing
unemployment.
Profits Better Than Refunds.
The carry-back tax provisions have
been widely misunderstood. Nobody can
use them unless the company actually
loses money. 1t seems far-fetched to
assume that any of the major COM
panies which will settle their labor dis
putes some time this year are expecting
to 60 below the break-even mark. As
Maurice Austin, chairman of the Com
mittee on Federal Taxation OF the
American Institute of Accountants, said
the other day:
ut cannot be emphasized too strongly
that the carry-back provisions do not
have the effect of making it profitable
not to make money, or to lose money
merely for the sake of getting carry
back refunds. Notwithstanding all the
tax refund provisions, it still remains
true that a corporation makes more
money by making money than by not
making money"
Something far more injurious Is in
volved If smaller companies are forced
to the wall by being unable to pay the
current demands for wage increases.
Every time a small company is put out
of business, a large company swallows
up his customers trade and becomes
bigger thereby. The element of COM
petition is less and less present when
small business is strangled.
Power Still Available.
Will the administration stand by and
let an epidemic Of small strikes tie up
the economic system? That will shortly
be an acute question. For it is growing
apparent every day that the demand for
a Is or is per cent increase Is being taken
up by union organizations on almost
every side and that a wave of more
strikes is in prospect.
The government has the power under
the present sterilization law to reimpose
wartime controls and to bring order out
of chaos if this should be the result of
the readjustments made in the major
industries. The wage and salary stabili-
cation units of the government are still
in existence, and it may be that the
President will find it necessary to in
crease their personnel and issue a new
executive order requiring government
approval for all wage increases arrived
at by collective bargaining. At present,
approval is required only for those in
creases which cannot be absorbed by
the employers without resorting to price
rises.
Some machinery to prevent the ex-
hausting process of an almost unending
series of labor disputes is needed if q
Is per cent wage increase is to be put
into effect generally. Otherwise, the
public may continue to be subjected
to the painful necessity of enduring all
sorts of work-stoppages while manage
ment and labor in business after bust
ness effect wage readjustment.
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