The potters herald. [volume] (East Liverpool, Ohio) 1899-1982, 1949-06-02
By NATHAN ROBERTSON

| washington (LPA)-A new allDl
for the unprecedented profits big
business is enjoying has come from
Senator Ralph f. Flanders Or,
VT, as the result of his Senate in
vestigation last year into the pro
fit situation.
In an article written for Nations
Business, Flanders inferentially adj
mits that General Motors profits
are too high but naively defends
them on the ground that if GIN cut
prices, or raised wages, to curtail
it's profits, it would drive its COM
petitors out of business and thus
become more of a monopoly.
Admitting that GIN could cut
prices and "still enjoy a profit
range which would not be unsatis-
factory" Flanders asks why it
should not do so. Answering the
question, he says:
81 do not read the mind of man
agement but | can imagine that
they have, as would in their place,
some concern about being too sue
cessful. Should they lower their
prices to a point where competing
car builders, not meeting the
prices, found it impossible to oper-
ate profitably, they would go down
and GIN would go up. The fact that
for more than ten years the corp
oration has kept its share of the
total production at around 400
would seem to indicate that man
agement does not think it wise
from a public relations standpoint
to grow very much larger relative
ly to the rest of the industry even
though it might be entirely pos
sible to do so.
"Another social service the corp
oration might perform would be to
raise wages. Well, why not raise
wages 1t could probably pay high
er wages than its competitors and
still remain in a desirable profit
position. But again the subject Of
relative size comes into the pic
ture. Should GM raise wages, there
would be every expectation that
the unions would insist on the
same wage scale being carried
through to the Independent com
panies, which would have a lower
margin of profit to cushion the inn
pact. They would thus be forced to
raise prices, which again would
handicap the independents, tending
to make them smaller while the
corporation grew larger"
Flanders explanation of the sit
uation gives US a new picture of
the duPonts, who control GIN. We
had always thought, in the light of
their record in DUPONT as well as
in GIN, that the duPonts were rath-
er fond of profits, for the sake of
taking in the money. It's nice to
realize, at last, that they aren't
really monopolistic money grab
bers, that they really would like to
raise wages or cut prices, but that
the situation has got out of their
hands-they are just too success
full to be able to control their pro-
fits without hurting the little fell
lows.
OF course this doesn't quite jibeI
with the story of their monopolistic
maneuvers with German cartels be-
fore the war, which was developed
in the Senate Investigations | COW
cred. And it doesn't quite jibe with
the story of their. profits during
the first world war, which | also
covered. AS | recall it now, they
refused to build or manage an
ammunition plant the government
badly needed until they We're given
contract which the government
considered eXtortionate. But may
be they've reformed and maybe
Flanders is right.
Seriously, though, despite this
almost unbelievable charity toward /
big business, Flanders article, ad
dressed to businessmen, had some
good points. He noted the figures
showing the alarming growth of
big business and the dangerous
merger movement since the war.
He also, as an experienced busi-
nessman himself, noted the possi-
h. md ctt &c
controlled by three or four big com
panies there is always danger of
an unhealthy 'live and let live" at
titude, in place of competition.
when one, two, or any small |
number of producers dominate the
market for a given product, there
is always the possibility that an
unhealthy situation may develop
i nDIl,,r.n,,