Toledo union journal. [volume] (Toledo, Ohio) 1942-current, 1949-06-03
BY Nathan Robertson

WASHINGTON (LPA)-A
sef hlibi for the unprecedent-
edN sSfits big business is en-
joying has come from Senator
Ralph E. Flanders (R., Vt),
as the result of his Senate in
vestigation last year into the
profit situation.
In an article written for Ma
tons Business, Flanders in
ferentially admits that Cen
eral Motors profits are too
high but naively defends
them on the ground that if
GIN cut prices, or raised wages
to curtail its profits, it would
drive its competitors out of
business and thus become
more of a monopoly.
Admitting that GIN could
cut prices and "still enjoy a
prceit range which would not
be Unsatisfactory" Flanders
asks why it should not do so.
Answering the question, he
says:
II do not read the mind of
management but l can ina
CINE that they have, as would
in their place, some concern
about being too successful.
Should they lower their prices
to a point where competing
car Builders not meeting the
prices found it impossible to
operate profitably, they would
go Gown and GIN would go
up. The fact that for more
than ten years the corporation
has kept its share of the total
production at around 40%
would seem to indicate that
management does not think
it wise from a public relations
stasSpoint to grow very much
la sP, relatively to the rest
of the industry even though 1T
might be entirely possible to
do so.
"Another social service the
orporation might p e r o m
would be to raise wages. Well,
why not raise wages? 1t could
probably pay higher wages
than its competitors and still
remain in a desirable profit
position. But again the sub
ject of relative size comes into
the picture. Should GIN raise
wages, there would be every
expectation that the unions
would insist on the same wage
scale being carried through to
the independent companies,
which would have lower
margin of profit to cushion
til eaimpact. They would thus
be force to raise prices,
which again would handicap
the independents tending to
make them smaller while the
CORPORATION grew larger" F."
Flanders explanation of the
situation gives us new pic
ture of the duPonts, who con-
troll GIN. We had always
thought, in the light of their
record in dupont as well as
in GIN, that the duPonts were
rather 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 grabbers, that they
really would like to raise
wages or cut prices, but that
the situation has got out of
r hands-they are just too
successful to be able to con-
troll their profits without hurt
ing the little fellows.
Of course this doesn't quite
iibe with the story of their
monopolistic maneuvers with
German cartels before the
war, which was developed in
the Senate Investigations l
covered. And it doesn't quite
iibe with the story of their
story of their profits during
the first world war, which |
also covered. AS l recall it
now, they refused to build or
manage an ammunition plant
the government badly needed
until they were given a con-
tract which the government
considered extortionate, But
maybe they've reformed and
maybe Flanders is right.
Seriously though, despite
this almost unbelievable chari-
ty toward big business, Flan-
ders' article, addressed to
businessmen, had some good
points. He noted the figures
showing the alarming growth
of big busin e SIS and the
dangerous merger movement
since the war. He also, as an
experienced businessman him
self, noted the possibility that
where an industry is control
led by three or four big COM
panies there is always danger
of an unhealthy "live and let
live" attitude, in place of COM
petition.
when one, two, or any
small number of producers
dominate the market for a
ven product" he said, "there
% always the possibility that
an unhealthy situation may
develop even though there is
80 oo1Incioo opoopo fbaoo OY