Dollar Men & Prices

The great auditorium of the 817,500,000 palace which Herbert Hoover built for his Department of Commerce was jammed to the doors one day last week. Elbow to elbow sat 2,000 businessmen eager to say their say about whether NRA should permit or forbid price fixing and price control. On the platform presiding over the meeting were Samuel Clay Williams, Chairman of NIRB; Arthur Dare Whiteside and Sidney Hillman, both NIRB members, and their associates.

Marked down price tags were all but visible on the lapels of this trio. Not only had they cut the price of their services to the Government to $1 a year, but they had allowed the Government to bargain them down still more. Because of the 5% Federal pay cut still in force, their annual pay checks came through for only 95-c-. The 2,000 businessmen present might have applauded their hosts if this fact had been called to their attention, but they were by no means ready to applaud when Chairman Williams told them plainly that, unless they could prove it would damage business, NRA was going to put an end to price control. Said he: ''Greater productivity and employment would result if greater price flexibility were attained."

Pros. Of the 2,000 businessmen on hand probably 90% opposed Mr. Williams' aim. To them a guaranteed price for their products looks like a royal road to profits. A fixed price above cost has proved a lifesaver to more than one inefficient producer. Lazy producers have found that a fixed price, below which their smartest competitors cannot go, leaves them more time for golf than when they have to spend long hours at the office wracking their brains for ways to hold their markets. In fact, to most manufacturers guaranteed prices promise heaven on earth so long as the public does not find such prices a barrier to buying. Hence man by man, hour by hour, Business rose to argue and protest against what NRA proposed. The substance of the argument was put on its highest plane by George A. Sloan, head of the Cotton Textile Code Authority: ''Maximum hours and minimum wage provisions, useful and necessary as they are in themselves, do not prevent price demoralization. While putting the units of an industry on a fair competitive level in so far as labor costs are concerned, they do not prevent destructive price cutting in the sale of commodities produced, any more than a fixed price of material or other element of cost would prevent it. Destructive competition at the expense of employes is lessened, but it is left in full swing against the employer himself and the economic soundness of his enterprise. . . .

"But if the partnership of industry with Government which was invoked by the President were terminated (as we believe it will not be), then the spirit of cooperation, which is one of the best fruits of the NRA equipment, could not survive."

Antis. Few were the businessmen who made a counterplea for the privilege of price cutting. Two of them were representatives respectively of a prosperous firm and a prosperous industry which have thrived on price cutting. Said Q. Forrest Walker, economist for R. H. Macy & Co., great Manhattan department store: ''Our codes are chiefly charters for the elimination rather than the improvement of competition. . . . We have reached a point in our business recovery where price fixing constitutes an insuperable barrier to continued recovery. Neither industry nor trade can make any notable progress half-shackled and half-free." Said Alfred Reeves, vice president of the Automobile Manufacturers Association: ''We favor free and open competition under regulations laid down by Congress to prevent anti-social practices. Lower costs and lower prices increase volume, and hence employment. Higher costs and higher prices mean decreased volume, less employment.

"Trade practice provisions designed to accomplish price fixing, price maintenance or production control must inevitably lead to the regimentation of business and to the sacrifice of efficiency at the cost of the consumer." Most bitter complaint against price fixing by codes came from consumers. Exclaimed Joseph W. Nicholson, purchasing agent of the City of Milwaukee: "Much ado was made about 'Al' Capone's attempts to organize the cleaning and dyeing industry of Chicago so that fixed prices would be charged for this service and his gang would receive a percentage of the profit. He was a piker compared to the organized coercion, dictation and intimidation of tribute-enacting Code Authorities."

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