What Price Production?

Massachusetts' own Joe Martin several weeks ago made an attempt to come to the aid of the Captains of Industry without entirely ignoring the party. Suggesting, among other things, substituting Herbert Hoover for Leon Henderson to play quarterback at price administration should calm the nerves of Charles E. Wilson, president of General Motors. Mr. Wilson's fears for "the prerogatives of management" may be regarded as mildly symbolic. In fact, there is much evidence to show that Big Business has not been enthusiastically supporting the victory production campaign. This statement might also be regarded as mild. Whether or not Martin's suggestion was any more than coincidental to Wilson's warm-worded defence of Free Enterprise is not as important as the fact that industry seems to be following its usual war-time scheme of making tomorrow's fortunes out of today's misery.

Big Business is not showing the willingness to cooperate and sacrifice that is being asked of all U. S. citizens and youthful ones in particular. The victory production appropriation of $170,000,000 asked for in October was effectively curtailed at that time by Knudsen and the "business as usual" bloc in Washington. Fearing the great disturbance such a tremendous production program would cause in industry's life made the managers wish to dodge Uncle Sam's pointed finger. Despite Pearl Harbor's supposed unifying effect many of the most vital industries are not producing up to capacity. The machine tool industry, necessary to the production of defense material from airplanes to compasses, is operating at 64 per cent idleness. The Detroit District, the nation's center for the industry, has not been more than one-third effective for the past three years.

At the same time industrial production is proceeding "as usual," it is enjoying more than comfortable profits. According to Leon Henderson profits are up 169 per cent over the 1939 level and are still rising. In the first six months of 1941, they increased 33 per cent over those for the similar period the previous year. Even the Wall Street Journal says that profits have increased. There has been a price rise of 14 per cent of which only 7 per cent is due to labor costs, Isidore Lubin, U. S. Labor Commissioner, reported to a Senate committee. Lubin further asserted that labor costs were steadily decreasing, since output per man has increased 11 per cent.

These facts seem to indicate that perhaps the oft-repeated remarks about the evil War Profiteer might be brought out from beneath their bushels. Of course they do more properly belong to an era of bright peace, like the middle thirties when only Ethiopia and China were invaded. But even today they might be very lightly suggested, without sounding too much like the rantings of a pacifist from the Left. If the information sifting through from Washington is to be believed, the discussion of the evils of war profiteering might have stopped but the profits have not. It is interesting to notice the quiet reception the newspapers gave the declaration of General Motors' president. Newspapers are full of automobile advertisements.

At present, the Administration has won a victory over the automobile industry. The powers given Donald Nelson to direct the defense production effort are also proof that the slack is being taken up. But industry is still far from a smiling partner to the deal. There is no reason why the profits of war industry should be investigated twenty years from now. And there are certainly many reasons to show that price administration needs a sterner commander than Herbert Hoover.