Industry Prepares Postwar Price Slumps, Threatens New Slump
Industry Prepares Postwar Price Slumps, Threatens New Slump WASHINGTON, D. C—Workers demanding full emplc^?!*nt at good wages and consumers demanding an abundance of food, elo&ifif ZRi fthtr...
...There is much evidence that new machines and new techniques have increased output per man-hour...
...If a higher production rate is assumed, it can set lower prices...
...Here is a simple example...
...That Is the moral of the story...
...But the total profit, were higher...
...Replying to a query from the Ai'I.Ii in April regarding the Navy's alleged discrimination against Japanese Americans, former Secretary Knox had stated that "the rights of Japanese Americans cannot be recognized-without great risk to our military operations," and that "it would be quite possible' for disloyal Japanese to impersonate theae naval personnel (Nisei) with highly damaging results...
...The NAM wants to cat both...
...Whether to compute reconversion price ceilings on the basis of past volume of output or on the much higher volume necessary to guarantee full employment in the future is probably the toughest problem which must be solved by OPA...
...The Ineressed costs of production art taxes and wages...
...LaGuardia Asks Aid for Polish Patriots Mayor LaGuardia of New York broadcast an appeal for weapons for the embattled patriots of Warsaw, still desperately fighting after six weeks with meager aid from outside—none at all from the Red Army...
...Economic Lesson II Thk old saw that figures don't lie...
...What price . econversion ? What will determine the price of the new refrigerator, the new car, the vacuum cleaner...
...On the other hand, you may buy l*t items at a dollar and sell them for $1.1* apiece...
...Bard further declared that while thia decision "may work an incidental hardship upon certain loyal Japanese Americans with valuable capabilities, they will realize that during these trying timss their own ultimate interests will best be advanced by performing Important war-supporting duties on the home front rather than to insist upon the recognition of a status which It is impractical to grant in time of war...
...Release from strict standards and inspection necessary for war products is expected to raise output even higher on return to peace production...
...The NAM says that the rate of profit from 1939 to IMS declined S.l to 2.8 per cent...
...Bnt in the ¦ret example yostr totsl profit is $1...
...If a high postwar volume is used as base, prices can be considerably lower...
...High JPJJ1 a,nd .low prices can exist side by side when labor productivity ts"K5r»r~ "~* - -______ Faced with these questions, OPA has a difficult and far-reaching decision to make...
...On May 5th, ACLU's Chairman of the Board, Rev...
...but that liara •gars comas in handy sgain, for the National Association of Manufacturer has denied that "excessive Profits were saade fa industry...
...In their "exception" Rev...
...If it sets high prices, such higher prices will encourage return to the prewar industrial policy of planned scarcity, millions of unemployed, low wages, and union-busting...
...WPB's electric iron program, however, described by some government officials as the "guinea pig test program of reconversion," has been able to avoid this pressure for increased prices...
...OPA, prices will be high...
...He stated that "This policy is dictated not by any fundamental distrust of the loyalty of thia group as a class, but because of the peculiar conditions which are encountered in present Naval warfare and which would make their preaence particularly troublesome in active areas of combat, such as in the Pacific...
...That is the question under debate in Washington now as manufacturers get clearance, one by one, to resume production of peacetime products...
...In other words, to make more money than they made previously, corporations had to do a greater voluase of business...
...WPB appears ready to back industry on that demand, giving out official government statements which lend weight to industry claims of high costs and demands for increased prices...
...But theg admit that the total profits have gone mm...
...Yoa*may bay a single Item for $1 and sell it for $2...
...The Poles, the Mayor said, "had every reason to believe that arms would be dropped from planes, as was done in every other case as United Nations force* approached occupied countries...
...Industry pressure on OPA is for high cost-plus prices, making no allowance for large volume or high labor productivity...
...When yon break down the NAM figures exactly, »* find that what they are saying is thst the rate ef profit haa declined in the war...
...Navy Will Prevent Japanese Americans from Serving iA LLOWING Japanese American citizens to serve in the U. S. Navy would "create collateral racial problems of a complex nature which cannot be handled adequately under war conditions," Acting Secretary of the Navy Ralph A. Bard declared in a letter to the American Civil Liberties Union which was made public recently...
...If tin low prewar volume is assumed, prices will be high...
...John Haynes Holmes, and Counsel Arthur Garfield Hays took "respectful exception" to this statement in a letter to James V. Forrestal, who had become Secretary of the Navy...
...LaGuardia had the courage to state bluntly that "1 do not believe that the delay (In sending available supplies) is due to military reasons," though he did not place the blame...
...If prewar output per man-hour is adopted as a base by...
...Labor output per man-hour is another major factor...
...so they have to do more business to make as much ¦oney as before...
...If it plans, on the other hand, for full employment and high output, it must hold prices down so that more goods will be sold, more jobs created...
...Holmes and Mr...
...Actirig Secretary Bard's answer, just received, confirms the Navy's stand and states that "it is impossible to accede to the proposal that the Japanese Americana be made eligible for any of the various branches of the Naval service, including the -Women's Reserve...
...The NAM does H by a simple juggling of two economic concepts: rate of profit and absolute profit...
...Industry Prepares Postwar Price Slumps, Threatens New Slump WASHINGTON, D. C—Workers demanding full emplc^?!*nt at good wages and consumers demanding an abundance of food, elo&ifif ZRi fthtr commodities at low prices, both have a huge postwar stake m price policies now being shaped by the OPA...
...in the second example yostr total profit is $10...
...What the NAM la lamenting is that their costs of production hsve gone up...
...Hays pointed out the fact that the Navy also excluded from the WAVES all women of Japanese ancestry to '((horn the Secretary's arguments could not possibly apply, and added that it was difficult to understand why "disloyal Japanese" could impersonate loyal Japanese Americans to a greater degree than disloyal Germans or Italians might impersonate their own loyal kind...
...Y°er rate of profit is only It per cent...
...Your rate of profit "« 100 per cent...
Vol. 27 • September 1944 • No. 38
