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C H A M B E R OF CO M M ERC E OF THE
U N IT E D STATES
WASH INGTON
JOHN
W. O ’ L E A R Y
C H A I R M A N , EXEC U TIV E C OM MITT EE
May 2 7 , 19 42.
Honorable Marriner S. Eccles, Chairman,
Board of Governors of the
Federal Heserve System,
Washington, D. C.
My dear Mr. Chairman:
In your address on Monday before the District of Columbia
Bankers Association you said you could imagine no more mistaken
policy than that expressed in resolutions adopted by an organi
zation of business at a convention in Chicago recently.
If you referred to the annual meeting of the Chamber of
Commerce of the United States, which had its last sessions in
Chicago on April 30, as some newspapers appear to have under
stood, I know you will want me to call your attention to the
resolutions as actually adopted.
The first of the declarations which seems to have been in
correctly reported to you called for an amendment of the PriceControl Act "to cover all the elements that control prices, in
cluding salaries and wages”, during war-time. You will recog
nize that the language is comprehensive. The text is enclosed.
As for the excess-profits tax, I hope the text of the decla
ration as made will have your entire approval. I am enclosing a
copy.
As for the general attitude of the annual meeting, I believe
you will find it fairly reflected in the paragraphs of the third
declaration which I am enclosing.
The declaration in regard to labor relations I believe you
will agree with me should be considered in its entirety. I am
enclosing the text.
With kindest regards, I am,
Sincerely yours
enclosures
WHAT HELPS BUSINESS HELPS YOU
CHAMBER OF COMMERCE OF THE UNITED STATES
WASHINGTON, D. C.
R E S O L U T IO N
Adopted at the Thirtieth Annual Meeting,
Chicago, Illinois, April 30, 1942
Price Control Act
During wartime the Price Control Act which gives
authority for establishment of maximum prices of
commodities should be amended to cover all the ele
ments that control prices, including salaries and wages.
CHAMBER OF COMMERCE OF THE UNITED STATES
WASHINGTON, D. C.
R E S O L U T IO N
Adopted at the Thirtieth Annual Meeting,
Chicago, Illinois, April 30, 1942
Excess Profits Tax
An excess-profits tax is the most effective means yet
devised for reaching any unusual profits accruing to
corporations under war conditions, and profits due to
efficiencies that are developed during the performance
of war contracts. However carefully such contracts are
prepared, the application of ingenuity and greatly in
creased volume production will often reduce costs, caus
ing profits which were not intended, and should be re
turned or taken by taxation. It is of the highest public
interest that war requirements be obtained at the low
est possible costs that include a proper return.
But it is improper to levy an excess-profits tax upon
normal profits. The present excess-profits tax is faulty
in many respects. There should be m aterial improve
ment of the provisions relating to determination of the
credits both on the basis of invested capital and of
prior-year earnings, which are designed as yardsticks
for measuring excess profits. There should also be im
provement of the special relief provisions, and those
relating to normal growth should be extended and
applied retroactively.
There should be reversion to the practice of the 1940
Revenue Act under which normal income taxeb were
deducted prior to the application of the oxcess-profits
tax. The bracket rates of the tax should be according to
percentages of the excess-profits credit rather than
(OVER)
dollar amounts.
To confine the tax to excess profits, the earniiigs to
which it is made applicable should be an average of the
war years. The present net loss and credit carry-over
provisions should be extended to cover the war period,
and suitable net loss and credit carry-back provisions
should be adopted.
I f framed with these modifications the tax would
apply more nearly to true excess profits than the pres
ent law. There could then be applied steeply graduated
rates, even approaching one hundred percent in the
highest bracket.
W ith such an excess-profits tax a moderate rise in
the corporate income surtax would substantially in
crease revenues. This combination of taxes upon excess
profits and normal income, with encouragement to
establish reasonable reserves for the post-war period,
would enable corporations to contribute to a maximum
extent to a successful prosecution of the war, and to
prepare for transition to peace-time production.
CHAMBER OF COMMERCE OF THE UNITED STATES
WASHINGTON, D. C.
R E S O L U T IO N
Adopted at the Thirtieth Annual Meeting,
Chicago, Illinois, April 30, 1942
Labor Relations
The rights of men were asserted in the Declaration
of Independence, and set out in our federal and state
constitutions. Since they have been so carefully pre
served for us, we have a duty to maintain them and
pass them on undiminished.
In defense of these rights the country is now at war,
and every one has a personal obligation to contribute
his full effort to winning this war.
Until recent years the right to work has not been
seriously challenged in this country, but on this right
there have now been successive encroachments that
concern every American. In the face of national peril,
these encroachments have impeded maximum war pro
duction. Neither labor nor management has a right to
promote its respective interests at the expense of the
general welfare, and least of all during war.
It is, therefore, most tim ely to state principles to
which we adhere, and which we believe all Americans
should support.
The right to work should not be curtailed, abridged,
or denied, in war or in peace. This right extends to
every lawful occupation. It is the fifth freedom in con
junction with the freedoms of worship, of speech, of
the press and assembly.
M utuality of interest on the part of employer and
employees in the success of every lawful enterprise is
an important asset of the enterprise, and means to
(OVER)
insure this m utuality of interest should be encouraged.
The right to organize voluntarily and to bargain
collectively should be protected against threats from
any source.
The right to obtain employment, and to remain in
employment, should not be conditioned upon member
ship, or non-membership, in any organization, or upon
any payment to anyone. There should be immediate
legislation by Congress to protect this right.
The right to strike should never exist against govern
ment—federal, state or local. The right to strike should
not be exercised against any public service until due
precautions have been taken to safeguard services
upon which the community is dependent. W hen the
nation is at war the national interest would be served
if the exercise of the right to strike were voluntarily
suspended by all workers.
Provision should be made for fair and im partial me
diation of labor disputes. In the negotiation of these
disputes, local mediation should be encouraged and
given preference.
Artificial lim itations upon hours of work, whether
imposed by statute with penalties for employers or by
labor organizations with penalties for employees,
should by law be suspended during war.
Every worker should have opportunity to better his
situation by free and fair competition and to be rec
ompensed on the basis of merit.
A uthority to enact legislation respecting labor rela
tions can usually best be exercised by the states, in
order that there may be flexibility in adjustments
under constantly varying local conditions.
A s Americans, employees and employers have a
mutual interest in the protection of these principles.
In the interest of the war effort and industrial peace
any legislation infringing on these principles should be
modified and any new legislation that is needed should
be enacted in conformity with these principles.
CHAMBER OF COMMERCE OF THE UNITED STATES
WASHINGTON, D. C.
R E S O L U T IO N
Adopted at the Thirtieth Annual Meeting,
Chicago, Illinois, April 30, 1942
Winning Freedom
The foremost obligation of the Chamber of Com
merce of the United States and every other organiza
tion and every individual in America today is dedica
tion to the conclusive winning of the war.
In December this organization and its member or
ganizations pledged unqualified support of the gov
ernment in the war. That pledge this m eeting of
delegates reaffirms for the tasks of unprecedented
magnitude that have now been made plain.
Cost what it may, take what time it must, require
what individual and collective sacrifice it will, there
can be only wholehearted, all-out devotion to the com
plete triumph of freedom.
W hile we have surrendered many of our freedoms
temporarily as an essential contribution to this para
mount cause, these freedoms have been relinquished
only until victory is achieved. Otherwise, victory would
be a hollow triumph.
W hen the war is won there must be immediate res
toration of the full working of the system of free
enterprise for the prosperity and happiness of our
own people and also that the American W ay may be
an example and symbol to free men everywhere. For
here in America we have achieved a wide distribution
of education, comfort, and convenience* W e have
attained unprecedented living standards. The progress
(OVER)
we have made is but a promise of what the American
W ay can contribute to our future in a world 6f free
men, once the threat of the A xis philosophy of force
has been overcome.
Great Causes are won by Great Faiths. The cour
age, the ability, to persevere regardless of losses, the
w ill to win despite the odds, is only born from the
conviction that the goal to be achieved transcends
every other value.
The Chamber of Commerce of the U nited States in
convention assembled declares that it is the inescapable
duty and high privilege of business in all its phases to
match, as fu lly as possible, the sacrifices made by our
men in the armed services.
These articles are protected by copyright and have been removed.
The citations for the original articles are:
Washington Daily News, “In Again – the U. S. C. of C.,” May 12, 1942.
Lawrence, W. H. “Closed Shop Ban Urged by Chamber.” New York Times, May 1, 1942.
Vanderpoel, Robert P. “U. S. Chamber of Commerce Final Action Shameful.” Chicago American,
May 1, 1942.
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Juno 1 , 19U2.
Hr* John W. O’Leary,
Chairman, Executive Committee,
Chamber of Commerce
of the United States,
Washington, D. C.
Ity dear Mr. O’Leary:
This is to acknowledge your letter of May 27 in regard
to ay address before the District of Columbia Bankers Association.
Inasmuch as Z wished to state a principle and not to make an at
tack, I did not mention the Chamber of Commerce of the United
States by name, but my reference was to the Chamber.
That reference was based on a number of newspaper accounts
by trustworthy reporters. One was Mr. Hobert P. Vanderpoel, Fi
nancial Editor of the Chicago American, with whom Z sa well ac
quainted. Another appeared in the Hew York Times* I enclose copies
of both of these articles, as well as an editorial from the Washing
ton Sews which more particularly emphasised the Chamber*s attitude
toward labor relations, ity own references to the subject were more
restrained than 1 actually felt.
Unfortunately, the declarations of the Chamber were not in
correctly reported to me. Sad the resolution or declaration, a copy
of which you enclosed, proposing control of "salaries and wages" been
the only one offered to the Convention, it might be possible to con
strue it as being "comprehensive". But the facts were as I stated,
that "men who dominated these councils" rejected the declaration
recommended by the Chamber's Besolutions Committee which embraced not
only salaries and wages but also "bonuses, coamissions and compensa
tion of all kinds paid to all employees for services rendered, in
cluding corporate officers, directors and managers•" As the news
paper accounts reported, the Messrs. Strong and Du Pont objected to
extending control to executive bonuses, commissions and other devices
for paying compensation. Z agree with Mr. Vanderpoel that this was
"downright stupid" and "shameful". It is most unfortunate that the
declaration of the Besolutions Committee was thus rejected for a poor
compromise that in effect proposes control of labor but exempts capi
tal. I did not address ayself to other resolutions of the Chamber,
including the equally short-sighted pronouncement on the closed shop
issue at this time.
Mr* John W. O'Leary
-
June 1, 19U2
(2)
Since you hare drawn fly attention to the declaration with
regard to excess profits, permit me to say that muoh of this state*
ment is in generalities to which nobody could properly take ex
ception* The suggestion for an extensive loss carryover is a good
one, end it would be more equitable to graduate the tax according
to percentages of excess profits credit rather than to absolute
amounts, although the effect of this would be to benefit large
corporations. The suggestion to revert to the 19U0 practice of de
ducting corporation income tax before calculation of the excess
profits tax is mors debatable* The present method of first calcu
lating the excess profits tax and then deducting it from income for
purposes of corporation income tax calculation results in sub
stantially higher aggregate tax liability, and unless reversion to
the former method were accompanied by a sharp increase of tax rates,
it would just be a subtle way of lightening the corporate tax burden.
The main objection to the statement lies, however, not in
what it says but, as in the case of the resolution on wage oontrol,
in what it fails to say. As the Treasury has repeatedly emphasised
and as I have undertaken to point out from time to time, one of the
main defects of the existing law is that it fails to tap adequately
the earnings of corporations that were prosperous in the base period
1936-1939« Such corporations are allowed to continue to earn 95 Per
cent of these earnings, however high they were, without becoming sub
ject to the excess profits tax. This glaring defect of the present
law is not mentioned in the resolution.
Prom your own broad experience, £ am confident that you
would feel as 1 do about the importance above all in these critical
times of broad-minded, generous leadership, particularly on the part
of those who have the most at stake, the most to preserve in our
country* The disclosure of the attitude reflected by those who un
happily dominated the Chicago meeting, the revelation of outrageous
tax evasions and profiteering as presented to the Congress by the
Secretary of the Treasury a few days ago and commented upon by the
President, are disgraceful exhibitions of selfishness and blindness
on the part of those who, much more than the common run of workers,
should have the vision, the courage, and the intelligence for the
right kind of leadership.
I appreciate the courtesy of your letter, and 1 wish to re
ciprocate your kind personal regards*
Sinoerely yours,
(Signed) M. S. Ecciea
.oaurea
3
M* S. Socles,
Chairman.
CHAMBER
OF CO M M ERC E OF THE
U N IT E D STATES
WASH INGTON
J O H N W. O 'L E A R Y
C H A IR M A N , E X E C U T IV E C O M M IT T E E
June 8, 1942.
Honorable Marriner S. Eccles, Chairman,
Board of Governors of the
Federal Reserve System,
Washington, D. C.
My dear Mr. Chairman;
You will want me to assure you, I am confident, that you
are in error in assuming the newspaper accounts which you enclosed
with your letter of June first correctly report facts as to the
session of our annual meeting held in Chicago on April twenty-seventh.
There is a complete stenographic record of the proceedings.
Copies of this record were immediately made available to newspaper
men.
tí
This record shows that Mr. duPont, who is mentioned in the
editorial article upon which you seem to have relied, at no time
talked about bonuses of the kind alleged in the article. After the
original declaration about the Price-Control Act had been adopted,
he pointed out a possible inconsistency in a subsequent proposal
that workers should have opportunity to be compensated on the basis
of merit. The record shows most clearly that he at all times was
referring to compensation of wage-earners. At no time in the discus
sion did he mention bonuses for executives or officers.
cf
The record is equally conclusive that the original proposal
of the Resolutions Committee regarding compensation for services,
after being adopted, was reconsidered only in the light of the point
made by Mr. duPont and, after changes that extended the proposal
to all items of overhead as well as all items of compensation, was
finally adopted in a broader form than its first form.
You are entirely right in assuming that I join with you in
emphasizing the need in these critical times of broadminded and
generous leadership. I know that you will denounce with equal emphasis
misrepresentations of fact, and palpable distortions obviously made to
create false and destructive impressions.
I am extremely sorry that you did not have before you
the true facts, which were available, rather than the distortions
presented by those writers who had access to the record, but
ignored it.
I am most grateful for the discussions on other subjects
which you were so kind as to include in your letter.
With kindest regards, I am,
Sincerely yours,
2d~ .
Cha4pman, Executive Committee
June 10, 1942.
Mr. John to. O'Leary,
Chairman, Executive Committee,
Chamber of Commerce
of the United States,
Washington, D* C.
Dear Mr. O'Leary:
Your letter of June 8 prompts me to ask
whether you could get for me a complete stenographic
transcript of the proceedings. It is odd and un
fortunate that two presumably responsible newspaper
writers should have so misrepresented the facts as
you understand them> and it is too bad that they were
not immediately corrected before the impression was so
widely broadcast that the men who dominated the Chicago
meeting wanted themselves exempted from any curbs on
their personal profits.
Needless to say, I certainly wish to do no
injustice and appreciate the spirit in which you have
written me.
Sincerely yours,
(Signed) M. S. Bceles
M. S. Sccles,
Chairman.
ET:b
CH AM BER OF COM M ERCE OF THE
U N IT E D STATES
W A SH IN G T O N
J O H N W. O L E A R Y
June 30, 1942
C H A IR M A N , E X E C U T IV E C O M M IT T E E
Honorable Marriner S. Eccles, Chairman,
Board of Governors of the
Federal Reserve System,
Washington, D. C.
Dear Mr. Eccles:
I hope you will not think me negligent in my
failure to respond immediately to your letter of June
tenth. Unfortunately, the letter was missent to the
Department of Commerce by the Post Office and has just
now come to ray attention.
The transcription of that portion of the proceedings which was related to our correspondence is attached.
This was the portion which was made available to the press
immediately following the session. Many of the correspond
ents read it and gave a correct report of the proceedings.
It is unfortunate that others did not state the correct
facts
With appreciation of your interest and the con
tinued desire which you have always demonstrated to be fair
in all of your expressions,
Sincerely
Ju ly M , 1942
Mr. John ift. O'Leary,
Chairman, Executive Committee,
Chamber of Commerce
of the United States,
Washington, D. C.
Dear Ur. O'Leary:
There is no point, of course, in continuing this corres
pondence about the intention of those at the Chicago meeting who
struck from the resolution the references to bonuses, etc. How
ever, you remark that “many of the correspondents" had not in
terpreted the proceedings as 1 did.
Since my last letter I have obtained copies of all of the
newspaper accounts 1 could find and it seems to me they uniformly
construe the proceedings exactly as I did* For example, the Chicago
Daily Times headlines read, "Curb Ullages, Not Bonuses, C.ofC. Asks".
The Chicago Sun headline was, "Business *sks Law to Curb wages —
U.S. Chamber Omits way Reference to Executive Earnings". The Journal
of Commerce headline was, "U.S. Chamber *sks Salary, nage Ceiling —
Omits Mention of Bonus . .
The Chicago Daily News headline was,
"Place Ceilings on Wages, too, Business Urges — Chamber of Commerce
of U. S. Kills Plea for Bonus Curb". The Chicago Tribune headlined
the closed shop issue. A reading of all of the accounts that appeared
in Chicago papers bears out the headlines and confirms the interpreta
tion, right or wrong, which I attached to the meeting.
You may be entirely right that it was not the intention to
draw this sharp line of discrimination between labor and the operators
and owners of business. If so, it was highly unfortunate that the
matter was not made clear beyond any question of doubt since the is
sue is of such crucial importance, or that the misinterpretations, if
such they be, which appeared in the press were not promptly corrected.
I do indeed wish to be entirely fair about it and I agree
that a careful reading of the stenographic transcript which you sent
me leaves the matter in some doubt, yet the impression it gives is
one of discrimination, and that is most unfortunate to say the least.
Sincerely yours,
(Signed) M. S. Eccles
M. S. Eccles,
Chairman.
ET:b
DISCUSSIOH ON PRICE RESOLUTION
ME. IAMMOT duPONTs Mr# Chairman, I can’t help calling attention to
an apparent conflict here. This resolution calls for compensation to workers
on the basis of merit. The resolution just previous to this called for a limi
tation of compensation by law. I think those two are in conflict.
MR. CAMPBELL: I think the one, Mr. DuPont is related to the Price
Control Act t«> mA-yimum ceilings. Under the Control Act they have no power to
fix anything hut ceilings on wages and compensation.
MR. DuPONTs If you fix the ceiling, you can't compensate a man more
highly than that, no matter what he does. He may merit more. The law will
prevent paying more.
PRESIDENT HA.WKES: Mr. DuPont, will you he good enough to make a
little clearer to the Chairman just the point that you are raising? I think
I understand it, hut I want to he sure,
MR» DuPONT: This resolution states that every worker should have an
opportunity to better his situation by competition and being recompensed on the
basis of merit. That seems to imply that there is no limit to a worker's conpensation, provided he merits it. The other resolution provides for a limitation on
salaries and wages by law— a ceiling on wages and salaries. Those two things
do not seem to me to be consistent.
MR. CAMPBELL; I think the Price Control Act does not give the right
to the Administrator to fix the salaries or commissions or compensations of any
individual.
PRESIDENT HAWKES: Could you amend it to include cay, '’wages,
bonuses, commissions, and compensation of all kinds paid to all employees for
services rendered, including corporate officers, directors, and managers! I think
your point is, Mr. DuPont, that as that readsit covers the wages of every workman
and under that those wages would be stymied, is that the idea? And under this
other thing, while we are talking about paying a man according to merit, and so
forth—
Couldn't we cure that little defect so that there won't be any ambiguity
or misunderstanding in the situation by making the last resolution— that particu
lar paragraph that refers to compensation in that last "right to work" resolution—
apply to all normal tines under all normal conditions? Won't that do what you are
talking about? Because you and I both know that we believe in paying a man the
kind of a salary that we think— that the Board of Directors thinks— he is entitled
to as to what he delivers. We think pretty much the same, I'm sure, on wages and
all that* But we do recognize~at least I do— that in this wartime there has to
be some regulation; and I am willing to submit to that if there is any way to
see to it that it will be restored to us when normalcy returns.
MR. DuPONTs May I make an observation, Mr. Chairman? I think the
trouble is in the resolution in regard to the Price Control Act. The intent there
is to control the factors which enter irito cost and, therefore, into pricing.
But by accident the language has been so worded as to prohibit higher compensation
even though that reduces the cost and the price. You can pay a nan, particularly
xxxxxxxxx
a supervispr. a higher rate, get better service, and thus reduce the cost*
is wfiere fne trouble lies«
That
ME. SIIAS STRAWN: Couldn't the difficulty be eliminated if we move
to reconsider the Price Control Act and vote on that again? I think it is a very
dangerous statement and it puts this Chamber on record in a very dangerous posi
tion. Are we going to turn over to the Government the running of our businesses
and the fixing of the salaries of everybody? That is a violation of the
Constitution with respect to contracts. And I move that that Price Control Act
be reconsidered and it be voted down and then the labor action follows*
PRESIDENT HA.WKES: What is your pleasure, ladies and gentlemen?
Any second to that motion?
*.. The motion was regularly seconded ...
PRESIDENT HÔ.WKES: It has been moved and seconded that we reconsider
the Price Control Act which we have adopted just previously. Any comment? All
those in favor say "aye”; contrary "no.1* So ordered.
Now the thing to do is to put it back in with a motion.
MR. STEAWNi
Then I move that that be deleted— that that section be
deleted.
PRESIDENT HATOES: In other words, don't touch it*~let it alone*
A.s the old colored fellow said, "It don't belong to us."
ME. STRAWN: Nature will take its course on those*
**. The motion was regularly seconded ...
PRESIDENT HAWKES: It has been moved and seconded, ladies and gentle*men* Any comment? The motion is that the paragraph regarding price control be
deleted*
MR. MILLER: in view of what the Chairman just said a few moments ago
whether this body would take any action which might raise a warning sign to the
"warriors," as he described then down in Congress, I wonder whether this motion
would be wise?
This paragraph on price control, as I get it, is designed to fortify
the proposition that if a ceiling is to be placed on everything else, it should
also be placed upon wages; that you can't control in all consistency one thing
and not another in a total effort.
The ^warriors" of whom the President speaks in Congress have been
endeavoring, as some of us see it, to be consistent in all these things. If you
are going to strike out this proposition on price control, then you are serving
notice upon Congress that this body, the Chamber of Commerce of the United States
is not interested in placing a ceiling upon wages. That is what I interpret this
proposition to be. Now, does the United States Chamber of Commerce desire to be
in that position?
ME. STRAWN: The answer to that has been made by Mr. DuPont, I think,
when he stated that it isn’t definite to indicate the elements to be considered
in fixing compensation, wages, and so forth. It is a matter of negotiation, and
everything should be taken into consideration when you are fixing price controls.
And I think we are treading on very dangerous ground to adopt that resolution,
and it is something that is going to embarass us hereafter every time we have
any controversy with the Government on that.
MEMBER: I would suggest that in this price control paragraph we
insert the words"during the period of war and for six months thereafter."
(Applause)
Gentlemen, if something is not done to control wages and prices,
we will have a period of inflation that will practically ruin this country.
We might just as well face it. Personally, I am perfectly will to see prices
fixed or frozen as they are today during the period of the war. I don’t care
whether I make a cent of money or not. X want to win this war.
PRESIDENT HAWKES: Mr. Harveston, will you be good enough to just
repeat what you have just said?
MH. HAEVESTON:
six months thereafter."
Insert the words "during the period of war and for
PRESIDENT HAWKES: Why six months thereafter? Why not say "during
the period of the war" and let it go at that?
MR. HARVESTON:
some time to—
The only thing is that following the war it takes
PRESIDENT HAWKES: How about saying, "during the period of the wax
and not to exceed six months thereafter"?
MR. HARVESTON: All right, fine, that is my suggestion: "not to
exceed six months thereafter."
PRESIDENT HAWKES: As I said this morning, Ladies and gentlemen,
I am not having my own way very much in the world today, but I am perfectly
willing to give it up if I will have assurance that I will get part of it back
so that I will have a little something to say about things.
I think that what Mr. Strawn has said is very good and what Mr*
DuPont has said is very good. I do feel there is something in what these gentlemen
have said* I have been sitting down there and I have heard Leon Henderson before
the War Labor Board, and he is the only man in the United States with up-to-date
guts to go before the War Labor Board and tell the labor leaders that they cannot
keep on raising their wages and sapping the economic strength of the nation* And
bo told it to them in such a way that they called him such names as I won* t repeat
here for several weeks thereafter*
As much as I dislike it, I believe in price control, in the control
of our lives— I think that we are a messy group of human beings, and there are
some things that have to be done, and I think we have got to find some way—
I must agree with this gentleman over here: I think that if the Chamber fails to
say anything about this thing, it will fail to back up these men in Congress
who are trying to do a job; and they have a tough enough job, and they are not
having their own way, and they are not going to have it. Nobody is* We are
going to have a composite of the thing, and we want to have it as decent as we can*
Now what is your pleasure? Mr, Strawn, does that correction help
you at all?
ME. STRAWN : No, it doesn’t. I think that where you regulate the
price, it necessarily takes into consideration the elements that go into the
commodity, and that contemplates what the cost of production was, the wages,
which includes, also, the salaries of executives. But when you try to start out
and go into it backwards and fix the compensation of corporate officers and
executives .... that is a pretty big order* It gives an opportunity to any
corporation to arbitrarily dictate what wag®« they shall pay*-* , and what they
shall pay their employees, and what they snail pay their directors*
PRESIDENT HAWKES: Before you sit down, will you tell me, whether
you are opposed to fixed prices during the war period?
MR. STRAWN: I think that is probably inevitable, but I don’t think
it ought to extend to the taking over of all of a man’s business, so that the
bureaucrats in Washington can dictate all the elements that are to go into his
business*
PRESIDENT HAWKES: I am sorry for labor, but I think this thing is
very important. You see, I am one who has been saying that it is perfectly
foolish and ridiculous—
I learned in the last war an amazing thing. We took
30 commodities and we found out that labor was 65 to 85 per cent of the total of
those things* Now here we are trying to fix price ceilings and prices and we are
leaving out of consideration, up to date, that thing which is 60 to 75 or 85 per
cent of the total cost— and it just cai’t be done, gentlemen.
We must remember that there are two sides to this thing: the employer
who gets the price jammed down his neck— the ceiling on the top of his neck; and
then labor and wages come in and squeeze him between the two jaws of the — and there is very little hope for him. We have been discussing that very freely
and very frankly. I think you are going to have price fixing* I know you are
going to have it— well, I mean, you are going to have it even much further than
you've got it now. It is going to have to go through all the vital and important
things in the country* And I do think that this Association, whether this is
expressed rightly or not-~I think this Associaticn must go on record to the
effect— and if I can have anything to do with it, I want to see it go on record
to the effect——that you can’t fix a ceiling on prices without controlling the
cost factors and the cost of the thing you are selling, (Applause)
MR. DuPONTs Mr. Chairman, I agree with what you have just said*
The point in here that irks ne most is not this idea of not being allowed to
pay extra compensation for nore and better work. That idea is involved in the
word "bonus.11 Now I would suggest that this resolution be amended by striking
out everything which follows "salaries, wages," so that it will reads "should
be amended to include salaries and wages."
PRESIDENT HAWKES: I would go along with you 100 per cent on that.
I think that is a very, very good suggestion. I think practically everybody in
this room will go along with you on that.
Does anybody second Mr. DuPont's motion?
•*. The motion was regularly seconded ...
MR. TATEs It seems to me that this final wording might improve it
a bits "During war times the Price Control Act, which gives authority for
establishment of maximum prices of commodities, should include all the elements
which control prices, and this would include compensation for services rendered.
PRESIDENT HAWKES: I like Mr. DuPont's suggestion. I think that he
has made a very specific statement. "Salaries and wages"— that is the thing
that is in the minds of the public. I think Mr. DuPont has a very good points
"including salaries and wages."
However, your suggestion, Mr. Tate, is also very good. It really
covers the same point made by Mr. DuPont. "The Price Control Act, which gives
authority for establishment of maximum prices of commodities, in order to be
effective, must include the control of salaries and wages." Is that all right
with you, Mr. DuPont?
MR. DuPONTs
I second the motion*
I would like very much to accept Mr. Tate’s suggestion.
PRESIDENT HAWKESs All right, have you got it? A motion has been
made and seconded, and in order to get it along, are there any comments? If not
all those in favor say "aye."
MR. STRAWN: Will you please read Mr. Tate's suggestion again?
MR., TATEs The way I read it was this: "During war times the Price
Control Act, which gives authority for establishment of maximum prices of com
modities, should include all the elements which control prices, and this would
include compensation for services rendered." Perhaps it is better to say,
"and this includes salaries a¿id wages." It seems to me that "compensation for
services rendered" does include salaries and wages very definitely*
- 6-
MEMBER: And 'bonuses.
MR, TATEj You think wo had. better make it "salaries and wages"?
Well, to get it before the house, I would move that it read that way, Mr.
President.
PRESIDENT HAWKES: Mr* Tate, I mi^it say to you, and you know quite
as much about the thing as I do, in going about the country, that there are common
observations in regard to salaries and wages, and % think we ought to keep our
language in the common observation so that it hits the common average mind* That
is the only reason I would say "salaries and wages."
Will you second that, Lammot?
MR. DuPONT: As regards the phrase that Mr. Tate has brought in there,
"the elements which affect prices," a bonus doesn't affect prices; it reduces
the cost* I believe he put that language in there, or something to that effect.
That saved the dsyS
PRESIDENT HAWKES: Well, now, it has been moved and seconded* All
those in favor say "aye"; contrary "no." Thank you very much* You have all been
very helpful.
********
@FedFRASER