30 



SCIENCE 



[N. S. Vol. XLVII. No. 1202 



in regard to the maximum price which 

 should be paid for the different kinds of 

 print paper for a period of three months, 

 and after that term delegated the same 

 authority to the Federal Trade Commis- 

 sion to the end of the war and three months 

 thereafter. 



All the members of the dissolved associa- 

 tion entered into a contract with the court 

 to execute this agreement. The manu- 

 facturers agreed with the court in the fix- 

 ing of maximum prices throughout the 

 country. Since, however, the demand is in 

 excess of the supply, these maximum prices 

 are in fact the prices everywhere paid. 



Thus by court action, without any change 

 of the law, the same results are reached for 

 the control of prices of paper as are reach- 

 ed by the Food and Fuel Administrations 

 concerning food and coal in consequence of 

 the law and by the War Industries Board 

 for the control prices of copper, iron, and 

 steel. The reason given by the court for 

 the exercise of this authority was, that in 

 the present condition of affairs in the 

 United States, it was desirable that some 

 adjustment of the controversy be made. 



THE PEINCIPIjES UNDER WHICH MAXIMUM 

 PRICES HAVE BEEN FIXED 



In all of the price regulations, the board 

 or other agent has had the very delicate 

 task of so fixing the price that there will 

 be a very large production without raising 

 it so high as to be unreasonable. With lib- 

 eral prices there is a strong incentive to in- 

 creased production. If the price of a com- 

 modity were not only liberal but very high, 

 the production might be still further slight- 

 ly increased ; but this final increment would 

 not be sufficient to compensate for the 

 higher price for all of the commodity to 

 the public. 



There is difference of opinion concerning 

 the soundness of judgment which has been 



exercised in price control ; but it is notice- 

 able that the criticism has been from both 

 sides. The producers have held that the 

 prices are not adequate; the consumers 

 have felt that they are too high. As an il- 

 lustration of the former, it may be men- 

 tioned that there is discontent among the 

 farmers with the price fixed for wheat, al- 

 though this is more than twice as high as 

 that before the war. Similarly some of the 

 coal producers have held that the prices 

 which have been allowed are too low, al- 

 though they are upon the average more 

 than twice as high and in many instances 

 thrice those that obtained before the war; 

 and the profits of the operators are un- 

 questionably much greater. On the other 

 hand, the consumers have felt that the 

 prices fixed for copper, iron, and steel are 

 very high, yielding as they do enormous 

 profits to each of the great producers. 



It is, however, to be said that in all cases 

 the administrative responsibility, in con- 

 trolling prices, has been exercised by a 

 group of men which has included represen- 

 tatives of producers, distributers, and con- 

 sumers, and presumably upon the whole 

 they have been determined as nearly right 

 as is practicable for human beings acting 

 under the stress of a great national emer- 

 gency. 



The regulatory measures have demon- 

 strated that under a proper system, maxi- 

 mum price control is practicable; and, 

 therefore, in the future, discussion should 

 be limited to the question as to whether or 

 not such price control is expedient; that 

 is, whether or not it is advantageous or dis- 

 advantageous to the public. 



Whenever, heretofore, price fixing has 

 been advocated it has always been met with 

 the objection that the proposal is imprac- 

 ticable. It has been said, if the govern- 

 ment fixes prices, secretly they will be dis- 

 regarded. This theoretical objection must 



