Images de page
PDF
ePub

66

without consultations with representatives of the industry, consequently the regulations contain provisions of a highly conflicting nature and members of the industry do not understand what they are expected to do. No advisory committee has been appointed. The regulations are impractical and impossible to carry out.

OPS granted manufacturers an increase of 34 percent, but required the dealer to pass such increase on the retail trade in exact dollars and cents amount charged to the dealer by the manufacturer, thus reducing dealer discount.

Richard Pinck, American Veterans Committee: Regulation No. 7 issued by OPS, containing 36,000 words, is so long and complex that a retailer cannot digest it in time to comply with its provisions. Such regulations unconsciously discriminate against small business which does not have legal and financial consultants to interpret the regulations.

Robert F. LeVine, vice president, Uncle Sam's Shoe Store, Paterson, N. J.: The various media of distribution of information concerning regulations are not sufficient for the small retailer. “It takes me an average of 12 days to peruse the information in the final form that they submit. It is a hopeless thing trying to get compliance with CPR 7. In addition, if the regulation should be changed, we have to prepare five reports, and it is a loss of 10 full-time days, which is a great expense for small business.”'

G. Donald Louden, secretary, Central Virginia Industries, Lynchburg, Va.: Where there are inequities created because of the operation of the 10 percent formula, where a general across the board wage increase has been granted, there is no recourse for increasing the lower paid personnel. They are without an established and written merit rating plan. They are frozen.

John E. Raine, executive vice president, Automotive Trade Association, Association of Virginia, Lynchburg, Va.: Automobile manufacturers who reported earnings of from 15 to 20 percent, and who paid out millions of dollars in dividends, were granted an increase in the price of their product, yet automobile dealers, who average a net profit of four and seven-tenths percent, are forced to reduce their discount on the sale of vehicles and, at the same time, as a result of increased prices on the products they sell, have to pay higher State and city taxes."

8. H. Rutroagh, Packard dealer, Lynchburg, Va.: “Automobile manufacturers have never needed any protection or help from the Government, yet it has allowed these manufacturers an increased price to help them offset increased cost of operation and at the same time they deprive us of our fair share of that increase to offset our increased cost of operation.'

Dean Gallagher, Retail Merchants Bureau, New Orleans, La.: The small retailer is not a factor in price setting. Consequently, it would not affect the control program adversely if all small retailers doing less than $50,000 worth of business were to be exempt from price regulations until such time as rationing is put into effect. Competition with the larger concerns would maintain the normal price differentials existent at present.

Daniel 0. Mansfield, Louisiana Retail Hardware Association: Hardware dealers are unable to complv with the reporting and pricing requirements of amendment 2 to CPR 7.

William J. Daly, representing Holsum Cafeteria, Inc., New Orleans, La.: The price regulation affecting restaurant operators imposes a burden on concerns whose base period is not a normal criterion of operations. There is no provision in the regulation which would permit an owner to apply for an adjustment to rectify such a hardship. The authority to make adjustments in cases such as this should be delegated to local offices in the interests of expeditious processing.

Charles J. Dietrich, Absorene Manufacturing Co., St. Louis, Mo.: Due to our manufacturing seasonal merchandise, we run into considerable difficulty in securing orders at our present-day selling prices. A customer who stocked up during the early spring of 1950 at the 1949–50 price said that he could not place an order at our prevailing prices because he had not made a purchase at the higher prices prior to the freeze, and therefore must resell at the prices he published during the base period. He had not made a purchase which would enable him to raise his prices, so we lost the order.

Robert G. Fournis, Continental Boiler & Sheet Iron Works, St. Louis, Mo.: It is difficult to guarantee the price of products because the prices of labor and materials entering them are not guaranteed to us. We cannot obtain clarification of the wage-freeze order from an official source.

True D. Morse, Doane Agricultural Service, Inc., St. Louis, Mo.: The confusion and disruption of normal flow of goods by price controls creates serious bottlenecks that hinder production. Costly hay balers may be idle at harvest time because of

83473-51--pt. 3—-44

the lack of wire or twine. There are not enough sacks for potatoes now being harvested in California.

Alton Farris, president, Atlanta Automobile Dealers Association, Atlanta, Ga.: OPS regulations are the “most serious threat of all” to automobile industry. Dealer's discount has been reduced 5 percent. Net profits of automobile dealers average 4.7 percent after taxes. Seventy-five percent of Georgia dealers sell less than 100 new cars per year, so this profit is not exorbitant.

0. C. McAllister, Studebaker dealer, Albuquerque, N. Mex.: The recent OPS action which restrained the aubomobile dealer from passing on the 3.5-percent increase in new cars allowed to manufacturers disrupts the traditional discount structure of this industry. Furthermore, regulations issued this far are ambiguous and confusing. The situation is aggravated by the fact that the agency refuses to issue interpretation which might clarify their orders.

Tom Blundell, Tom Blundell Motor Co., Dallas, Tex.: Present OPS regulation as applied to used cars entirely impracticable in principle since no two cars are actually worth the same because they do not contain the same amount of unused transportation. The unenforceability of these ceilings is evident when it is realized that “90 percent of all automobiles are in the hands of individuals, and only 10 percent in the hands of dealers.'

William J. Cleveland, Ford automobile dealer, Crowley, La.: The issuance of supplementary regulation 5 to the General Ceiling Price Regulation eliminates the historic servicing and conditioning charge traditionally included in the sales price of an automobile.

David E. Castles, Castles, Wilson Buick Co., St. Louis, Mo.: The recent increase allowed to automobile manufacturers ignores the necessity for dealers to maintain their normal margins between cost and selling price. At the present time most dealers will suffer a loss in passing through to the bu yer this 3.5-percent increase. Many items of expense increase in direct proportion to the retail selling price of the automobile (i. e. commissions, insurance, interest, taxes, merchant's license fees, etc).

Dan Coppin, Dan Coppin Inc., Jefferson City, Mo.: Increase in the manufacturer's price of automobiles has lowered the margin of profit for the dealer. If such discrimination is continued it will force many dealers out of business.

Walter Tufford, DeSoto-Plymouth dealer, San Diego, Calif.: The issuance of supplementary regulation 5 to GCPR has upset the traditional discount structure of the automotive trade.

H. H. Rutrough, Rutrough Motors, Roanoke and Lynchburg, Va.: Partiality is shown to the large manufacturers in the allowance of the 3.5-percent increase in automobiles at the point of production. Increases should be granted to dealers to help them offset their increased costs of operation as a result of the increase.

T. A. Williams, president, North Carolina Automobile Dealers Association, Raleigh, N. C.: No two automobile dealers agree on what regulations are or when they are effective. No dealer in North Carolina is deliberately violating these regulations, for most of us are still deliberating on what they are.

V. A. Williams, North Carolina Automobile Dealers Association, Greensboro, N. C.: The freeze order issued by the Wage Stabilization Board is not understood by the average small-business man. The employees of such concerns are bearing the brunt of this burden because the employers are uncertain as to when and under what conditions a wage increase is permitted. Regulations issued by OPS are not being properly disseminated. The public must depend upon the press for information.

Otis W. Dresslar, Nashville Automobile Trade Association, Nashville, Tenn.: Government interference in the historic discount structure of automotive dealers has threatened the existence of many dealers, particularly in view of the decrease in production and increase in costs. Regulations are written in undertain language and the agency does nothing to clarify the picture through the issuance of interpretations.

James C. Little, Jr., North Carolina Oil Jobbers Association, Raleigh, N. C.: The margin allowed the independent jobber by the major oil companies has been stat ic over a period of years, while the cost of doing business has continued to rise. Wages paid by oil jobbers have increased 100 percent since 1941. Cost of equipment has risen approximately 100 percent. The jobbers margin has remained 2.5 cents per gallon for past 10 years. This has been set by OPS as the ceiling. He recommends that OPS allow an increase in the margin of at least half a cent & gallon.

C. O. Butler, General Foundry & Machine Co., Sanford, N. C.: It is difficult for small-business men to understand and interpret OPS regulations. They should be briefed for the small-business man.

Wesley Williams, secretary, Raleigh Merchants Bureau, Raleigh, N. C.: OPS regulations are wirtten in "typical Government lingo" and could be simplified. *The small-business man does not have the legal staff, neither does he have the time to interpret these complicated pricing formulas.' When order is issued in Washington, district offices do not have sufficient information to be able to interpret the regulations and to tell businessmen what they must do in order to comply. District offices are trying to do a good job, but they do not get information quickly enough from Washington. "Controls should be put on at all levels, and not just on the last link in the distribution path--the retail level.

Allison James, president, Yerkes Chemical Co., Winston-Salem, N. C.: "The principal thing which small manufacturing business does not understand about price control is that it was held strictly to price control but the ingredients and raw materials that had to be purchased had no stability of price. Price control should begin with raw materials and come up the line to the finished product.

T. A. Williams, president, North Carolina Dealers Association, Raleigh, N. C.: Do not understand regulations. “We have been told that the safest thing to do is to grant no wage increases until the order is amended. This suits most of us, but it is hard on our employees.

S. C. Hartman, Victoria Paper Mills Co., Fulton, N. Y.: Eighty percent of the available raw material supply utilized in the paper mills is free from control due to the fact it is imported. If the OPS is unable to stabilize the prices of raw materials in the paper industry it is unreasonable to attempt to establish fixed ceilings on the paper producers. The net effect of these regulations will be the liquidation of many small paper producers in the country.

Palmer W. Cately, Onondaga Supply Co., Inc., Syracuse, N. Y.: Wholesalers, who during the base period of the general freeze failed to raise their prices to reflect the increases passed on to them by the manufacturers, must have immediate relief if they are to continue in operation. Their operating margins are becoming smaller and smaller as the prices of the manufacturers' products rise.

Oscar L. Hausner, New York Accountants Association, Brooklyn, N. Y.: Under Distribution Order No. 1, applicable to meat packers, the base period of 1950 is not a normal criterion of the operations of the average small slaughterer. During this base period many packers were producing only a small proportion of their normal output and the effect of limiting these packers to the amount of production put forth in this period is to keep from the consuming public the large quantity of meat that would otherwise be slaughtered.

Leon L. Sylvestre, Bonin Spinning Co., Woonsocket, R. I.: CPR 18 should be amended to eliminate the necessity of filing full information on blend content since this is confidential information in the trade.

The base period of this regulation was a notably poor period for the textile industry. In addition the pricing formula gives no consideration to the rising cost of administration and selling expenses. Under this formula the industry is unable to book business for future deliveries.

August Meyer, Cincinnati Grocers and Meat Dealers Association, Cincinnati, Ohio: The independent food retailers are not able to sustain any further cuts in their gross-profit margins, because of the fact that in order to meet competition they are now operating on the barest margins possible.

Ralph Dunlop, Krause Plow Corp., Hutchinson, Kans.: Ceiling Price Regulation No. 30—finds it difficult to interpret.

John Rumicks, Benton Harbor, Mich.: Does not have sufficiently large staff to send someone to price ceiling meetings. Cannot afford to hire a CPA to break down costs to keep records required.

Mr. E. A. McCardell, Winpower Manufacturing Co., Newton, Iowa: Started producing a new product a year and a half ago. Wants to know what a small manufacturer is going to do when he has had no background of experience and the price is going to be much higher than contemplated when he started taking orders. No historical price level to base price on.

G. D. Shawver, Innes Co., Bettendorf, Iowa: Believes CPR 22 should provide a wider latitude in its interpretation of price levels. One is not allowed to take into consideration materials at more than ordinary price levels in order to arrive at ceilings, while he has to purchase steel at fantastic prices. Manufacturer is squeezed. His cost is based on previous experience--- which is no longer applicable,

In normal times secured 30 percent of material from warehouses at warehouse prices, and 70 percent of material from mills at lower mill prices. At present time

this pattern is reversed, because material is obtainable only on this basis. Wants to know if this can be taken into account.

W. E. Cornelius, Sunbeam Corp., Chicago, Ill.: Price regulations do not permit increase in selling or administration costs. If a modification were made on the point, he believes it would eliminate 90 percent of the opposition manufacturers have to this order.

No set amount of time is allowed to compute ceiling prices. He has had five certified public accountants working on this since he received the order and they have not finished it yet. He does not think he will be able to meet the deadline.

Distributors and dealers have a heavy inventory because manufacturers went ahead and produced large quantities of merchandise to beat the effective date of the orders and used up their inventories. Those inventories are now in the hands of distributors and dealers. Wants OPS to extend effective date of order for 30 days from present effective date in order that the high cost inventories now in the hands of distributors and dealers can be liquidated in a more orderly manner.

Wendell E. Butler, Allied Farm Equipment Manufacturers Association, Chicago, Ill.; Machinery manufacturers regulation (CPR 30) has created a great deal of confusion in that it has given rise to a number of instances where the distributors and dealers of the manufacturers are unable to handle the particular product because of the fact that their ceiling prices are frozen at a level which will not permit a reflection of the increased cost passed on by the manufacturer. There is a great need for interpretation and clarification by OPS to provide some means of relief in these cases.

The issuance of CPR 30 has created a great deal of confusion among small manufacturers. Few of these concerns have sufficient staffs to make necessary computations of ceiling prices. "Costs, at best, in many small plants are carefully made estimates." The small manufacturers must be given some definite assurances of what their position is now and what it will be in future months so as to permit them to program their schedules of production, without fear of violation of current regulations.

G. R. Wilber, Blood Bros. Machine Co., Chicago, Ill.: If the roll-back, anticipated under CPR 30, is to be effectuated it is necessary that the small manufacturers receive some sort of guaranty that they can secure materials at more normal prices than those paid over the past 10 or 12 months. Unless material costs are reduced there will be a cut in production schedules, which is certainly detrimental to the defense effort.

B. A. Fuller, Fuller Manufacturing Co., Chicago, Ill.: Many small manufacturers have a basis for special consideration in the fact that they have no detailed cost data which would permit them to obtain the pass, through provisions of CPR 30. The recommendation is made that a special report “of comparative costs of labor and material” be the only requirement for inclusion under thisregulation.

R. D. Brown, Northfield Iron Co., Northfield, Minn.: The OPS fails to give consideration to the terriffic increases occasioned by the emergency situation in overhead and other indirect costs of production. The limitation of cost passthrough provisions to materials and direct labor have the effect of reducing the margin of profit as indirect costs spiral upward.

CREDIT CONTROLS The bulk of the testimony of this subject was presented by new and used-car dealers, who stated that regulation W is having an extremely serious effect upon their industry and upon the ability of consumers to purchase needed transportation.

The following points were stressed in the testimony: 1. There are no inflationary pressures in the automobile industry at present. The inventory of used cars is the largest in history, and used cars are selling at about 25 percent below ceiling prices. There is no shortage of new cars. Under these circumstances, there is no necessity for drastic credit controls in the industry,

2. The present terms of regulation W make automobile transportation a luxury, whereas it actually is a necessity for most families in the United States. Defense and essential civilian workers must have automobiles to carry them to and from work.

3. The placing of credit restrictions upon certain articles, while leaving many others uncontrolled, is an ineffective method of controlling inflation. There is no. bar to consumers spending their money on many nonessential items, thereby

increasing inflationary pressures. On the other hand, many of the articles under credit control are necessities. As a result, one of the effects of regulation W is that of diverting spending into nonessential channels, rather than curtailing it.

The witnesses generally agreed that some restrictions on credit are necessary. They recommended that regulation W be liberalized rather than removed.

SUMMARY OF TESTIMONY-REGULATION W

Sperry W. Miner, Buffalo Automobile Dealers Association, Buffalo, N. Y. (representing 100 dealers): Buffalo dealers serve large industrial area, including 240 manufacturing concerns. Employment is increasing rapidly, and public transportation cannot handle defense workers.

William W. Welton, Syracuse Automobile Dealers Association, Syracuse, N. Y.: Industrial employment has increased so greatly that workers are commuting as much as 50 miles. Families in suburban areas also need automobiles for shopping purposes.

J. W. McKinnon, Elmira Automobile Merchants Association, Elmira, N. Y.: The present 15-morth limitation under regulation W has already created a great hardship on many many people whose need is greatest and who are determined to have that good car regardless of consequence or what financial sacrifices it may entail. When the need and desire is great, the result is, insuficient food for the family, cashing in war bonds, spending life savings or mortgaging the house. If regulation W succeeds in reducing automobile purchases by 30 percent, it will have a restricting effect on only four-tenths of the I percent of total purchasing power. The only people that are really curbed in buying cars are the people who most need them.

George Gardner, New York State Automobile Dealers Association, Binghamton, N. Y. (representing 2,100 new-car dealer3). The average new-car dealer ranks thirty-eighth in net profits among 40 trade groups surveyed by the Accounting Corporation of America.

Tracy Terry, Terry Bros., Patchogue (Brooklyn), N. Y.: People in our area drive 70 miles to and from their place of employment. The nearest hospital is 15 miles and it is 2 miles to any food stores, so the automobile is certainly a necessity. This regulation had this effect on our sales: when they cut the financing term to 15 months, within 1 week we had 20 cancellations. A lot of these people cannot finance the $1,000 used-car today. It seems the Government has forgotten those low-income people and small dealers.

Daniel Rosen, New York Used Car Dealers Association, Inc., Brooklyn, N. Y.: The enactment of regulation W has as of this date gone beyond its original contemplated purpose and virtually destroyed one of the major industries in the United States, composed entirely of small-business men. It has not only attempted to curb inflation, but its far-reaching effect has been to virtually wipe out the entire used-car industry.

There are in this country approximately 60,000 small-business men in the business of buying and selling used automobiles exclusively, and 10,000 dealers engaged in the business of buying and selling both new and used automobiles. The destructive effect of this regulation has brought to a complete standstill sales in the used-car industry. The chaos created by this regulation finds the industry in a position where, despite the greatest surplus of automobiles in history and a demand on the part of the public for an article that is a necessity in its daily life, the vendor is unable to sell and the buyer is unable to buy because of the prohibitive measures of regulation W.

Carl F. Fribley, Pontiac, GMC truck dealer, Norwich, N. Y.: Our records prove that since the Federal Reserve Board arbitrarily placed a 15-month limit on the time sales last fall, many workers in war plants-10 to 25 miles from their homes--have been unable to buy necessary transportation. Many small-town doctors, ministers, teachers, and other car users have been unable to buy cars under these harsh, stringent, and unnecessary credit terms.

William L. Mallon, New Jersey Automotive Trade Association, Newark, N. J. (representing 1,000 members): “The stringent terms of regulation W prevent many millions of defense and civilian workers from purchasing essential transportation they so vitally need. The situation outlined here is really worse today than during the period 1941–15.

“Most all of our dealers have customers who, year after year or every 2 years come in and trade, let us say, a 1948 car in for a 1950 car, and they have been able to do it. They have steady jobs, a good credit standing, but not much capital, so they have been able to make that deal, which they needed. If these people

« PrécédentContinuer »