Business: Record & Experience

Until last week Big Business left unchallenged the downright declaration in President Roosevelt’s Jefferson Day speech in Manhattan that reduction of manufacturing costs meant not more but less purchasingpower for the nation (TIME, May 4). Though the President appeared to contradict himself a few days later at a White House press conference while elaborating upon the high cost of old-fashioned building methods, his statement was overlooked by no alert businessman. Last week in Los Angeles General Motors’ Alfred Pritchard Sloan, a representative of an industry whose history is most clearly at variance with the President’s observation, delivered the first measured rebuttal to Jefferson Day economics. Said G. M.’s president:

“I sincerely hope that we may have a very broad discussion of that astounding pronouncement before we reverse our industrial technique. I cannot believe that this means what it really says. . . .

“It can be demonstrated beyond any reasonable doubt that those industries which have been most successful in reducing costs of goods and services . . . have at the same time paid the highest wage and have continually raised that wage through evolution. It would naturally follow from what our President says that if the reduction of costs decreases consumption, an increase in costs should increase consumption.It is impossible to reconcile that philosophy with the past record and today’s experience.”