Excerpts from the Press Conference

THE PRESIDENT: I have got a lot of news today. I suppose I might as well forestall questions—a number of them. That would be the easiest way.

First, on this conference that is just over, I think Chairman Taylor gave you the gist of it. We discussed the needs on national defense, Army and Navy, from many angles and the message will go up to the Congress as soon as I get it written. I cannot give you the date yet. If I get it written by Thursday next it will go up then and, if not, then on Friday. I want to get it up Friday at the latest. No details.

On the question of these small business men that we defined so carefully the other day, I find there are about 500 requests which have already come in. Of course it is physically impossible for me to see all 500 of them, so we are arranging for Secretary of Commerce Roper and Assistant Secretary Draper to see them, probably next Monday although the date has not been finally set. That will be over in the Department of Commerce and they will talk things over. I suppose they will probably elect their own chairman to preside over them with the assistance of Assistant Secretary Draper and the Secretary, if they can both be there. When they finish their discussions, it is my hope that they will send, of their own choosing, about ten or twelve of the people who have been there around here to see me. I will see them when they come, at the conclusion of their discussions over there.

That seems to be the only practical way of handling it.

I got word that I was to be asked a question. I have been thinking that question over and I have written out the answer so that there won't be any question as to the answer.

The question was this—I think it was Fred's, but I don't know.

Mr. Storm: I had a question for you on steel prices, Mr. President.

THE PRESIDENT: Fred's question was, "Do you agree with Mr. Fairless that steel prices can't be reduced without cutting wages?"

You will all get copies of this. The answer is this:

(Reading from a Press statement, released in mimeographed form.)

"I'm afraid it won't help for me to answer that question again.

"I have said so frequently—and I do not know how to say more clearly and unequivocally than I have already said-that I am opposed to wage reductions.

"I am opposed to wage reductions because the markets of American industry depend on the purchasing power of our working population. And if we want to restore prosperity we must increase, not decrease, that purchasing power."Now, those are words of one syllable.

"There may be a special hourly wage situation in some building trades—

"That is what I referred to in the Message."—in some localities which so far as the total yearly earnings are concerned may call for different treatment, but even there our primary purpose is to increase and not decrease the total of the annual pay of the workers.

"Is that clear?

Q. Yes, sir.

THE PRESIDENT: [Reading] "Now as to prices.

"A mass production industry depends on volume for profits."

That is why it is a mass production industry.

"No mass production industry can expect to make a profit when the volume is small. The steel industry cannot make a profit at 30 per cent capacity but it can at 50 per cent or 55 per cent of capacity."

And remember, of course, that in the case of the steel industry-on the figures I am using— 100 per cent of capacity means three shifts, 24 hours a day operation, and, I think, six days anyway and maybe seven days a week. So a hundred per cent means running everything they have wide open, 24 hours a day.

"The only way to get volume up is to produce goods for a price the public will pay. A mass production industry in its own interest should ask for its production what the people can afford to pay.

"But that does not mean that such price reductions can come out of wages. Those who believe in the profit system must recognize that those who get the profits when business is good must bear the losses when business temporarily is slack. Those who get the profits when industry gets the volume are the ones to bear the risk of such price reductions as may be necessary to stimulate and restore volume.

"Those in charge of a well-managed and solvent industry should no more consider casting the burden of a temporary business recession upon their workers than upon their bondholders. To cast such burden on bondholders is financial bankruptcy. To cast such burden on its workers is not only moral bankruptcy, but the bankruptcy of sound business judgment.

"Industrialists kill the goose which lays the golden egg when they keep prices up at the expense of employment and purchasing power. Industrialists kill the goose which lays the golden egg when they cut wages and thereby reduce purchasing power. Either policy is self-defeating and suicidal.

"If industries reduce wages this winter and spring, they will be deliberately encouraging the withholding of buying-they will be fostering a downward spiral and they will make it necessary for their Government to consider other means of creating purchasing power."

Now, the reason for that is two things: First, from the statistics we find that a number of businesses in a few sections of the country—not many, for it has not receded to any length at the present time—are in the process of reducing wages. The other reason is that there have been whisperings of a further effort on the part of a few industries in those sections and other parts of the country to reduce wages, hence this statement today.

It is all in words of one syllable. It answers every question that can possibly be asked, and there we are.

Q. Mr. President, if the Steel Corporation persists in its stand—

THE PRESIDENT: What is that?

Q. If Mr. Fairless and his colleagues in the Steel Corporation persist in their stand that wages must be reduced if prices are to be reduced, what is the next step?

THE PRESIDENT: Well, the step was this statement. That was the next step.

Q. What is the step beyond that?

THE PRESIDENT: Now you are becoming "Jiffy."

Q. Mr. President, John L. Lewis told the Mine Workers Convention this morning that labor will resist any downward cut in prices as well as wages, meaning—well, of course he won't object to price cuts if they do not affect the wage scale, but they will fight price cuts if they mean wage cuts. Have you any comment on that?

THE PRESIDENT: I said exactly the same thing here. If price cuts are based on wage cuts, they are wrong. I have also said that in some industries we all know that price cuts may be made without reducing wages. . . .