CREATION AND POWERS OF WAR INDUSTRIES BOARD.

On July 28, 1917, the Council of National Defense made an announcement in regard to the War Industries Board as follows: The Council of National Defense today decided, with the approval of the President, to create a small body to be known as the War Industries Board. The War Industries Board, in addition to other duties, will assume those formerly discharged by the General Munitions Board. The new board will be composed of seven members, working under the direction and control of the Council of National Defense through it to the President. Its members will be direct representatives of the Government and of the public interests. It will be composed of:

MR. F. A. SCOTT, Chairman

LIEUTENANT COLONEL PALMER E. PIERCE, representing the Army

REAR ADMIRAL FRANK F. FLETCHER, representing the Navy

MR. HUGH FRAYNE

MR. B. M. BARUCH

MR. ROBERT S. BROOKINGS

MR. ROBERT S. LOVETT

The board will act as a clearing house for the war industry needs of the Government, determine the most effective ways of meeting them and the best means and methods of increasing productions, including the creation or extension of industries demanded by the emergency, the sequence and relative urgency of the needs of the different Government services, and consider price factors; and, in the first instance, the industrial and labor aspects of problems involved, and the general questions affecting the purchase of commodities.

Of this board, Mr. Baruch will give his attention particularly to raw materials, Mr. Brookings to finished products, and Mr. Lovett to matters of priority. These three members, in association with Mr. Hoover so far as foodstuffs are involved, will constitute a commission to arrange purchases in accordance with the general policies formulated and approved.

The Council of National Defense and the Advisory Commission will continue unchanged and will discharge the duties imposed upon them by law. The committees heretofore created immediately subordinate to the Council of National Defense, namely, Labor, Transportation and Communication, Shipping, Medicine and Surgery, Women's Defense Work, Cooperation with State Councils, Research and Inventions, Engineering and

Education, Commercial Economy, Administrations and Statistics, and Inland Transportation-will continue their activities under the direction and control of the council. Those whose work is related to the duties of the War Industries Board will cooperate with it. The sub-committees advising on particular industries and materials, both raw and finished, heretofore created will also continue in existence, and be available to furnish assistance to the War Industries Board.

The purpose of this action is to expedite the work of the Government, to furnish needed assistance to the Departments engaged in making war purchases, to develop clearly and definitely the important tasks indicated upon direct representatives of the Government not interested in commercial and industrial activities with which they will be called upon to deal, and to make clear that there is total disassociation of the industrial committees from the actual arrangement of purchases on behalf of the Government. It will lodge responsibility for effective action as definitely as is possible under existing law. It does not minimize or dispense with the splendid service which representatives of industries and labor have so unselfishly placed at the disposal of the Government.

In November Frank A. Scott on account of ill health resigned the chairmanship of the War Industries Board, and in his stead the President appointed Daniel Willard, who is also chairman of the Advisory Commission.

FIXING THE PRICE OF COPPER.

The first important regulatory action of the War Industries Board was fixing the price of copper. The statement issued September 20, 1917, in regard to this action is as follows:

After investigation by the Federal Trade Commission as to the cost of producing copper, the President has approved an agreement made by the War Industries Board with the copper producers fixing a price of twenty-three and one-half cents per pound f. o. b. New York, subject to revision after four months. Three important considerations were imposed by the board: First, that the producers would not reduce the wages now being paid, notwithstanding the reduction in the price of copper, which would involve a reduction in wages under the "sliding scale" so long in effect in the copper mines; secondly, the operators shall sell to the Allies and the public copper at the same price paid by the Government, and will take the necessary measures, under the direction of the War Industries Board, for the distribution of the copper and to prevent it from falling into the hands of

speculators, who would increase the price to the public; and third, the operators pledge themselves to exert every effort necessary to keep up the production of copper to the maximum of the past, so long as the war lasts.

The War Industries Board felt that the maintenance of the largest production should be assured, and that a reduction in wages should be avoided. The stipulation that the present wages shall not be reduced compels the maintenance of the highest wages ever paid in the industry, which without such stipulation would be reduced under the sliding scale with the reduction made in the price of copper. Within this year copper has sold as high as 36 cents per pound, and the present market price would be higher than it is had it not been well known for some weeks that the Government would fix the price.

The principal copper producers throughout the country have evinced a most patriotic spirit and for weeks have promptly supplied every request of the Government for copper, without awaiting decision as to price, and agreeing to accept the price which the board should ultimately fix. The proper departments of the Government will be asked to take over the mines and plants of any producers who fail to conform to the arrangement and price, if any such there should be.

FIXING THE PRICE OF STEEL AND IRON.

After prolonged conferences with the manufacturers of iron and steel, the War Industries Board and the steel men on September 24, agreed on maximum prices for a number of commodities, which agreement was approved by the President. The list of prices is as follows:

On October 11 further prices were agreed upon, approved by the President, as follows:

On November 6 it was further announced that the President had approved an agreement made by the War Industries Board with the principal steel industries of the United States, fixing maximum prices, subject to revision January 1, 1918, on certain steel articles as follows:

17% discount from March 15th, 1915, list, f. o. b. Pittsburgh. SCRAP

No. 1 Heavy Melting..

F. O. B.

Consuming point

$30.00 per gross ton

Cast iron borings and machine shop trimmings.......
No. 1 Railroad Wrought.............

20.00 per gross ton 35.00 per gross ton

$3.25 per 100 pounds f. o. b. Pittsburgh

WIRE

Plain wire...

TIN PLATE

Coke Base, Bessemer & Open Hearth........ $7.75 per 100 pounds box f. o. b. Pittsburgh.

In connection with the above, the iron and steel manufacturers have agreed to adjust the maximum prices of all iron and steel products other than those on which prices have been agreed upon, to the same general standard as those which have been.

announced. It is expected that this will be done promptly and consistently in line with the basic, intermediate, and finished products, for which definite maximum prices have been established.

In fixing maximum prices, it was stipulated, as in the case of copper, first, that there should be no reduction in the present rate of wages; second, that the prices above named should be made to the public and to the Allies, as well as to the Government; and third, that the steel men pledge themselves to exert every effort necessary to keep up the production to the maximum of the past, as long as the war lasts.

Measures will be taken by the War Industries Board for placing orders and supervising the output of the steel mills in such manner as to facilitate and expedite the requirements for war purposes of the Government and those nations associated with us, and to supply the needs of the public according to their public importance and in the best interest of all, as far as practicable.

The prices enumerated have been fixed by the President on the assurance of those representing the steel industry that these prices equitably adjust the relations of the steel interests to each other, and will assist them in fulfilling their obligations to give the country 100 per cent of production at not to exceed the prices heretofore announced.

With this spirit of cooperation manifested, no doubt is entertained by the War Industries Board that every effort will be made to bring the production as nearly as possible up to the extraordinary demands resulting from the war.

DISCUSSION OF PRICES FIXED.

METHOD OF OPERATION.

By the secretary of the War Industries Board, Lieutenant Bingham, I am informed that the agreements entered into with regard to copper and iron are handled in the following manner:

"The Raw Materials Division of the War Industries Board has appointed a Director of Copper Supply and a Director of Steel Supply. The copper and steel interests have appointed Trade Committees who, under the supervision of the directors each in his department, allocate Government orders in the various trades and use their influence to prevent purchases being made by either department or by an individual outside of the Government at prices above those agreed to by their industry.

"Should any individual or corporation sell any of the articles upon which a price has been fixed at prices above those fixed,