Herbert Hoover to Woodrow Wilson

Identifier

WWP19273

Description

Herbert Hoover writes to Woodrow Wilson defining, in his opinion, unfair profits and how to address them.

Source

Hoover-Wilson Correspondence, Hoover Institution, Hoover Institution Archives, Stanford, California

Publisher

Woodrow Wilson Presidential Library & Museum

Language

English

Text

Dear Mr. President

As you are aware the keystone of the Food Law in its provisions as to control of distribution rests on the provisions against “unjust, unreasonable, unfair....profit”. Now that we have the rpincipal trades under license the interpretation of what is “unjust, unreasonable, unfair....profit” is arising daily.

I should like to recommend to you the adoption of the following principle for guidance of the Food Administration. That principle to be “that any profit in excess of the normal pre-war aberage profit of that business and place where free, competitive conditions existed is deemed to be unjust, unreasonable, unfair profit.”

We have given much thought to this subject and have proposed it as a tentative principle in the great number of trade conferences held in formulating regulations and securing the co-operation of the trades in their administration. The very large profits earned from war conditions prior to our entry into the war have established a fictitious basis of commerce and at the opening of our work this principle was most strongly resented in many quarters but I believe that our steady propaganda on the line that no one has a right to take an extra profit from America at war has now proceeded so far as to enable its adoption in the food trades without consequential opposition.

If you are able to agree with this basis of interpretation it would be of the greatest help if I could have an instruction from you in somewhat the terms of the enclosed draft. If this is done I should like to ask the Federal Trade Commission to make determinations of what pre-war or normal profits were in some of the larger trades - to be determined in either of four ways as the particular business may dictate as the most facile for guidance.

1. Return from Capital invested.
2. Profit per unit of commodity.
3. Percentage upon the “turn-over” of specific commodities.
4. Positive differentials for handling certain commodities between purchase price and sale price.

Yours faithfully,
[Herbert Hoover]

Original Format

Letter

Files

http://resources.presidentwilson.org/wp-content/uploads/2018/10/D09285.pdf

Citation

Hoover, Herbert, 1874-1964, “Herbert Hoover to Woodrow Wilson,” 1917 November 26, WWP19273, Hoover Institute at Stanford University Collection, Woodrow Wilson Presidential Library & Museum, Staunton, Virginia.

Transcribe This Item

  1. http://resources.presidentwilson.org/wp-content/uploads/2018/10/D09285.pdf