Colonel House to Woodrow Wilson

Baruch's right hand man, Frederick Allen of Boston, New York and St Louis, has been here for two days, and has made, the enclosed memorandum, which he tells me is Baruch's conclusion as well as his own.Baruch, it seems, does not want to ask you for an interview because of the load you are carrying, and he hopes that I will boil their views down in order that you may have them in condensed form.
I am told from another source that Baruch hopes if you appoint a commission and he is included in it, you will also name Allen and Vance McCormick as the other members.Allen has had ten years experience as buyer for the Simmons Hardware Company of St Louis. He is now connected with Lee, Higginson & Co. of Boston.Vance McCormick would know but little about the purchasing end, but he is a man of such character that I believe his appointment would be generally approved and would give confidence in the commission.Baruch and Allen believe that it is necessary to have fairly high prices in order to stimulate a maximum production, and they believe the more favored firms and corporations should be subject to an excess profit tax which would act as a leveling medium. For instance, many copper companies can produce copper below ten cents. Others cannot produce it much below twenty-five cents, therefore, in order to get them all at work a twenty-five cent basis should be maintained, and the excess profit should be taken from the more favored producers. (I name twenty-five cents merely as an illustration as I do not know the actual figures.)They also claim that high prices would stimulate business and make the flotation of bonds and the carrying on of the war easier. They assert that the United States is the last reservoir of capital and that nothing should be done to depress our industries.
They suggest, in order to get at an excess profit, a three years average be made. (In passing, let me personally say that if this three year average is agreed upon, it should be three years before August 1914 and not three years from April 1917. I mention this because what they have in mind is from 1917 which seems to me unfair as there have been enormous excess profits made since 1914, and unless you use the earlier period the purpose contemplated would not be met.)There is common agreement that something should be done quickly, for there is much evidence that the delay in having a general purchasing committee is working to the disadvantage of a more vigorous prosecution of the war.Magnolia, Massachusetts.July 2, 1917.