AT THIS writing the Used Machinery Industry has the “honor” of being the first to come under the commandeering and requisitioning power vested in the President by Section 9 of the Selective Service Act. The law upon which Defense Commissioner Henderson has based his authority for price-fixing of used and rebuilt (second-hand) machine tools became effective March 1, 1941.
In this issue of SURPLUS RECORD we have tried to point out some of the many reasons which led up to this drastic step. There is little squawk on the part of the dealers, because the majority feel that the ceiling prices allowed are fair enough. But the question is whether or not this regulation will have a tendency to “freeze” surplus machines in plants that might ordinarily release them for more important Defense work.
It was only a few short years ago that there was a surplus of production machines. Dealers absorbed most of this equipment and held it for the future. Manufacturers disposed of many of these surplus tools, using this recovered capital to install new—faster production—machines in their place. Competition and lower prices on manufactured commodities made this step necessary.
Today, the reverse of this situation exists. Can the used machine tool dealer survive in face of these regulations? The answer lies in the experiment. The best price regulator is the law of supply and demand, but during an emergency drastic measures must be adopted. The success of this venture will be governed by the willingness of the manufacturer with surplus tools in his shop to sell them at a price commensurate with the new order of things.