The National Recovery Administration: An Analysis and Appraisal

By Leverett S. Lyon; Paul T. Homan et al. | Go to book overview

CHAPTER XXIV
TRANSFER OF POWER OVER PRODUCTION AND PRODUCTION CAPACITY
A second major method by which the NRA codes shift control away from individual enterprise and the area of competition is to be found in those trade practice provisions which regulate production and production capacity.
TYPES OF CONTROL
These provisions fall into four general types:
1. Those which provide for the establishment of limitations upon the number of hours within a given period during which machines or plants may be operated.
2. Those which establish or permit the establishment of maximum production quotas for each individual producer within an industry.
3. Regulations which control the creation of production capacity in an industry. The requirements of these are usually referred to as capacity control.
4. Provisions which restrict the amount which an individual manufacturer may produce for purposes of stock. Such provisions are usually referred to as providing inventory control.

The first two of these, machine- and plant-hour limitations and production quotas, have the same general economic effects in the sense that they tend to limit the quantity of a commodity produced. Capacity control, while perhaps superficially somewhat different, has the same effect on the production of commodities but in a longer run sense, inasmuch as it limits the facilities that are created for the purpose of producing the commodi-

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