Evening star., 1933-07-17
DUAL PRICE FIXING
PROGRAM ADOPTED
Administration Aims to Keep
Them Down and Then
Force Them Up.
BY MARK SULLIVAN.

In the short run, the aim Of the
administration is to keep prices down.
In the long run, the purpose is to force
them up. In the immediate operation
OF the industrial recovery act the
present most urgent effort is to keep
prices CT goods down until after wages
have been raised and after labor has
gone to work In this present purpose
of keeping prices down dealers and
manufacturers are persuaded, appealed
to in their own interest. and threatened
with what remains of the Sherman
however. the fixed purpose Is to have
prices go materially higher than they
new are.
In this contrast between shortlun
and long-run purpose. there IS obvious
inconsistency. but no occasion for carp
ing. To keep prices down for the pres
ent is an essential part of the formula
for recovery In that formula funda-
mental principle is that the first step
Is to get purchasing power into the
pockets of labor; and of course IN
creased purchasing power i5 lot put
into labcr's pocket if prices Of goods
60 up as fast as or before wages go up.
Price Level Underlined.
OF the two purposes, it is automatic
that in the long run it is the long-run
objective of higher prices that will at
some later time prevail. The admins
tration wants higher prices to prevail
at the right time. The question every
business man asks is how soon will
higher prices prevail. and how high will
they go. No prudent person would at
tempt to answer either question. About
the administration long-run purpose
of higher prices, there have been some
definite statements, having official au-
thority which give some light. Presi-
dent Roosevelt said in a public radio
address May 7 that "the administration
has the definite objective Of raising
commodity prices to such an extent
that those who have borrowed money
will, on the average, be able to repay
that money in the same kind of dollar
which they borrowed" But just what
level of prices does the administration
have in mind? The President has not
said. Some of his advisers have infor-
mally said the level of 1924, 1925 and
1926
For more definite light we can turn
to Senator Elmer Thomas of Oklahoma.
Senator Thomas is not an official of
the administration, but on this matter
OF price level he is pretty official all
the same. His authority rests on the
fact that he is the principal exponent
OF imitation and author of the initiation
bill which President Roosevelt EN-
braced. In effect, President Roosevelt
has undertaken to accomplish what
Senator Thomas desires. Senator
Thomas says the desired objective is
an average of the period 1920-33, or
about 1926. In this Senator Thomas
o1
NAL ones from within the administra-
tion. Senator Thomas goes farther in
that he is concrete. He names specific
prices to be attained. This is risky.
1t IS risky for any business man to
figure on specific prices for specific COM
modities. An average price level may
rise to the 1926 level but within that
average specific goods may greatly
vary.
Mentions $1.50 For Wheat.
Senator Thomas mentions sl.5o for
wheat, 81 for corn, Is cents a pound
for cotton. Probably it is unsafe to
count on any specific price for any one
commodity. There is also another risk,
faint, but yet risk. We know that it Is
the primary long distance purpose of
the administration to raise prices. We
know that for that purpose the ad-
ministration has, as Senator Thomas
puts it, "the greatest power ever con-
ferred upon or held by any man or
group of men at any time in history"
Such power should be invincible Yet
a prudent business man should always
reckon that there is at least a faint
possibility that this enormous and COM
pleX structure of control over business
thrown together hastily here at Wash
ington may break at some point. Such
structures usually have in the past
To point out this possibility, how
ever, does not amount to much. It Is
true that in normal times disaster ex-
presses itself in a drop in prices But
these are not normal times. If such a
disaster should happen next week, it
Is certain what the administration
would do. 1t would Immediately make
use of its powers of initiating the cur
rency, thereby making prices higher. 1t
is forgotten, but is fact, that no ac-
tual imitation has been practiced so
far. The only initiation up to date has
been merely psychological The sum Of
it is that in this abnormal time, one of
many topsy-turvy, Alice-in-Wonder-
land conditions Is that accident or dis
aster would lead not to lower prices,
but to higher ones.
(Copyright, 1933)