Evening star., 1937-03-21

~ URING the past few days
Washington has given un-
mistakable signs Of concern
over the rapidity of current
changes in our economic situation.
The President himself publicly has
issued words of warning
Slt-doWn strikes. shorter hours and
higher wages are adding to the cost
of goods Prices are going up un-
comfortably fast Crude materials
have been soaring in price, some back
to 1929 levels The cost of living, too.
is rising Suits, shoes, food and
notably rents The latter important
item in every ones budget rose IL per
cent during the past year.
Is this imitation? Has the vicious
spiral started? Are We in for an
other 1929 boom and collapse. or per-
haps something worse? People are
wondering.
Capital keenfy Interested.
These are not mere academic ques-
tions. Wherever buyers and sellers
meet, an Interrogation mark now
hoyers in mems minds Washington,
too is keenly interested; for on the
answer may hang the fate of the New
Deal, on which the Nation has laid its
bets.
One of the objects of the Govern
ment in 1888 was to bring about an
increase in commodity prices. That
was the purpose of the Warren gold
plan adopted by the administration.
We are still feeling the stimulus of
that plan. Of course, it should not
be assumed that the Warrens and the
ThomaSes wanted a runaway price
trend. Rather, they wanted quick
relation" followed by stabilization
They thought currency management
was synonymous with economic man.
agement.
ReStates Monetary Goals.
Only few weeks ago an official
spokesman, Secretary Morgenthau. re-
stated the Governments domestic
monetary goals. as follows:
I'D To attain and, once at
tained, to maintain reasonably
equitable and stable income rela-
tionships among the different
groups: Workers, farmers, busi-
ness men, investors, etc.
"(2) To prevent marked f1uctua-
tions or sharp trends in wholesale
price levels.
"t3 To maintain a moderately
stable cost of living.
90 To foster steadily increas-
ing employment, rising incomes and
an orderly expansion of business
activity"
The spectacular movements of
wage increases, the generally rising
cost of living, and the gyrations of
Government bond prices during the
past few days may well give food for
thought to those whom the people of
this country feel to be responsible for
guiding our national economic we'll
being along those praiseworthy, if, am
bilious lines. Especially is this the
case if sole reliance for the attain
ment of the stated objectives be
placed in monetary and other finan-
cial instruments.
Present Official Opinion.
While the great imitation debate OF
1933-34 revealed that many persons
of influence viewed a managed cur
rency as simple panacea, the official
opinion in Washington today is that
not monetary measures. but other ad-
ministrative powers should be en-
ployed to keep the present higher
wages-higher prices" spiral from de-
veloping into boom and crash.
Should the spiral get out of hand it
will be detrimental to all concerned
labor, capital and Government, the
farmer and the merchant, the worker
and the labor leader, the banker and
the Democratic party-all will suffer.
What are some of the factors which
have been causing the rise in prices?
Without attempting to weigh their
importance, we here set down several,