Evening star., 1937-03-17
Lack of Policy.

Reserve Board and Edward F. McGrady.
Assistant Secretary of Labor, are cor
rect in pointing with alarm to the rising
spiral of prices which, unless brought
under control, threatens the evil conse-
quences of imitation Mr.. Eccles' state
ment is ostensibly a defense of the
"easy money" policy adopted and now fol-
lowed as an aid to recovery and denial
that monetary factors are contributing
toward price imitation. Both he and Mr..
McGrady, however, point to the vicious
circle OF rising wages, followed by higher
prices, followed by increased wage de-
mands, which, once begun, is difficult
to halt before the whole structure be-
comes top-heavy and begins to wobble.
Both men take the stand that the OBJ
Vious method of controlling high prices
lies in more production, wider distri-
button of goods at prices which bring
them within the grasp of an increasing
number of consumers. 1t is encouraging
to hear the administration singing this
song.
The factors available for this increased
production and lower prices are all avail
able. There is, Mr.. Eccles points out, no
shortage of labor except in certain re-
stricted crafts where the shortage should
be overcome by an apprentice training
policy. There is no shortage of natural
resources. There is no shortage of
money at easy rates of interest. The
banks are full of money. Here is a
team of three horses that should be pull
ing together toward sound recovery. But
they are not pulling together. AS Mr.
McGrady points out, there is no national
labor policy, although the Wagner act
was certainly designed as one. Some
employers, Short-sighted and selfish,
have spent great sums in espionage
and the purchase of defensive weap-
ons in the warfare that their tactics
encourage. The immediate object of
labor everywhere is higher wages, though
considerable energy now is being spent
cedures utilized for higher wages Higher
wages gained are reflected in higher
prices to pass the cost to the consumer
and, incidentally, to increase profits and
thus keep consumer buying power where
it was before, which renews, in turn,
the demand for higher wages.
AS long as the dog -eat-dog policy
continues and the emphasis is placed on
higher wages and higher prices, the
trend toward price initiation becomes
more pronounced. Industrial statesman
ship does not end with recognition of
labor's right to bargain or to receive
adequate wages. Labor leadership does
not end with the immediate attainment
of higher wages and more power. In
some manner both industrial statesman
ship and labor leadership must be CO.
ordlnated toward increased production
and lower prices, and Mr.. McGrady and
Mr.. Eccles both take the occasion to
point to the powers which, inferentially,
have been denied to the Federal Gov
ernment by the courts There is little
doubt but that the administration will
use the threat of price imitation to drive
home the need for extension of Federal
power over wages and prices, and argue
for the court plan as a method of
obtaining such power.
But if increased production and con-
tinued "easy money" are two essential
safeguards against imitation, Mr. Eccles
mentions third-"a prompt balancing
of the Federal budget and subsequent
retirement of public debt in rela-
tionship to the expansion of private
credit" But here he seems little vague,
suggesting another lack of policy. What
is prompt" budget balancing? He in
fers, moreover, that it is to be achieved
through higher taxation of incomes and
profits instead of curtailed expenditures.
Yet his associates hurriedly explain that
he did not necessarily mean higher taxes
now. The lack of budget-balancing
policy and incentive to curtail expendi-
lures are as pronounced as the lack of
other policies deplored by Mr.. Eccles and
Mr.. McGrady.
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