The Waterbury Democrat., 1938-02-18

competitive market forces lntenS1fleS the downward pressure on all other prices"
 Those industries" he said, that have maintained prices and cur tailed output should seek the res- toration of profits through increased rather than through restricted out put"
 Text of Message Washington, Feb. IS - U.P) = Following is the text of statement prepared at the presidents request by his price-study committee:
 "This administration has from the beginning pursued 8 policy designed to promote full employment of our human and material resources. That continues to be our policy. The productive power of our work CTS and our resources, if fully util- ized, can provide and maintain na- tional income far above any levels we have yet reached.
 "An important factor that deter mines whether we shall succeed or be blocked in our endeavor to attain full employment and high level of income is the behaviour of prices. In this connection careful attention must be given to: CD The relations of the prices of various groups of commodities to each other; @ The relations between commodity price levels and the level of debt burdens and cost; (3) The direction and rate of movement of the general price level. To further its broad objectives the administration has, therefore, in its agricultural, industrial and monetary programs necessarily been concerned both with the relation of the prices of groups of specific com- modities to each other and with the movement of the general price level.
 Must Fit Needs
 "The measures employed at any given time to further this policy must fit the needs of that time. A year ago there was ground for con- cern that 8 too rapid rise in the prices of some commodities was en- couraging speculative boom. Dur ing the past six months, on the other hand, the general price level and industrial activity have been declining. Government policy must be directed to reversing this def1a- tionary trend.
 Not All to Advance
 "ThiS does not mean that all prices should advance, nor that the rise should be rapid. Prices of dif- ferent groups of products must be brought into balanced relations to one another. Some prices and some costs are still too high to promote that balanced relationship between prices that is necessary for sustain ed recovery. Continued high. prices of many of the commodities not sub- ject to highl ycompetitive market forces intensifies the downward pressure of all other prices. Those industries that have maintained prices and curtailed output should seek the restoration of profits through increased rather than through restricted output. 0 Some at Highest Levels
 'The prices of some items are still at the highest levels reached in 1887; some are even higher than in 1929. When high prices sharply cur tail sales there is real danger. This is shown by our recent experience with housing. A year ago there was serious shortage. We had unused productive resources ample to over- come the shortage. Yet all the ma jor elements in housing costs ad- vanced so sharply by the bring of 1887 as to kill promising expansion of activity in an industry whose restoration is vital to continued re- covery.
 For industries. such as agricul- ture, that operate at high level of capacity even when business activity is at low levels, the restoration of profits must come primarily through higher prices. Higher prices in such industries and increased output In other industries will, by increasing profits, encourage new investment in replacement an deXpanSion of equipment. This is necessary to full recovery.
 "The average family will benefit from the business recovery which a balanced price structure will foster. Increased employment and more continuous income should much more than offset any increase in the cost of living. Recently wholesale prices have declined markedly, yet that decline has been reflected in the cost of living only to a very slight degree. A moderate rise in wholesale prices at this time should only slightly affect living costs. h. comes of most families will increase while the cost of what the house. wife buys should show littN change. The average family will enjoy a higher standard of living.
 Tt is clear that in the present