Evening star. [volume] (Washington, D.C.) 1854-1972, 1940-12-22
Economists Map
Drastic Curbs
On Initiation
Expect Little Price
Rise, but Want to
Be Prepared
BY IRVING PERLMETER,
Associated Press Business Writer.

BY IRVING PERLMETER,
Associated Press Business Writer.
Like firemen who purchase equip
ment for fighting a catastrophe
blaze which may never develop, adj
ministration economists are devils
ing methods of comba ting imitation
from the multi-billion dollar defense
program, although saying they do
not expect it.
Admittedly, the current situation,
with the Government putting unpre-
cedented sums of money in circula-
ton in the acquisition of weapons,
contains elements tending to in
crease prices. After prolonged study,
however, the professional economists
in the Government are of the opin-
ion that there is no real threat of
imitation.
In general, here are their tenta-
tive conclusions:
l. There will be slightly higher
prices and greater mass spending
power in terms of dollars (although
those dollars may not buy as much
as at PRESENT..
2. After decade of depression,
the country can stand such a mild
imitation, if it can be called that;
perhaps ought to have it.
3. If real imitation threatens, it
can be checked.
Oversimplified, what causes an
imitation is this: When money is
plentiful, large number of would
be buyers bid against each other
for desired article and boost the
price. The seller naturally, will
take all he can get.
Forced Saving Talked.
One of the methods the econ
omists have discussed for preventing
this situation is Government COM
pulsion to force people to save part
of their money instead of spending
it. In England. this method is prac-
tically in operation already, except
that moral and patriotic pressure
has been substituted for govern
ment edicts in coercing the people
to save.
Usually, this method has been de-
fined as law requiring citizens to
put a portion of their earnings in
the bank each week or month But
one of the other ways figuring in
Washington theorizing would SIM
plify the plan further by requiring
employers. to pay part of the pay
roll in Government bonds instead
of cash.
The idea behind this method is
to keep people from bidding up
prices by depriving them of the cash
used in the process.
While the method has some advo-
Gates, others in prominent places
have criticized it as unnecessarily
drastic. Like shooting a tame cat
with buckshot,'' said one.
This group thinks that taxes and
special price and material controls
can be used to strike at individual
price mutations. They believe auto
mobile prices. for instance, can be
kept in line by threatening manu-
facturers with loss of steel and
other vital materials under the pri-
critics system.
Tax Power a Weapon.
If it's soda pop, for example, that
is getting too expensive, the Gov
eminent could put progressively
higher taxes on this item so that
it would become impossible to make
more money out of pop by raising
the price.
Not the least of the restrictive
methods contemplated is moral sua-
sion, which is said to be in much
greater effect already than most
people realize. There's no law
against raising prices now, but peo-
pie who do it are apt to hear from
some important people about it.
If moral suasion fails. the econ
omists contemplate publicity de-
signed to organize public resent
ment and virtual boycott of manu-
facturers raising prices unwar-
rantedly.
AS perhaps a final resort, the
economists said, imitation could be
made impossible by law, as is done
in Germany, where the government
sets prices and wages, DEGREES who
can york where and at what bust
ness. specifies what banks and in
vestors can do with their spare cash,
regulates the movement of money
into and out of the country, and
checks nearly every other part of
economic life.