Evening star., 1941-04-27

controls.
In a period Of expanding production,
and particularly in a period like the
present when the whole industrial
machine is to be pushed to the limit,
the control over prices can become vital.
This is a power to control the heart
of the economic system. It's importance
was recognized from the start by Adolf
Hitler, whose system of economic con-
trolls is built around the control of price.
Henderson long has emphasized the
Importance of the price-making machin-
cry to the functioning of this Nations
industry. He came into Government
service in 1884 when he warned Gen.
Hugh johnson that his NJ r. A. was
riding for a fall by turning over to
private industry the right to make its
own prices, subject only TO uncertain
Government supervision. He came to
the attention of President Roosevelt
when, in 1887. he warned that disparities
in prices were heading the Nation for
another depression a depression that
soon showed up. Henderson then
headed the joint eXecutiVe-Congress in
vestigation of the economic system that
got lost in the shuttle when war came
along His selection to head up the
price-control machinery of the arm
ament program followed in normal
course.
In his present position, Henderson can
become this country's economic dictator
in wartime. To fill his job he must
have determining voice in tax policy.
in borrowing policy. in policies that
affect the flow of money He must
exercise authority over wages of labor
and over prices of farm products as
we'll as over prices of industrial products
| To accomplish his objective, he must
have a voice in determining the plant
expansion policy of industry and in
| determining which industries are to
get priority in purchase of available
| materials.
Control of prices is many-sided
problem. Henderson realizes that and
yet is convinced he can carry out that
control effectively if given the necessary
powers. He does not shrink from the
responsibility and isn't awed by the
difficulties involved.
The difficulties are those of potential
imitation.
The reason price initiation threatens
and requires control is this: Govern
ment today is pouring out vast amounts
of money for armament. This money
is finding its way into the pockets of
workers who now have more cash to
spend than ever before in history. How
ever, armament demands are tending to
reduce the volume of goods that indus
try can turn out to supply wants of
ordinary citizens. The result is that
workers with money to spend will not
be able to buy all of the things that they
want to buy. This means a scramble
for available goods and an almost ire
sistible tendency for prices to rise.
A runway price rise is opposed by
Henderson, because Cd sharply higher
prices only cause workers aud farmers
to demand still higher incomes and a
spiral o. rising wages and rising prices
gets under way. 90 Higher prices add
to already immense dollar costs of arm
ament and complicate further a diff
cult debt problem 90 A high price
level complicates the problem of post
armament adjustment when countries
that die not permit price increases
would be in better position to COM
pete for foreign markets than would
the United States.
To keep prices from running away,
Henderson proposes: % To encourage
industry to expand its plant so all pos
sible goods can be produced up to the
limit of labor supply 90 To draw off
some purchasing power through en-
couragement of savings and use of taxes
so workers will store up funds that can
be released for spending when the emer-
gency is ended. 90 To crack down on
those industries that insist upon price
advances without showing factual justi-
ICaJlOn III PROOF JtldI COSIS OtEeTWlSe
will prevent them from making profit.
| (4 To discourage labor from making
unrea sonable wage demands.
Henderson, although a New Dealer,
has never belonged to the wing of the
New Deal that believed in overall Gov
ernment planning, with Fascist twist.
Rather, his consistent position has been
that Government should use every
means in its power to force competition
within industry so the forces of the
marketplace could function to deter
mine prices and wages without more
than a minimum of Government inter-
vention. However, his position also has
been that if prices are to be determined
by decisions of corporation executives
rather than by free-functioning mar
kets. then Government must have
voice in those decisions. The reason is
that prices determine whether the eco