The Waterbury Democrat., 1941-12-17

EW8UM cent u muHJHt ~ has gone up 8M per cent since last March, and iiM per cent since the beglning of the defense effort. Also, since last March, there have been wage increases which average out at about 10 per cent. In other words, wage eaf1ierS As Q class are now ih per cent ahead of tie game but in another month all wage gains will have been cancelled out by itl- creases in the cost of living, real wages will be relatively no higher than they were last spring, nobody will be any better of. l
 Locking ahead a little, taking q peck into the next spring and sum" mer, there are signs of 20 per cent increases in sight. Even if the ih per cent per month increase rate should hold steady, it woud take only l3 months to account for Q 20 per cent rise.
 THIRTEEN BILLION EXTRA
 From c larger, national point of view, it shapes Up like this:
 Some 967 billion have HOW been appropriated for national defense, Since the beginning Of the war in Europe, September, 1889, prices of everything have gone up about 1 per cent q month. Thus the cost of tho defense effort, on the basis of e67 billion appropriations, iS St3 bile lion moro than it would be if prices remained level. And f the Vics tory defense program requires An expenditure Of some 9lb0 billion, then the iiAationary overhead aligkt amount to more than the entire cost of the last war, Ss7 billion.
 As of September, l94i, the coun- try was in relative economic bale aiice. Increases in the costs of live ing were absorbed by increased wages paid out of increased profits and earnings which resulted from using the countfys productive cas pacity to the fullest. For l042, hows ever, thero 4 an apparent S77 bile lion supply of eonSumorg' goods, with an 99S billion demand. The difference is the 90 billion iIlGlations khP WAlACl AESGa1 CVklWVAG
 Price control is not enough. Al. location of materials for civilian uses, control Of savings or excess spending capacity and other similar measures must be taken to keep this lrldiationAry gap from getting out Of hand. A tax which would absorb this 90 billion has been suggested, but Henderson points out that anys thing of that sort would Do c good bit like rain, falling on the just as well aS the unjust.
 If tho United States is to wage 6 war calling for increased production, 1t must do aS every other country already in the war has done and control that production. Loss Of control Of the productive capacity in italy, says Henderson, iS probably more damaging than British bombs UP TO SENATE
 That being the case, the need for control over oil clements of the cost Of living becomes little more uns derstandable, and 1t is with this preface that the .. 8. Senate begins confederation Of price control legig. iation. The price control bill passed by the House and sent to the Sen. ate is generally admitted to be to. tally inadequate.
 The Senate committee on banking job that the House bungled, has Q and currency, which takes over the much more intelligent grasp of the problem. It was apparent ct the opening sessions of the committees hearings at which Leon Henderson testified, thatt he Senator's Glass, Barkley, Maloney, Downey, Taft, dnd others had some appreciation of the fact that the cost of living was an important element in the cost of the war and that more defense could be secured in making the dol. lars buy more through price control than by permitting imitation to make the dollars buy less.
 What this means is simply that if the cost of living Is permitted to 90 up, then wages must be permitted to go up to meet the increased cost of living, Increased wages mean only increased costs of war.
 The traditional congressional farm policy has been to let prices rise. Unless this is changed, and some sort of discipline put on the prices of farm products, then the country is in for a repetition of World War experience in which the cost of living rose more than 10 per cent.