Evening star., 1941-04-27
Steady Increase
In nPriceControIs
Predicted
Absence of Authority
Over Wages Regarded
AS Weakness
Special Dispatch to The Star.

governmental supervision of prices
is absolutely essential in wartime if
serious initiation is to be forestalled,
according to a survey of the Stand
ard & Poor's Corp The necessity
for such control has long been recog-
nized at Washington but until re-
Gently the control mechanism had
been set up on a rather haphazard
paSiS
The newly created Office of Price
ADMINISTRATION and Civilian Supply
Or o. P. A.-has been given equal
rank with the Office of Production
Management-O. P. M. Drawing its
powers from number of previous
legislative enactments, the new Or
ganizstion has bl cad control au-
thority While there is some over
tapping authority with the priorities
division of the o. P. NJ, this is ex-
pected to be overcome by close CO.
operation between the two organ
iZations.
The problem of complete price
control is so many-sided that it pre-
sents almost insurmountable diff
culties under any political system
short of absolute dictatorship. Until
and unless this country goes all the
way toward war economy, the price
control authorities will probably rely
more largely on publicity and moral
suasioE than on arbitrary price fix
ing. The mechanism has been eStab-
lished. however, for rigid price fix
ing l. that seems advisable. as was
Illustrated by the forceful action
taker last week in freezing steel
prices
lnf1ati0nary Forces Feared.
Much has been written about the
inevitability of imitation during a
wartime emergency. The economic
history of this and other countries
invariably records more or less seri-
GUS inf1ationary moves during war
periods. The cause of such moves
is. of course, obvious-a shift of pro-
ductive energy to munitions with a
consequent curbing of consumer
goods production at a time when
consumer buying power is being
rapidly increased by full employ
ment and high wages.
The administrc ton at Washing
ton has. however. had the expert
ence of the World War period as a
guide in the formulation of its poll
cies for price control during the
present emergency The price divi-
sion of the old Defense Commission
was set up nearly year ago with
this in mind, although its powers
were severely limited
Recent strength in commodity
prices, however, focused attention
so strongly on the problem that the
creation of a control body with full
powers comes as no surprise to busi-
ness men.
The new o. P. A. has been granted
broad price control powers compar-
able with those exercised during the
last World War by the War Indus
tries Board. but it is significantly
lacking in any authority over wage
scales. 1t can enforce price ceilings
and in conjunction. with the o. P.
M, Defense Materials Corp. S. M A.
(Surp.us Marketing Administration
and other agencies. can control
price fluctuations by increasing or
reducing the supplies of vital COM
modities.
Called Weak Point.
rTI1ic tntol ohcnrao nf f1ripn
troll over the wages of labor is OBJ
viouSly one of the weakest points in
the whole picture OF our controlled
economy Enforcement of any sort
of maximum rate of pay for labor
would be at variance with all trad:-
ton in this country, as we'll as with
the present Government philosophy,
although Mr.. Henderson indicated
recently that he will have decided
interest in unwarranted wage in
creases" AS a more palatable pro-
cedure, the administration may be
expected to sponsor a tax program
aimed at taking away from labor a
portion of its gains through higher
consumer taxes and higher personal
income tax rates.
Through increased taxation of the
consumer the administration could
partially sidestep the ticlllish ques-
ton of rigid control of wages. How
ever, any such course of action would
not solve the problem of the indus
trialiSt in regard to prices. Indus
try will still be pinched between
rising costs and controlled selling
prices.
From all early indications, the de-
gree to which price control will be
put in effect will vary widely as be-
tween individual commodities Stra-
tegic materials such as most of the
metals will undoubtedly be subject
to more rigid control measures than
would be adopted in the case of most
products.
The compleXitv of the problems
(See pPTCES pace E-31