Evening star., 1941-04-12
New Price Controls

| gram which seems Indicated by the
Presidents executive order creating
the Office of Price Administration
and Civilian Supply is necessary
outgrowth of the restrictive effect
which the defense program has had
and will continue to have on the
supply of consumer goods.
Saul Nelson, economist in the Bu-
reau of Labor Statistics, has reported
an increase of five per cent in food
costs since 1889, and from all indica-
tions, according to his report, living
costs in the United States are start
ing to 60 up" Primarily, it is to cope
with this anticipated rise, rather than
present costs, that the new agency
under the direction of Leon Hender-
son has been set up.
Just how the price control agency
will go about its new tasks remains
uncertain, even as its legal authority
to act is somewhat cloudy. A rea-
Sonably accurate estimate of its
probable procedure may be obtained,
however, from the steps which have
been taken already in this emer-
genCy, and from the pattern followed
after the United States entered the
first World War.
In its attempts to check actual or
threatened price advances deemed
to be unreasonable, the Government
so far has depended chiefly on the
voluntary cooperation of industry.
This voluntary effort, on the whole,
has been successful with respect to
the Governments own purchases,
and the So-called draft of industry"
provisions of the Selective Service
Act authorize the President to take
over manufacturing plants on fair
rental basis if their owners refuse to
fill defense orders at prices deemed
reasonable by the Government. This
authority does not extend to prices
fixed by producers for sales to pri-
vate buyers, however, and this may
explain why Mr.. Roosevelt, in an
nouncing the establishment of the
new agency, said that it would en-
phaSize protection of the American
consumer during the emergency pc
riod. In this connection it is sig
nlflCant that Mr.. HenderSOn'S agency
is directed to determine and pub
lish" such prices as are deemed fair
and reasonable; to take all lawful
appropriate steps to facilitate their
observance, and to recommend what
ever new legislation may be neces-
Sary to carry out the price-control
policy. Presumably, this instruction
to ask for new legislation will be
acted upon if the desired voluntary
cooperation is not Forthcoming.
During the last war price controls
were enforced partly through pub
licity and partly through an elabo-
rate licensing system which, in
effect, gave the wartime Food Ad-
ministration the power to drive a
non-co-operating concern out of
business by denying it access to
necessary raw materials and other
goods. At the end of the last war
there were 263,737 firms, individuals
and corporations under license by the
Food Administration. From August
10, 1917, to December 80, 1918, the
enforcement division revoked 1876
licenses for violation of regulations
In addition, an unknown number of
licenses were revoked by State food
administrators.
At this time it is hoped that there
Will be less occasion to use drastic
measures, as the evil inherent in
Splraling prices is better understood.
There are also other factors in the
picture, such as the anticipated
sharp increase in taxes, which will
tend to hold down consumer buying
power and thereby check any trend
toward dangerous inf1ationary
movement. In any event, that is a.
danger which must be warded off,
for the United States would be in
vlting economic disaster if the end
of this war found it saddled with a.
greatly inflated price level.