Evening star., 1941-09-30
Mr.. EccIes on InfIution

mI. cCCleS on InTi0rIUn
In proposing the establishment of
a centralized labor organization to
work out with the Federal Govern
ment a schedule of prevailing
wages" for the duration of the pres
ent emergency, Mariner S. Eccles, in
appearing yesterday before the House
Banking Committee, evidenced a
clear recognition of the fact that
control of wages is essential to any
successful plan to prevent imitation.
Since they are major factors in de-
termining prices, Congress would not
be approaching the problem of in
flation effectively if it failed to put
brake on wages and salaries, he said.
With equal forthrightness Mr.. Eccles
declared that industrial strife, during
periods of national peril, when the
country's defense and civilian needs
require full industrial production lis
intolerable."
Though Chairman Eccles, in stress
ing the need for control of wages, has
taken substantially the same position
as that of Bernard NJ Baruch, who
urged that ceiling be placed on the
entire price structure, his views on
the subject of wage control differ
sharply from those of several high
officials This divergence illustrates
the confusion of thought that seems
to exist on this question. Federal
Price Administrator Leon Hender-
son, for example, told the committee
that he favored voluntary agree
ments to stabilize wages, but was
opposed to the inclusion of wage
control in the pending legislation.
Secretary Morgenthau, though
advocating the regulation of agricul-
tural prices, expressed vigorous
dissent, in testifying on the price
control bill, to proposals for the regu-
lation of wages, on the ground that
such action would be "undemocratic."
Had Mr.. Morgenthau frankly ad-
mitted that there are political
objections to wage control, his argu-
ment would have had less of a
demagogic ring. For regulation of
wages, as a means of combating
initiation, obviously is no more "un-
democratic" than the CONSUMPTION
of a million young Americans to
serve in the Army to safeguard the
future and the independence of the
United States at rates of pay fixed by
the Government.
Declaring that the administrations
price control bill does not reach the
heart of the present imitation proc
ess," the BrookingS Institution, in
study made public this week, warned
that the spiral of rising costs can
be checked only through control of
wages and reduction in the prices
of agricultural products. The 81
per cent advance in wholesale prices
since 1889 has been caused by two
principal factors, it Said-the sharp
rise in farm products, due primarily
to Government policies, and not to
conditions of supply and demand"
and the increase in labor costs.
Among the Government policies
which have given an artificial boost
to agricultural prices, it cited price
guarantees, and purchases under the
lease-lend program, where prices
paid are determined by Government
policy rather than by commercial
considerations" Public policies, no
tably mandatory overtime payments
and collective bargaining, with the
support of the Government" have
also contributed to the current in
crease in labor costs, which in turn
is reflected in a sharp advance in the
price level, it pointed out.
The Brookings Institution study
gives a clear picture of the imitation
threat which faces the American
people, and the steps that must be
taken to avert its dangers. The two
most important are the control of
wage rates and farm prices. Halfway
measures, or those dictated by po-
litical expediency, will not be enough.
To achieve their objective-and it is
of vital Importance to the defense
effort and to the American people
that this objective be achieved the
anti-infiation program must bring
under Federal control all the infla-
tionary elements in our national
economy