Evening star., 1941-08-06

lnf1atlOn Is
much abused David Lawrence.
term and there have been periods
OF inf1ationary credit which have
been mild in comparison with 9TH
ers. On the whole the word "in-
fation" is used in an alarming
sense when 1t refers to a sudden in
crease In the cost Of living, or, to
put 1t another way. a sudden de-
crease IN the purchasing power Of
money.
When purchasing power Is d.
minished in terms of the dollar, the
price level goes up. Real wages
the actual buying power of wages
drops of 50 that money wages are
no longer an accurate expression Of
ones financial position.
Control Needs Policing.
When commodities are scarce. the
price usually rises. But the Gov
eminent today is endeavoring to say
by means OF price control legislation
that artificial scarcity should not be
allowed to send prices upward and
that prices should be held down by
force OF Government edict. This
interference with the law Of supply
and demand is not always effective,
for theoretically price control can
not be effective unless a system OF
comprehensive policing OF all trans
actions Is introduced.
Bootlegging of materials and the
imposition of special prices where
transactions cannot be easily policed
is always an accompaniment OF
price control measures. Abuses
occur In cash transactions even
more frequently than on . credit
basis. Thus 1t Is reported that
when automobiles are scarce, cash
customers may be given a prefer
snoe tn delivery by individual deal
ers here and there. Control OF
prices Is much easier where credit
sales on the installment plan are
made, though here the Government
itself Is guilty Of an inconsistency
In advocating today what 1t cruci-
fed the major auto finance COM
panies two years ago for doing.
The latter endeavored to prevent
dealers from imposing special fees
on the actual list price Of auto
mobiles but the Government said
this was an undue interference with
the freedom Of the dealer. Tomor-
row the price controls will be policed
doubtless by wholesalers at the be-
hest of the Government and re-
tailers will in large part be checked
up through the channels OF the
original sellers.
Job for a Board.
Price control legislation will be
debated in Congress at length, but
In the end a statute of some kind
will be passed. 1t isn't the kind
Of a task that ought to be left to
one man. 1t is a job for a board
Of I'VE responsible to Congress.
Even Mr.. Henderson, who wants
price control legislation, warns, how
ever, against the belief that price
laws will stop imitation. He does
not say what the other factors are
that must be controlled. But 1t is
an open secret that many advisers
Of the administration believe some
method of enforced savings will be
compelled If dangerous imitation Is
10 be prevented. England has ap-
piled the principle. 1t is accom-
plished by means of a pay roll de-
duction. Instead of paying the wage
increases direct to the worker, the
money is paid by the employer into
a national government fund and
theoretically the money is paid to
the workers at some later date when
spending power is necessary, as, for
instance, when the defense program
Is curtailed at the end of the war
emergency.
During the last eight years there
has been a constant warning by
conservatives that unbalanced budg-
cts and pump printing would in
evitably lead to devaluation OF
the purchasing power of the dollar.
Now. instead of w. P. A. and P. w. A.
pump printing, armament pump
prining has come. Both schemes
are unsound from a long-range
economic viewpoint. What appears
to be prosperity is really synthetic.
Price Control One Element.
1t is gratifying that the admins
tration spokesmen are proclainling
the dangers of imitation even though
they may place the whole blame on
the economic factors growing out
OF the war emergency rather than
on domestic mistakes. Whatever
the cause, America today faces a
huge national debt, rising price
level and a scarcity of needed goods
Since national defense requires sac
rifices on everybody's part, the pub
Lie is likely to accept in these times
price control, whereas in other years
the restraints would be opposed as
interference with the freedom OF
the individual.
Price control is but one element
In a planned economy. And planned
economy is q necessary part OF a