The Waterbury Democrat., 1942-01-08

EVSTy eAptIlellCc Ol war ItdClit on prices may very possibly result l in reducing our standard of living juction, as always, those on the ymallest incomes suffer the most.
 Tn the progress of this world con- gulsion we must meet demand for Tar more goods and services than we can possibly produce and maintain our present standard of living. Our income available to compete for the shortage of goods has increased rap idly. This year it will probably ex- ceed 25 billions of dollars the income which was available to us in 1899, when the war started the upward swing of production.
 Faced with this problem, common to every war economy, we are temp ted to borrow from Hitler's methods We seek to clamp down on all prices by arbitrary laws to freeze them at fixed levels. We propose to put every distributor of commodities under a system Of federal licenses which would give an arbitrary and danger ous power of life and death over commerce and production to one ad- ministrator. This is proposed on the mistaken assumption that it is possible by law to make over our system of trade traditions and prac- tices of 150 years.
 What is the function of "price" in our economy? How did it operate in the last war?
 Certainly no regulations of gov ernment bureau having the force of law can ever entirely regulate price" or can by any stretch of authority, however drastic, control it. We recognize that the price sys tenn is vital to the operation of the law of supply and demand-the balance which keeps our distributiVe system in operation. It is the nec- essary and legitimate means by which in normal times we control the distribution of goods and services At some point of advance a time is always reached in a free and open market at which higher prices re- duce the demand until a balance with the available supply is reached; and vice versa upon the fall of prices.
 There is not now an entirely free and open market because we all in- siSt that the essentials for defense nall have first call upon production. Everything else, except those com nodities absolutely necessary to sup 1ort civilized life must be curtailed. Ne must always remember, however hat it takes Is makers and dis l.bItors of war materials to back up )ne fighter
 For the time being we are pro- posing to arbitrarily take one-quar- ter of all our output in order to sevote an increased proportion of our productive power to defense leejs. Canada has already demon- :trated her ability to take one-third. England has gone far beyond that md is devoting over one-half of Ter production and man-poWer to prosecute the war. Still this is not enough to enable the democracies Q defeat the totalitarian states
 Germany has probably gone further 1t is generally believed that tWo- thirds of her own output and as much as she can ccmmandeer from the nations she has conquered is going into her war effort.
 Here we have not yet reached our maximum effort. We have just be- gun to feel the necessity for Sacri- flee. We have just begun to be con- scious of it through rising prices and higher taxes. Whatever we do in regard to prices or taxes there is no way of avoiding the burdens in- volved
 Between 1916 and 1920 prices of foodstuffs advanced 102%5 CWholesale commodities in general by 2-3 of this). Between 1921 and 1925 they fell by about 80fo. While this did cause individual losses, it did not reach the proportions of a major catastrophe. It was imitation, but not a runaway inflatiOn' such as Germany experienced. It undOubted- " increased the costs Of war and its burden of taxes. It contributed much so the difficulties of readjustment after the war was over.
 FIlCeS nave duedQy dtNdlCtQ since September 1889 by 30fa and appear to be rising more rapidly than they did in the World War. The cost of living has advanced about 10@o. We have learned by experience what the danger is and must plan accordingly.
 What should we do about the control of prices which will not un- dermine our foundations and en- courage bootlegging and "black mar kets?"
 l. By increasing the available production or supply of goods for all purposes. This is the most direct method open to us-the most ob- vious. Increased effort, longer hours better tools, more plants and better raining and avoidance of lmreas- onable and unfair wage demands must all play their part
 ?. By individual saving and in- vesting in government bonds, rathel than by spending now. By insisting hat the government radically reduce