Evening star., 1942-05-11
Forced Savings
Win Support
Of Henderson
General Freezing
Of Wages Also Seen
As Possibility
Earlier Tax Story on Page AID
oteI

Earlier Tax Story on Page AID
By the Associated Press.
Members of the House Ways
and Means Committee said today
that Price Administrator Leon
Henderson had told them COM
pulsory savings of some kind and
possibly general freezing of
wages might be necessary to
combat imitation
Mr.. Henderson was quoted as hav-
ing strongly endorsed Treasury rec
concentrations to lower personal in
come tax exemptions to 5000 for
single persons, $1,000 for married
couples and $500 for dependents as
he warned there was a danger of
imitation unless surplus purchasing
power was absorbed. Present ex-
emptions are $750, $500 and s4O0
in each category.
II went before the committee to
outline what I consider the infla-
tionary potential" Mr. Henderson
said after two-hour discussion
with the members behind closed
doors. And what I said varied not
bit from what I have said pub
licly about the gravity of the situa-
tion."
One committeeman said he OBJ
tanned the impression that Hen
derson believed that freezing of all
wages would be necessary even
tually" to stop imitation.
Another said Mr.. Henderson ap-
parently had in mind recommend
ing to President Roosevelt that such
a step be taken soon.
The price administrator was re-
ported to have strongly opposed a
general sales taxa levy which
many members said may be neces-
sary If the Treasury's goal of So
TOO, 900 900 In new revenue is to be
achieved.
More Drastic Exemptions.
Later, talking to newspapermen.
Mr.. Henderson said, Naturally /
Endorsed the Treasury's proposals
for reduction in exemptions
"As matter of fact" he said,
my own thoughts carry me to even
more drastic reductions in income
exemptions
He did not elaborate on that point.
L went through the Presidents
seven points (for controlling the
cost of living and indicated that
the stand / was taking was that
taxation should be used, but not
be singled out"
Sterilization of wages was one
Mr.. Henderson said he fully sup
ported that program. He declined
to say, however, whether he meant
by that that wages and salaries
would be frozen at their present
levels.
Mr.. Henderson said he appeared
before the committee at the re-
quest of Secretary Morgenthau to
outline what / consider the highly
inflammatory potential for imitation
that confronts us"
Il have been reviewing the effect
OF the war program on civilian life
and, as indicated before, the actual
supply of consumer goods by De-
cember / will be down "a per cent
from January and that brings us
to the per capita basis of 1885"
Situation Highly Explosive.
He said the prospects were that
in 10 or IL months from next De-
cember well be down TO the per
capita of 1882, with about 280 to
300 per cent of the per capita in
come
IF that isn't enough of a. poten-
tial, I don't know one when I see
one" he remarked. For that rea-
son I was urging the committee
to consider the added seriousness
of the potential in connection with
the tax program, pointing out that
even with every bit of control and
stabilization we can get the situa-
ton is highly explosive"
Mr.. Henderson said that he had
expressed opposition to a sales tax,
explaining that under existing regu-
lations, the sales tax would be added
to an existing price.
With drastic reduction in the sup
ply of civilian goods, a sales tax,
in addition to other arguments
against it, would add to our diff
culties in doing a rationing job in
the lowest income groups"