Evening star., 1942-12-18
House Unit Says
0PA |nnperi|s
Home Front
WPB, Small Plants
Agency Policies Held
Threat to War Effort
By the Associated Press.

BY the Associated Press.
A congressional committee to-
day blamed Office of Price Ad-
ministration policies for a
Threatened breakdown on the
home front"
The committee, set up by the
House last year to study the prob
lens of small business, said in a
preliminary report the Nations sys-
tenn of consumer goods distribution
has been seriously undermined and
weakened as a result of" OPA
policies land collapse which might
gravely imperil the entire war effort
appears inevitable unless these
policies are speedily corrected
Part of the blame for existing
conditions, the committee continued,
must be shared by the War Produc-
ton Board and the Smaller War
Plants Corp. operating under WPB.
price Squeezes" Criticized.
1t listed price squeezes" and "in-
equitable distribution of merchan-
disc" as two factors which could
and should be adjusted" by OPA and
WPB.
The committee complained of "un-
necessary reports and complexity
and multiplicity of regulations" un-
der which business must operate,
commenting that while certain ad-
ministrative regulations are a neces-
sary evil" the present situation is
one of bureaucracy run riot"
Unless corrected, it said, this
factor alone will close the doors of
business which might otherwise re-
main open"
"And what is said here about un-
necessary governmental red tape in
the field of distribution of course
applies equally to manufacturing,
the report added.
Unless the conditions complained
of are corrected, the committee said
it would recommend at the next ses-
sion of Congress legislation to
compel their correction in order to
avert the destruction of independent
small business and, with it, the
middle class of this country"
Margins Called TOO Thin"
In a section devoted to price
squeezes." the committee said oper-
ating margins between replacement
costs and ceiling prices ARE too
thin to permit of continued opera
tions except at loss" in some in
stances the replacement costs being
higher than current ceiling prices.
In other cases, it said, retail CELL
ing prices have been so low as to
induce a decline in production of
necessary commodities The outlook
for dairy products was described as
dark indeed" unless OPA revises
retail ceilings "to stop an impending
wholesale slaughter Of milk cows"
Numerous complaints to OPA, the
committee declared, were COM
pletely ignored" or were handled
with so many complications of red
tape and bureaucratic buck passing
as to leave the complainants be-
wildered."
The report added:
Inc obvious practical remedy for
thls Is, OF course, to pass on cost
increases permitted by the Govern.
ment at any level to all other levels,
plus such reasonable operating
mark-up as will protect the retailer
or other distributor against actual
loss and the consumer from unwar.
ranted gougings."
Distribution Discussed.
| In addition ito the burden Of
price squeezes," the report continued,
distributors face acute problems of
obtaining fair share Of available
consumer goods, the conclusion
being inescapable that some method
for an equitable distribution of con-
sumner goods is necessary if many
distributors are to survive"
The committee said it was shocked
to find that the Smaller War Plants
Corp. has had results which were
practically negligible many To-
calities having unused facilities
which could be put into operation
and many small manufacturers
being unable to obtain any help
through the agency.
1T is the considered opinion" Of
the committee, the report added.
that the failure of the program of
the Smaller War Plants Corp, as
evidenced in our hearings. can be
attributed to the management Of
the corporation"
Much of its conclusions, the CON-
mittee explained, were drawn from
prolonged hearings in Washington
and from f1rst-hand inspection
tour of the South and Southwest. A
more comprehensive report, it said,
would be filed shortly.