Evening star., 1942-07-19
Gasoline Draws
First Subsidy
ToCurb Prices
Government to Absorb
increased Cost of
transportation
Rv JAMES MARROW
and WILLIAM PTNKERTON,
Wide World Business Writer.


use of Government subsidies on a
major scale to maintain price CELL
ings was announced this week as
the battle against imitation swayed
to variety of drives and counter
attacks.
The Reconstruction Finance Corp,
made known its intention to absorb
with Government money the in
creasd cost of transporting petrol
cum products by tank cars to the
East Coast which has resulted from
large-scale tanker sinkings.
The increase of az cents gallon
recently allowed by the ONCE of
Price Administration on the retail
price of gasoline in the East is ex-
pected to be rescinded.
That the use of the subsidy de-
vice is really on big scale is indi-
Gated by unofficial estimates that
the move will cost the R. F. c. sub
sidiary. Defense Supplies Corp,
s25o,00o0oo a year.
The effect is to spread the in
creased cost of wartime delivery Of
petroleum fuels in the East to the
whole country, through the eventual
absorption of the subsidy in Federal
taxation.
Farm Price Curb Seen.
An important check on the rise in
agricultural prices also appeared
during the week as the House of
Representatives finally accepted the
Senate's ideas of the prices at which
the Government stocks of surplus
grain may be sold.
In terms of wheat prices, this
meant that the Governments sup
ply could be sold at 83 cents bushel,
instead of the House proposal of
$1.34 bushel, the so-called parity
price.
Price control authorities reached
sort of draw in the semiflnal round
Of the OPA's battle with Congress
for its appropriation for the current
fiscal year.
The Senate approved an outlay Of
$125 100000 for Henderson's Office,
much less than the $4,000, 900 the
administrator had originally said
was absolutely necessary to enforce
ceilings, but $50000,000 more than
the House had approved in its ver-
sion of the bill.
At that, Henderson's better treat
ment at the hands of the Senate
came only as a result of a COM
promise in which administration
leaders had agreed with farm bloc
legislators to limit Henderson's pow
ers over commodities processed from
farm products.
Wage Raise Granted.
On the highly important wage
front, the War Labor Board granted
pay increases of A cents day
to employees OF the little steel" COM
panies and accompanied their order
with a general observation, subject
to some qualifications, that any
group of workers which has not
received a Is per cent lift in pay
between the beginning OF l94l and
May, 1912 is entitled to such an in
crease because of the rise in the
cost of living.
The Steel Workers Union had
asked a boost of 81 a day
Applied to the four companies
which were before the board, the
wage increase was estimated to
amount to about s22,000,000 an
nually, and If granted to all work.
ers in the industry would run to
about s65,0O0,o00.
Chairman Doughton Of the House
Ways and Means Committee indi-
Gated that steps to check imitation
would not go so far as a Federal
sales tax. He told the House Rules
Committee that the administration
would prefer a tax bill without the
retail levy even though that meant
total revenues $250O,000,000 short
of the 7oO,00O,000 sought in the
original Treasury proposals.
War Production Scars
Notes on a busy week: The Fed
eral Reserve Board reported war
production was now almost exactly
half the total output OF all manu.
featuring industries =. Hydroelec-
trio power production, which sup
plies about a third of the country's
energy needs, and which was suffer-
ing severely from drought this time
last year, has gotten break from
a rainy spring .. Everything looks
rosy for the hydro plants for the
balance of the year .. The Railway
Express Agency, biggest truck fleet
operator in the country, reported a
week ago looking around for horses
and wagons, revealed it had OBJ
tanned mileages up to $4,000 in test
runs on a synthetic rubber tire
Rubber trade circles estimated re-
claiming plants can keep busy for a
year on scrap realized in the recent
drive :. A chain store in Philadel-
phia is having good luck with line
of orchids at-for orchids-a mod
crate price Maybe this Is the
| equivalent of the silk shirt of the