Evening star., 1942-04-26
Henderson Reody for
Unpopular Work
By Open L. Scott.

some people who have had TO give up
their cars for lack Of tires II now is to
be felt By all people who are TO be
placed upon short sugar rations.
All along the line. shortages OF goods
are to develop There already is
shortage Of gasoline and fuel oil in the
East and Far West Nearly everything
made OF metal soon will be scarce and
then will become scarcer. There is a
developing shortage OF wool War de-
mands may cause a shortage of cotton
goods. Some kinds of foodstuffs are to
become scarce. Scarcity is TO become
commonplace in the months ahead.
Yet, along with scarcity is going a
super abundance of dollars in the hands
OF the people. An oficial estimate is
that the American people after paying
all Of their taxes and doing their ordi-
nary saving, are TO have $50, 900, 900 900
left over to spend in 1912. That is
larger number Of dollars than went into
the entire national income during 1929.
Another Official estimate. at the same
time. is that there will be only about
s65 .ooo 900 900 worth of goods and serv-
ices-at present prices-on which 70
spend that $4,000 900 900.
Here, then, is s2l 900 100000 that is
going to run around loose to cause all
kinds of price and imitation trouble un-
less it is brought under control.
The job Of controlling that vast amount
Of surplus money falls on the broad
shoulders of Leon Henderson. He also
has the job of seeing that the food.
clothing, tires and metal products that
become scarce are divided up fairly
among the people of the country. In
effect, his is the job of applying the
pinch to the public and making the
public like it.
To perform this task successfully, Mr..
Henderson must take several steps. all
Of them painful, all Of them unpopular
with politicians.
One of those steps, the most important,
calls for drastic taxation. The taxes
that Treasury Secretary Morgenthau
proposes barely touch the income of
families earning less than $4,000 year.
Yet the bulk of the surplus dollars will
be found among the masses Of people
with incomes under this amount. Mr..
Henderson insists upon income taxes that
reach down and draw away some of these
dollars. Congressman shudder at the
prospect.
A second step is forced saving. If
Congressman are TO balk at drastic tax
alton then they might agree to take
money away from people with a promise
to return at least part Of that money
after the war. Mr. Henderson also in
sists upon that. But again the Treasury
and Congress are baking. They want
first to find II people will not save
enough Of their own accord to check
imitation. The most conscientious will,
but they are sure to suffer because the
others will use their surplus dollars to
gather in the available goods at the
expense of those who do save.
Another required step is a ceiling on
wages and farm prices. AS the billions
in surplus dollars start to churn up
prices, workers will demand higher and
higher wages thereby accelerating the
inflationary spiral, Mr.. Henderson is
prepared to beard labor and farm lead
ers by forcing them to accept a firm
ceiling on wages of workers and prices
of farm products. Once more, however,
he is up against opposition In Congress
and also at the White House, where the
political effect of real imitation control
is feared
On the basis of the present outlook,
Mr. Henderson apparently is not to sue
ceed soon in his effort to get an effec-
tive control over surplus income.
That leaves him with two steps that
he can take They probably will have
only a temporary success unless the
other steps of drastic taxation-forced
savings and wage and farm price cell
ings-are taken as well. The two added
steps are these:
First, the establishment Of ceiling on
many wholesale and retail prices. This
ceiling then would be enforced by penal
ties that include fines and jail sentences.
So long as so much surplus money is
allowed to be free, the policy probably
will have to be to keep the lid OFF the
prices Of many goods and services so
that there will be gap through which
lnfiationary steam can blow of.
Second, and growing out of the first,
Is the widespread use of rationing cards.
If prices Of essentials are to be held
down, people with increasing amounts
of money 10 spend will exhaust available
supplies in first one field and then
another on first come. first served"
basis. That is unfair, and in the case
of essentials 1t will become necessary
to ration to make sure that all people
have a fair share of what there is to
eat, wear and use for heating and trans
port and other necessary things.
The result is that sugar rationing,
now to start, is just the first of many
Nationwide rationing projects.
Mr. Henderson has seen all of this
coming for a long time. He is probably
the one key Gvernment oficial who has
understood ever since May, 1910, what
the developing war would mean for the
United States. His record shows that he
foresaw and tried TO do something about
the shortages that would develop in
metals, rubber and other products and
services.
In his own field of price control Mr..
Henderson took hold with very finsy
powers and worked wonders in prevent
ing runaway imitation such as devel-
oped early in the last war. Up until now
it has been possible by firm policies and
threats to keep prices from running
away. From now on, however, the rise