Evening star., 1942-08-09
Canada Lets Living Cost Rise Slightly;
Expects to Pull 1t Back by Autumn
u. S. Officials Watch
Latest Trend for Clue
To Own Problems
By CLAUDE A. JAEGER.

Associs ed Press General Financial Editor,
NEW YORK, Aug. 8.-Canada has
let her cost of living increase a lit
tie, but expects to pull it back down
by autumn.
Because the DominiOn's scheme
of regulating prices and wages in
wartime is one of the most Sys-
tematic and ambitious ever under
taken in democracy. it is watched
with intense interest in the United
States, particularly in Washington.
Therefore announcement in Of
taWa this week chat the average
price of groceries, rent and other
essentials had got up II per cent
above the pre-War level. or "a per-
centage points above where it was
when the governments control lid
was clamped on late last year,
caused an anxious quest for ex-
plantations.
Here is the cost-of living score to
date, in terms of increase over
August, 1889:
England-Up 90 per cent.
United States-Up 18 per cent.
Canada-Up II per cent.
Tied to Wage Control.
Canadas price control scheme is
tied to wage control Not only are
price increases, in general. forbid
den, but SO are wage boosts, but
wages must be adjusted, in approx
mately the same ratio as the cost of
living index. So along with the an
nouncement of increase in the cost
index, the wartime prices and trade
board at Ottawa announced small
wage bonuses would take effect
August IS.
But here is why Dominion officials
think the rise is temporary: Their
control scheme permits what were
regarded as normal seasonal fuc-
tuat1ons in certain food prices, not
ably beef and potatoes. Ninety per
cent OF the rise since the lid was put
on have been in food prices, Of
which 81 per cent was in beef and
potatoes. Said Donald Gordon, con-
troll board chairman, "it is to be ex-
pected that by October /, the greater
part OF these seasonal movements
will have been reversed, and the cost
of living index will be much closer
to what it was October l last"
In contrast with Canada, the
American effort did not start in a
large way until the retail price
freeze took effect last May. AS
powers of the Office of Price Ad-
ministration in Washington now
stand, prices of farm products can
still advance considerably. On
wages, the war labor board has an
nounced general policy of ap-
proving increases to compensate for
the IS per cent increase in cost of
living since January l, 1941. But
the war labor board also reserves
the right to adjust "substandard'
wages.
England's Problem Worse.
England's control problem was
more difficult than either that OF
the United States or Canada, be-
cause 1t imports the bulk of its
food and raw materials. 1t could
not control what it would have tc
pay IN other countries. There was
also the problem of bringing the
materials from overseas. So Eng
lands controls are very largely a
matter of rationing, as well as price
fixing.
The amounts of meat, butter, new
clothes, that you can get on your
rationing card in England is pitt
fully small, by American standards
The cost of living index rose 2s
per cent between the outbreak OF
war, and mid-1941, but with enact
ment of the goods and services act
at that time, has been held about
stable. There have been upward ad-
justments of wages, for large pro-
portion of union contracts in Eng
land provide for adjustments with
changes in the cost of living index.