Evening star., 1942-07-11
Price Subsidy Plan
Reported She|ved by
Administration Heads
Senote Group Approves
l20 Million for OPA in
Big War Agencies Bill
B, the Associated Press.


B. the Associated Press.
The administration was re-
ported today to have decided
against asking Congress for price
control subsidies now, even
though Price Administrator
Henderson has warned that
present ceilings could not be
maintained without them.
Informed legislators, who declined
quotation by name, said efforts to
revive the administration dormant
s75o,0oo,0o0 subsidy proposal had
been dropped, at least until later in
the year.
Mr.. Henderson had told Senate
Appropriations Subcommittee that
in his talks with President Roosevelt
and others "it was always under
stood that there would be instances
and important cases where the price
ceilings of March could not be
maintained unless there were sub
sldy payments of some kind"
The Appropriations Committee
yesterday wrote into 81 1903, 900 900
supplemental defense money bill a
provision which Senator McKellar,
Democrat, of Tennessee said would
bar use of any part of the $12O, ,OOO.-
600 OPA operating funds for pay
ment of subsidies.
U. S. to Resell at Loss.
Previously the administration had
sought authority to Use up to $780,
OO0,OO0 to support the price-control
structure by purchases through the
Commodity Credit Corp. and the
Reconstruction Finance Corp. of ar
tlcles which would be resold to dis
trlbutors at less than their cost to
the Government. The Senate de-
clined to act on this proposal.
The $120,000,000 appropriation for
the OPA was $45 100000 more than
previously voted by the House, but
S4l 900, 900 below the Budget Bureau
figure and $4,000, 900 under the fig
ure Mr.. Henderson set as a mini
mum for operation.
In approving the appropriation
the Senate group wrote in several
restrictions.
One amendment requires Senate
confirmation of OPA employees re-
celvlng more than $4,000 a wear,
Some legislators have complained
that Mr.. Henderson has made ap-
polntments to regional OPA posts
without consulting them-in some
cases giving jobs to their political
foes.
Can Enlarge Staff.
Chairman McKellar of the SUBJ
committee that went over the bill
Item by item, declared the appropri-
alton would enable Mr.. Henderson
to add to his present force but it
doesn't give him nearly as much as
he asked for
We cut down on the number of
lawyers and investigators. and on
travel expenses and items like that"
Senator McKellar added.
The full committee decided also
that none OF the appropriation could
be used to enforce any price ceiling
on commodities manufactured in
whole or in part from agricultural
products, until the Secretary of
Agriculture had determined that the
price SO established would reflect to
the producer of the raw material a
return not less than any of the fol-
lowing: ITO per cent of parity; the
marke5 price last October /; the
market price last December IS; the
average price from 1919 to 1929.
None of the OPA fund could be
used to enforce a regional increase
In the price ceiling of any commodity
on the theory that the rise was made
necessary by increased transporta-
ton costs, unless in fact the cost of
transportation had risen.
Russell Hits Gas Boost.
Senator Russell, Democrat. of
Georgia, insisted on the latter
amendment, declaring Georgia was
being unfairly penalized by the 2h-
cent-gallon increase in the price of
gasoline recently allowed by OPA
In the rationed Eastern States.
Senator Russell said the cost of
bringing gasoline to Georgia had
not increased because it was car
ried in pipe lines. Senator Nickel
lar told reporters the amendment
would also apply to South Carolina
and Florida.
The OPA item was only small
part of the entire bill which con-
tanned more than S1,8OO,0O0, 900 to
operate various wartime agencies
for the current fiscal year, but it at
tracted chief attention because of
the intimate effects of general price
ceilings on every Americans life.
Biggest individual item on the
measure is $1,1OO,000,000 for the
War Shipping Administration, which
plans to operate 1900 to $500 mer-
chant vessels this fiscal year Other
appropriations provide for the Fed
eral Bureau of Investigation, the
Smaller War Plants Corp. War Pro-
duction Board. o-ordinator OF In
ter American Affairs, Office of Gen.
sorship and similar agencies.
Ine Senate committee ralSeu
from s270,000 to $500000 an item
for the Board of Investigation and
Research for Transportation, an
organization which is looking into
interstate freight rates.
Instances Fruit Price Rise.
In connection with the price sub
sidy plan, Mr.. Henderson had testi-
fed that if the OPA had been able
to nav SlO0 100000 in subsidies TO
distributors instead of permitting
an increase of IS per cent in the
prices of canned fruits, consumers
ultimately would have been saved
500 900 900 to 100000.
He said it was the OPA's expert
ence that a price increase at the
source was doubled or tripled before
1t reached the consumer.
ut will cost between two and
three times as much he testified,
''but the big item is that since 1t
,lac - tho coct of living then that