The Ely miner. [volume] (Ely, Minn.) 1895-1986, 1942-06-04
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The Office of Price Administrator
is determined not to puncture to any
degree the general maximum price
regulation issued April % and effec-
tive last month.
Two things have every business man
worried about the order. One is the
alag" between manufacturers, whole
sale and retail prices. In some lines
and in some businesses retail prices
are marked up to replacement COST
as wholesale prices increase. That
usually occurs in items that turn over
rapidly, like fresh meats. Such bust
necses and lines are not bothered by
the "lag." But on other items and in
some lines, retailers base their selling
prices on the average cost OF their
current inventory and there is lag"
between wholesale and retail markups.
Such an item might have sold in
March, the base period, for less than
| its replacement cost. Such retailer
is caught in squeeze and is plenty
worried.
The other thing that worries bust
ness is the fact that as yet no effec-
tive brake has been applied to labor
costs, and these can continue to in
crease and in some instances even in
creased considerably between March
81 and April %. There is conversation
in washington about stabilizing wages,
but so far no action that means much
The answer of Leon Henderson to
the second problem is that wages
must be stabilized or the whole price
ceiling will blow up. Regarding pro-
blem number one, Henderson told our
Banking and Currency committee
that he is determined at all costs to
maintain the ceiling on retail cost OF
living items. His plan is to "roll
back" the price squeeze from the re-
taller onto the wholesaler as much as
= possible, and then back onto the
i manufacturer He believes that much
d of the squeeze can he absorbed by
economies effected through simplifi'
y cation of lines, elimination of fame!
ir wrappings, cartons and other sale
promotion items, and by better organ
IL lied and more economical deliver,
ID systems. The rubber shortage AM
y, gasoline rationing will help him OF
to the latter.
If these measures fail to absorb tn
rs squeeze" for an industry or line
v goods, then Henderson plans to resor
m to government subsidies at the manu-
d, featuring level. In the bakery busl
III ness, for instance, he would haV
ne millers sell -four to bakeries at )
ar cents or 81 less than the market pric
rs. and the government would pay tn
On miller the difference. His first attemI
IN to sell that scheme to Congress falle'
e. and it is a good bet that Congress wi
not approve it until and unless tn
he Administration adopts an effecti1
la wage sterilization program to mai
h certain the government would M
ct, simply be substituting continuing was
lg, increases.
IN,
ad 1t seems to me, in view of the!
d. facts, that the best course for ar
er. business man caught in squeeze
w the price order to follow is to fir
y" effect every possible economy he ca
nd in the operation of his business. F
he should 60 the limit in this becau
" regardless of what adjustments mi
be made, there will be considerah
time lapse before they are effective.
AS a second step, the business ms
alt should present his problem in col
,lv else, understandable form both to Il
state OPA director and to his oV
trade association, with plea I
relief. mention the trade associate
-. because OPA does not intend to ma
he adjustments for individual concern
except to a very limited extent
. eoualize conditions in single cor
: munity. OPA's adjustments VIII
made will be on the basis OF an i
dustry or line of goods, and on
4 national or regional organizations
4 business can present problems effe
lively.
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