Imperial Valley press., 1942-04-12
Wages, Profits to
Be frozen Under
Contemplated Plan
Administration Ready
To Junk Halfway
Initiation Controls

WASHINGTON, April II.
(UP)-The Roosevelt admin
istration is about to junk its
present system of selective
price control in favor of over
all ceilings on prices and wages as
part of four point attack on in
flation, it was learned on most re-
liable authority today.
Two executive orders, one freezing
retail prices and another dealing
with wages salaries and bonuses,
have been prepared. They are ex-
rected to be issued in a week or
two, although their final form is
not yet settled.
The program, devised to meet an
inflationary situation described as
explosive" by Price Administrator
Leon Henderson last week. was
shaped up at White House con-
ference yesterday. Besides Hender-
son, those attending were Vice
President Henry A. Wallace, Bud
get Director Harold d. Smith, Fed
eral Reserve Board Chairman Mar
riner S. Eccles and Secretary of the
Treasury Henry Morgenthau, Jr.
The program is understood to en-
brace;
| Increased taXeS-much in eX
cess of the $7600,000,000 program
for which President Roosevelt asked
III his January budget message
Part of the taxes MAJ be in the
form of compulsory savings for in
dividuals and corporations.
2. Universal price control, involv-
ing freezing of retail prices as of &
certain date and the licensing of
wholesalers and retailers.
3. Wage control on the pattern
Of the Canadian system which froze
wages last December. The Canadian
system provides for some adjust
ments of wages to the cost of liy-
ing, but no other increases
4. frightened credit controls de-
signed TO rut business more nearly
on a cash basis
Honderson's office said last night
the cost of living has increased l3
per cent since outbreak of the Euro
pean war-a danger sign" of a SER
ious price spiral and estimated
that uncontrolled initiation would
add 100000 Oc0.O00 to the nations
war costs.
With government Spending on war
contracts putting more money I'm the
wage earneris pocket and many con-
sumers goods taken off the market,
officials estimate that excess pur-
chasing power now approXlmates
$2i 00.O00.OOO a year.
Drafting Of the program follows
mounting congressional demands
Tor more rigid price control and
gave rise TO speculation that PreSi-
cent Roosevelt may send congress a
special tax message. The house ways
and means committee. now holding
hearings on the S7,600OC9.OO0 pro-
gram. is scheduled 20 conclude It's
deliberations April 81
Some administration officials. in
Henderson. are understood
t. favor virtually doubling the tax
program Among proposals report
edly under consideration Is a COM
pulsory savings system for corpora
tionS and individuals.
In the case of corporations. the
plan repeatedly under consideration
would involve those whose effective
tax rate including normal. surtax
and excess profits leyies totaled
more than 80 per cent of earnings
Any taxes in excess of 30 per cent
of earnings would be credited 10 the
by the treasury in
bonds.
In the case of individuals II would
mean an additional Withholding tax
on top OF the levies proposed in the
pending treasury program. The
of the extra tax would be
paid to the taxpayer In bonds.