Evening star., 1942-02-08
Economics of Price
Control
BY Frederic J. Hdskin.

ly passed by Congress was the longest
debated issue of the emergency period
so far is indication that in the field Of
economics there are more divergent views
than in the realm of politics Of course.
an element Of truth may exist in the
report that certain selfish interests un-
duly delayed the bills passage. but allow
ing reasonably for that. any issue which
claims the attention of Congress for
almost six months can be none other
than controversial. The fact that the
bill finally came through largely as a
compromise measure, and was signed by
the President somewhat reluctantly
because Of deficiencies which he and mis-
advisers saw In it, is further evidence
that there Is no meeting Of all minds
on the economic horizon.
Economics is a difficult and compli-
Gated field to explore, and In 1t are thou
sands of experimenters. There are eco
nomic theories which have been ex-
pounded for more than 100 years, theories
that have never been practical, yet their
exponents never changed their minds
during their lifetimes, and their follow
ers have been equally insistent that these
theories are sound. One brain-truster
cannot convince another.
When it is realized that money Is
the most sensitive commodity in the
world, its value being subject to thou
sands of acts upon the part of the in
diyidual, organized and unorganized
business, and government, then the dol
lar and how much of any commodity
should be had for 1t, becomes a never
ending cycle Of Interpretation. Thou
sands of volumes have been written on
every phase of economics, but the great
est labyrinth of all comes in the realm
of price control. And on that subject.
too, there are as many opinions as there
are chapters dealing with it.
Members of Congress had experts as
counselors, and these experts were drawn
from all schools of thought, ss they
should have been, but they brought to
Capitol Hill the same divergent views
which they held as teachers and authors.
In some instances the failure of the
experts to agree only clouded the issue
and delayed a vote on the bill. There
Is an old adage that regardless of ad-
vice, every man believes his own busi-
ness judgment to be sound. Even when
he fails he never makes an outright
confession, blaming the outcome on some
minor point and holding that, in the
main, he was right. Each expert ad-
hered to this belief.
But while the price control law now
is effective and of great interest to the
people of the country, the public should
not be disappointed if Congress is fire.
quently called upon to make amend
ments, even many drastic changes. In
fact, as time goes on and conditions
alter, and supplies of basic commod-
tiles decrease or increase, it is more than
likely that the present form of the bill
will be only a skeleton. Such has been
the experience of all other countries,
belligerent and nonbellgerent, in the
formulation Of plans and laws to control
prices.
Many examples of this constant change
in price control measures could be cited,
but Canada has followed course which
seems more likely to be pursued by
the United States. What the Dominion
is doing today in controlling prices has.
therefore, more than a passing sig
niicance.
When Canada declared war in Sep
tember, 1889, her economic position was
similar to that of the United States at
the time. There was a margin or re-
serve Of unemployed labor and of idle
industrial plant capacity. To bring those
of rising prices and inflationary trend
seemed necessary and was invoked for
almost two years. To q degree this has
happened in the United States.
In Canada, the board appointed to
administer price controls for a long
time applied its vested powers to only
few commodities, gradually changing
when need arose. Its primary aim YVES
to protect consumers against shortages,
but at the same time permission was
granted for a gradual rise in prices in
order to enlist all the countrys produc-
tive forces. This policy was followed
until about six months ago when it be-
came evident that overall price control
measures must be applied and the in
fationary process stopped. These two
steps were taken, and in addition there
was a freezing of all wages, salaries.
rents on residential and business prop
critics, rationing of industrial needs and
general curtailment of public spending
by drastic taxation, war loans and war
savings campaigns.
The ceiling on prices applies to so
many items that there are only q few
left untouched, and the board has power
to bring these under its jurisdiction
should the need arise Wages takes in
IL essential services and contains pro-
vision for payment of cost-of living bo-
muses. in the event living costs rise, as
measured by the official Government in
dex. 1t was this projected matter Of
freezing wages and making some pro-
vision for the wage Garner when the
cost of living got beyond his income
that helped to prolong the debate on
this country's price control bill. Many
thought it was a mistake not to include
for workers, and an even greater num-
Der predict that in time this will be one
Of the amendments.
Canada, to very large degree, Is not
so directly in the path of war as the
United States. Yet that British do
minion junked the piecemeal policy Of
controlling prices and made clean