Evening star., 1943-07-02

the ration list. But we cannot hope
in q period OF total war to increase
the supply of all necessities suffici-
emily to relieve the price situation.
To reduce the price Of key neces-
sities or even to hold some of them
at present levels, we either will have
to reduce producers prices and dis
tributors' margins or we will have
to use subsidies.
That does not mean that we can
achieve sterilization by subsidies
alone, without firm price and wage
policies, adequate fiscal measures,
and positive programs to assure that
adequate supplies of essentials at
legitimate prices will be available
in the legitimate markets.
Points to Canada, England.
But the experience Of other coun-
tries like Canada and England does
demonstrate that limited subsidies
can and must be effectively used as
a key weapon to control imitation.
The alternative to such action
would be more costly to the Treasury
and to the people. If we do not
take the course Of action I have
suggested, we shall be charged with
having failed TO stabilize the cost
of living, as the act of October 2,
1912, directed US to do, and there
will be increasing demands from
the workers of the Nation for a
drastic modification OF the Little
Steel formula.
If a 10 per cent overall increase
in wages should occur as a conse-
quence of our failure to stabilize liv-
ing costs, that added cost of labor
alone would cause an increase Of
not less than AZ per cent in the
general level OF prices. That would
increase our annual war costs ap-
proximately $4,000 100000. For We
are spending 100 billions per annum
for war and every rise of l per cent
in the prices the Government pays,
adds approximately one billion to
| the Governments war expenditures.
say approximately because some
of the expenditures would not auto
matically be increased. A 10 per
cent wage increase would. more
/ over, increase the cost of living by
at least Az per cent and would cost
consumers at least $4,000 900 900 q
year.
And, what is more. If We should
have to abandon the hold-the-line
order and to allow wages to rise We
would have no assurance that we
would be able to hold living costs
stable even at higher level. Rising
costs would continue to press against
the price and wage levels and these
would be forced higher still. Rising
wages would add to the excess pur-
chasing power. and an enlarged in
flationary gap would make the fiscal
task OF absorbing excess purchasing
power by higher taxes and enforced
savings unmanageable. These with
meager wages and small fixed in
comes would be ground below the
margin of fair subsistence.
I need rot tell the Congress the
devastation which will be wrought
far and wide, on the farmer, the
worker. and the businessman. il
the fires of imitation ever got out Of
control. The farmers will never for
get the deflation following the last
war and the sufferings they then
endured.
Reports Price Climb Checked.
To protec: the farmer it is not
necessary to oPpress the consumer.
The way to protect the farmer is
to authorize the Commodity Credit
Oorp. to Gay the farmer what he
should get for his products and to
sell those products at loss If need
be to keep the cost of living down.
That may be a subsidy. but that is
| the only wsy to avoid imitation which
will be rulnous to farmer and con-
sumer alike. If We prohibit sub
sides and allow the cost of living to
rise, as this bill does, whatever sup
port prices We make to the farmer
will be nullified by the imitation of
all prices and all costs
have just been informed that the
preliminary figures indicate that be-
tween May Is and June is there was
decrease of l per cent in food
prices. This il the first decline in the
food price index in more than a
year. This bill would wipe out that
decline and start anew rise in the
cost of living. I cannot by signing
1t share the responsibility for that
rise and its disastrous consequences.
ThosS in command of our war
economy like those in command of
our armies must be endowed with
adequate authority to meet emer-
gency situations as they arise.
Subsidies to help hold down liv-
ing costs and at the same time pro-
tect the farmer should be applied
only in strictly limited and clearly
defined circumstances. Such sub
sides should be confined to goods
essential to the maintenance of a
reasonable wartime standard of liv-
ing for the people. Wherever the
grant of subsidies at fiat rates
would involve gross windfall profits
for low-cost producers, professors
or distributors. they should be
granted on a differential basis to
cover the special burdens of small
business and high-cost producers.
Urges Congress Corporation.
do not intend to permit farm
prices and farm incomes to be de-
pressed. Today the aggregate net
income of farmers like that of the
workers is larger than ever before.
AS result of my recommendation OF
September T. 1912 that a floor be
established for farm prices, Con-
gress by the Act of October 2. 1912.
guaranteed to farmers 80 per cent
OF parity on most farm products
during the war and for at least two
crop years thereafter-a guaranty
given to no other group. If further
payments to farmers are necessary
to enable them to make the added
outlays required to increase the pro-
duction of war crops, those payments
should and will be made.
But unless the Congress leaves
with the executive branch the means
OF seeing to it that further increases