Evening star., 1943-10-02
Se|ective Subsidies
To Fight Initiation
Favored by Vinson
By the Associated Press

! Dy tile hSSOClateQ Press.
Selective subsidies coupled with
adequate taxation are an integral
part Of the anti-inflation program
of Fred NJ Vinson, economic stabil-
ization director.
If the alternative is between the
selective use of subsidies to hold
down the cost of living or permitting
living costs to rise precipitately or
even gradually" he said in a radio
speech last night, lit is my judgment
that the American people would elect
to use the resources of their Govern
ment to hold the line for the dura-
ton"
The tly-announced dairy sub
sldy, Mr.. Vinson said, is case in
point. He recalled that dairy inter-
eStS had urged an increase in prices
averaging about 2 cents a quart at
retail, instead of the subsidies, with
the argument that such boost
would mean little to the consumer.
1t might have been easier he said.
for the Government to accede to
that demand, which was in line with
the call of some other agricultural
interests to permit food prices to
find their own level.
Cites Initiation Cycle.
Then other commodities in the
food and other fields would make
similar representations which pro-
duction costs have increased. Wage
earnerS, in turn, would demand
higher wages as an offset to in
creased living costs. To grant all or
even a small part of these demands
would constitute an abandonment of
the stabilization program"
That, he said, would be the cycle
of imitation.
In speaking of funds for subsidies
he mentioned no figures. However.
the War Food Administration has
proposed a billion-dollar fund to
keep prices doWn-and production
up-through system of crop sup
port loans, subsidies and Govern
ment resale of commodities at a loss
where necessary.
Mr.. VlnSon spoke on the eve of the
first anniversary of passage of the
Sterilization Act Since then, he
said in summary of the year:
Prices for clothing have been
stable Rent has held firm
:. The cost of house furnish
lngs has increased only slightly.
While other living items went
up about Az per cent during the
past II months. food prices went
up about 8l2 per cent. But even
in the food field, there is evidence
OF definite progress in stabilizing
consumers cost.
The average straight time hourly
earnings for manufacturing indus
tries have risen about per cent
during the past IL months.
The tools have been forged to
protect our economy against the
ruinous effects of rising prices and
wages, and we have demonstrated
that We know how to apply them"
Farmers Ask Subsidy Plan.
Meanwhile, organized farm groups
called on Congress yesterday to write
ban against consumer subsidies
INTO legislation extending the life of
the Commodity Credit Corp.
They took their position in state
ments before the House Banking
Committee. Their plea apparently
had strong backing within the COM
mittee. Chairman Steagall late in
the day, registered his support of
the witnesses, saying that they
wanted increased prices rather than
subsidies because of the uncertain
ties of the latter.
Unless granted an extension, the
CCC will expire January /. Congress
granted the agency a six months
extension in July after President
Roosevelt vetoed another measure
which contained the subsidy prohi-
bition.
Edward A. ONeal, president of
the American Farm Bureau Fedora
ton, told the committee that at
tempts are being made to convert
the Commodity Credit Corp. into a
colossal Santa Claus to distribute
rebates and bonuses to the public
at large
He urged, however, continuation
of the life of the CCC, with clauses
to bar use of its funds except for
commodity loan and price support
program.
Earl Smith, head of the Illinois
Agriculture Association took
similar position.