Detroit evening times. (Detroit, Mich) 1921-1958, 1943-05-17

l. " - . - ~ - '' ~ - ~ =
About +. The Better
BY FttE MtttoN
WASHINGTON. May II Wal
" ter Lippmann, an elder
statesman OF coIumni>tS. has
Whacked the administration for
failing 10 come oHt IN defense
and explanation Of its food sub
>ld> program
With enthusiasm. Mr. Lipp-
mann has defended the policy
Of paving vast GoNernment sums
in subsidies. saying It IS neCcS-
Sary TO avoid initiation
The administration seems un-
likely 10 follow Mr. LlppmannS
counsel a, from its standpoint,
II would appear that the less
SAID on the subject. the better.
The food subsidy, IN reality
* a secret price increase You
VIII pay for II, but YOU viii not
know about it The subsidy Is
to apply thus far TO certain
kinds of meats, coffee and
butter.
Mr.. Jesse Jones. RFC. is 10
pay the professors Of these
products The meat packers, The
coffee grinders, and dairy men
"a certain amount of federal
money for each pound or ton
they manufacture The process
Sor viii get his check free with
out doing anything to earn Or
deserve II, in somewhat the
same manner as the AAA sent
checks around among farmers
for not growing anything.
NO ONE knows what il VIII
cost. The government,
which is always conservative IN
such estimates. if in no other
way. says the bill will run $500
600 900 to $500. 900. 900, presum-
ably for a year, although no
definite time was stated IN the
announcements.
The eX-price fiXer. Leon Hen
derson. once testified before a
Senate committee that COM
plete food subsidy program such
aS he had IN mind would cost
s. 600, 900, 900, presumably for a
year
Whatever il costs. the federal
treasury pays IT, which means
YOU. the whole people. will pay
II in taxation eventually, plus
interest on the debt until you do.
Mr.. Lippmann and other adj
vocates of the policy no doubt
appreciate these undenlable
facts, but Justify the policy
nevertheless, on the grounds IT
is an ant-inhationary measure.
In truth, II seems to be the
opposite. 1t has direct lnfa-
tionary character,
THE money paid out by the
L RFC will be raised by selling
bonds to bankers. All the
banking journals and financial
authorities, even some IN the
treasury, already are loudly be-
moaning the inflatlonary impli-
cations Of the increase in the
public debt held by banks. They
rightly say this eXertS pressure
for financial initiation.
But the subsidy is directly
inflationary in another way. The
professors get this bounty from
the government without per
forming any work for IT. and
thus their incomes are enlarged.
The theory Of the thing is that
they Will pass some of this gov
eminent gift on 10 the farmers
IN increased prices they pay for
COWS and hogs. milk. butter,
and coffee wherever the coffee
farmers areb.
Nothing in the deal requires
the professors TO give producers
anything, but producers Will no
doubt get some of IT. When and
If they do, their incomes Will be
increased. Thus inflationary
pressure is promoted by the
subsidy rather than being mltl-
gated by It
DUT Mr., Llppmann and other
- Shier advocates, say the
government was faced with de-
mand by farmers for increased
prices on one hand and by neCcS-
SIty of holding or rolling back
prices Of foods on the other 10
avoid another general labor
wage increase.
The price OF the subsidy, bad
as It l. they seem TO think, IS
less dcplorable than the mia