The Wilmington morning star. [volume] (Wilmington, N.C.) 1909-1990, 1943-11-17
Raymond Clapper Says:
Subsidies Are Cheapest
System For The Nation

WASHINGTON. - Several argu-
ments are made against food SUBJ
sides which seem to make sense
until you take a second look at
them.
For instance, some people write
in saying that the food subsidies
add to the public debt and there
fore only aggravate the danger of
initiation, although tn subsidies
have saved the public and the gov
eminent large sum, probably
billions.
The subsidies do add to the pub
lie debt. They run about $500, 000,-
600 a year-the cost of the war
for three days. But what would
happen II the subsidies were knock
ed out? You would not add that
particular item to the public debt.
But you would add a larger item
to the public debt Just a little bit
later.
For if the food subsidies are
knocked out, prices will go up.
James F Byrnes, director of war
mobilization, says the Government
cannot hold the Little Steel For
mula unless food subsidies e
continued. There would be a
strong wave of wage increases.
And then all of your cost-plus-fee
contracts would begin to crawl up
Seventy per cent of industrial pro-
duction is devoted tc war. In other
words. the Government, roughly
speaking, buys nearly three-quar-
tiers of the industrial output of the
country. Wages are big item in
the cost of those goods So the
Government pays more for the bill
lion of dollars in war goods that
it buys and your public debt goes
up--not by the restricted amount
of the subsidy, but by the amount
reached af er pyramiding it
through the whole economic sys-
tenn.
The cheaper system in cost to
the Government is the subsidy.
But you have to take a second
look to see that.
Another argument is persuasive
at first glance 1t is that the SUBJ
sides are only loading on the pub
lie debt ( charge that will have
to be paid by the American SOL
diers when they return home.
Take the point which I have Just
made and apply it here. The pub
lie debt will be less in the long
run by nolaing down prices, and
by holding the line against infla-
ton than # initiation is allowed to
break loose because the Govern
ment is such heavy consumer.
But there is also another consid-
Grafton. Families of most soldiers
are dependent, partially at least.
on dependency allotments. Those
are fixed amounts Run up prices
and by every cent of price in.
crease you, in effect, cut down the
allotment pay by the same amount.
You either subject families of SOL
diers to what amounts to a re-
duction in their means of support,
or else the government will have
to increase the allowances. There
YOU come back to our old friend
the public debt which then takes
another Jump.
The fight against subsidies has
its real purpose-one that nobody
wants to admit openly-the break
ing up of price control SO that
producers in certain foods an
gouge the nation for all that can
be squeezed out of people at a
time when all consumption is dis
torted by the heavy demands of
war.
Subsidies are paid on some Of
the metals, and to transport coal
and oil to eastern consuming re-
gions. If that were not done the
government would have been left
short of some precious metals
Every dollar of copper subsidy
has saved the government perhans
s28 in price. The eastern indus.
trial area would have had to s,1s.
tain a far higher cost for f,,el