The Wilmington morning star., 1943-05-29
0PA WAS BASED
ON OLD FALLACY
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Brown or any one else could keep
a rigid ceiling on the civilian price
structure when within the price
structure there were rolling around
and flying around the Army, the
Navy and all their expensive war
ships, tanks, airplanes and what
not?
The supposed justification of this
universal civilian freeze was that
it would prevent ''inflation." But
that was misunderstanding Of
the nature of initiation. For if by
some miracle all retail prices were
held fixed, initiation would still ex-
ist. If money cannot buy goods,
money loses its value, and that
is what initiation is. And since in
war time there is bound to be
more money than there are civilian
goods for sale, merely to make
the goods cheap does not prevent
initiation. At best it merely allevi-
ates the effect of excess unusable
money until the time comes when
there again are enough civilian
goods to restore the real value Of
money.
Therefore, the true object of war
time economic policy is-O-to
assure at reasonable prices the
necessities of life to the mass Of
the people: and-(2>-to drain off
some Of the excess money, and
then to inpound the rest of the
excess until reacetime production
can be resumed.
The object of the price fixing of
rationed necessities - food, fuel,
clothing, housing, Transportation
is social, not financial: to main
tain the efficiency of the people in
their war work. For that reason,
rationine. subsidies and tho "or-
troll of civilian supply are justified,
provided they are administered so
as to insure the possible and the
necessary total production.
The object of financial policy
through taxes and loans, the re-
striction of credit and investment
is in the last analysis to keep
the supply of inflated and, there
fore, deprecated money in cold
storage until it's value can be re-
stored and it can safely be spent.
Therefore, the true line of re-
organization is that proposed in
the jenkins bill, and very ablv ad-
vocated on the floor of the House
of Representatives by Representa-
tive Herter, of Massachusetts. 1t
is to place in the hands of Chester
Davis, who is RESPONSIBLE for the
production of food, the rationlng
and pricing of food as well. Then,
if Mr. Davis cannot eel' FH04 ~
reasonable retail prices after he
has paid adequate prices to get 1t
produced. the difference should be
made up in the form of some kind
of subsidy. The same principle
ought to be applied elsewhere. for
example, to all fuels-whether Oil
or coa1-and the whole business OF
pricing and ~"+'o'~''~' "'2ced N
the hands of Mr.. Ickes.
Then Mr.. Davis. Mr.. Eckes, and
the other controllers of the pro-
duction and distribution OF essen
tials. should become price corn
mittee, presided over by Mr.
Bvrnes, to determine general pol
icy. -
Tho wartime inf1atior-'o+ ue hN"e
that with the compromise on the
R,1nol plan behind us. we can move
on from this largely sterile debate
70 the real task of devising taxes
and other measures which discour-
age wartime spending and promote
the conservation of larger and
larger part of the war earnings
until they can, without the loss OF
their purchasing power. be spent
when peace is fully restored.
In England, boots which can't
y~1pfN