Evening star., 1943-10-21
Subsidy Ban Would
Torpedo Price Rule,
Vinson Declares

= Prohibition of the use OF Fedora
funds to subsidize the production O
distribution of food to hold dow
prices would torpedo the stabiliza
fion policy as effectively as an,
.U-boat ever torpedoed a Libert,
ship, Fred M. Vinson. director of tn
Office Of Economic Sterilization tol,
a Nationwide radio audience las
night.
;. Speaking on The Stars radi,
forum, presented in conjunction
with the Washington Board O
Trades first autumn meeting at tn
Willard Hotel, Mr.. Vinson told hi
listeners there is only one real alter
native to food subsidies-highe,
prices. Unless checked, he said
they will result in other rising cost!
until the familiar spiral will be Sc
In motion and imitation will be upor
tus"
, Declaring that good job hac
been done and is now being done il
b, various fields to hold down the cos
Of living, the speaker assailed a bill
reported out by the Banking ane
Currency Committee of the Hous,
which would block the use of Fed.
eral money for subsidies.
Admits Living Cost Rise.
Admitting the cost of living last
May was 81 per cent above the pre-.
scribed level of September Is, 1912
Mr.. Vinson blamed food controls
Four-ffths of the increase between
September and May was due to the
failure to control effectively the
prices for food, he said. pointing
out that these prices scared BY
almost l3 per cent in that period.
The Government had the high
cost OF living on the run through
subsidies to farmers, professors anc
distributors of meat and butter, anC
through a simple dollars -and-cents
ceilings established on most fooc
Items, Mr. Vinson said. but the VOL
colt amendment to the commodity
credit corporation bill would abruptly
terminate at the end of this yeal
all subsidies now in effect, anc
knock the entire structure into q
cooked hat.
Abiding to the fact that subsi-
dies on peanuts and cottonseed and
other domestic vegetable oils were
exempted by the proposed amend
ment. the former Kentucky repre-
sentative charged it was AN obvi-
Gus political concession by those
who rest their case against SUBJ
sldies on the high ground OF prin-
ciple."
Adoption Seen Disastrous.
The immediate, disastrous conse-
ouences II the amendment is
adopted, he warned, will be increases
OF penny for a loaf of bread, OF S
cents pound for butter, ! cent a
quart for milk, 10 per cent in the
cost Of bacon, beef. pork chops. ham
and hamburger; 25 per cent in the
price Of canned vegetables, cents
pound for American cheese. l cent
pound for sugar and to 3 cents
a pound for potatoes.
The overall effect, he said, would
be an immediate increase of to 6
per cent if the existing or imme-
diately contemplated programs were
terminated. Rising prices would be
reflected in rising costs for other
commodities, he declared. and the
increases which this proposal would
require would only be the spark
which might start a sweeping fire
of imitation"
Although the need for maximum
food production is greater than it
ever has been In the Nations his
tory and the War Food Admins
tration has planned the necessary
production, the Senate bill would
defeat this aim because 1t would
prevent the CCC from assuming
any losses II the market fell below
the prices guaranteed, Mr.. Vinson
said.
War Board Praised.
He asserted that those who think
we can let food prices 60 up and
at the same time hold wages at
their present levels are living in a
dream world" He complimented the
National War Labor Board for a
tremendously effective Job in sta
blllzing wage rates" but added its
effectiveness would depend in a
large measure upon our ability to
hold down food prices.
AS an illustration of this he re-
ferred to the boards recent denial
OF shipyard workers plea for higher
wages. The employees contended the
Government had failed TO control
living costs and demanded that the
board abandon the Little Steel"
formula.
The boards action, he said, was
based on the opinion that the policy
should not be abandoned but tha.
IL should be held to. while giving
particular attention to better con-
troi of the cost of food. It's wage
stabilization program depended on
prompt carrying forward of an
nounced policies of the administra-
ton affecting the cost of food.
Subsidies are not new to this
country, MI. Virsor said, stating
that funds from the Federal Treas
ury had been used to help develop
the Nation. The biggest subsidy
of them all, the tariff. was enacted
by our first Congress. he said. He
recalled that ocean-going mail was
subsidized to the tune of $4,000 900
as early as 1891 and that agriculture.
transportation and industries of
most kinds had, at some stage of
their growth, received help from
the Treasury.
Subsidies Less Costly.
Subsidies, he argued. are actually
less costly than higher prices and
not only to the economy but to the
taxpayer as we'll While the Gov
ernment is spending 100000, ,000o oOo
for war purposes he said. higher
prices will send that amount soar
ing, while food subsidies actually
save the Treasury SIS for every dol
lar paid out
MI. VinSon also approved addi-
tional taxes as another weapon in
the fight On imitation, but warned
that our fundamental policy of an
equitable distribution of available