Evening star., 1943-11-21
The Subsidy Showdown

The House is scheduled to vote this
week on one Of the most important
domestic questions Of the war, yet
1t Is an issue which, curiously enough,
seems to have aroused but little pub
lie interest. The vote will be taken
on the Steagall bill to end the
authority Of the Commodity Credit
Corporation to pay food subsidies
after December 81. Approximately
$500 100000 will be spent on sub
sides this year, and OPA Admins
traitor Bowles wants to spend around
$500, 100000 next year.
This issue is important to the
people because defeat for the sub
sidy program will certainly bring
higher food prices It is also i'm
portant because of the influence the
result will have on Government
policy. In all probability the bill
will be passed in the House by
large majority. 1t is expected that
it will then be approved in the
Senate and vetoed by the President.
Thus, the real fight probably will
come in an attempt to override Mr..
Roosevelt's veto.
1t is not possible, within any
reasonable space limitation, to dis
cuss all aspects Of this matter. But
the main points, subject to some
oversimplification, can be set out.
The principal argument of the
subsidy sponsors is that wages will
rise If food costs rise, and that we
will then have a severe imitation. In
word, they say-probably with good
reason-that we are in a position
where the real choice is one between
subsidies and imitation.
The most persuasive argument of
the opponents runs along two main
lines. First, they say, we are in our
present unhappy position because
the administrations policies have
been faulty from the beginning. Very
few object to subsidies that go di-
rectly to producers to increase the
production Of selected high-cost
crops. But they object strongly to
subsidies that serve to reduce prices
to consumers without stimulating
production. Their alternative is to
let prices rise until they reflect a
fair profit. In defense Of this view
they say that the President, in
promising to hold living costs to the
level of September Is, 1912, disre-
garded the rise in wages, both under
the Little Steel formula and in over
time pay. AS one result, it is said,
farmers were forced to compete with
industry for help and had to pay a
great deal more to secure workers.
This has made it impossible, without
subsidies, to maintain the old price
levels, and the opponents say the
best solution is to let prices rise. So
far as the average" American is
concerned, this might be fair enough,
for the increase in his actual earn
ings has been greater than any
present or prospective rise in living
costs. But there is another group
of Americans-15,0 900 900 or more
whose incomes have not kept pace.
And no one seems to have any plan
for taking care Of them.
Finally, the subsidy opponents,
while denying that the prospective
advance in food costs in the absence
OF subsidies would justify general
wage increases, seem to feel that the
administration is going to be forced
by pressure from organized labor to
scrap the Little Steel formula, re-
gardless OF what happens to the
subsidy program. And on the basis
OF reactions to the settlement in the
coal case, there is more than little
reason to believe that this will come
to pass.
All Of this presents a confused
picture, but it does not exaggerate.
One thing, however, is clear. If the
subsidy program is approved, we may
still have higher wages and infla-
ton because of administration weak
ness in dealing with labor. But if
the subsidies are killed, the Little
Steel formula certainly will go out
the window and imitation will
move in.