The Wyandotte news-herald. (Wyandotte, Mich.) 1943-1963, 1945-06-21
The Future Of
Price Control

+, With an European victory comes host of
suggestions for the future of our national
economic sterilization program. Some peo-
pie suggest the partial removal of price
control after We Day; others talk about the
maintenance of price-control after final
victory" Some argue that our problem will
be rising prices, or initiation; others insist
that our main danger will be falling prices,
or deflation
AS for the period between victory in
Europe and the final end of the war in the
Pacific, control of prices and wages must
be continued. The period of the war with
Japan alone will present essentially the
same economic problems as the war against
both Japan and Germany. The main differ
ence between the two conflicts will merely
be one of degree.
Freed resources are being converted to
civilian production now that We Day has
arrived and this will necessitate some tran
Sitional control policies. But inflationary
war pressureS must be suppressed The let
down of partial victory will prompt labor
and industry to ask for the removal of all
bothersome controls, but failure to maintain
controls at this critical point can result
only In the collapse of our economic stabil-
lty and the appearance of distorted prices
The dilemma as to whether the real
danger will consist of runaway price rise
or postwar collapse of values is usually
met by lnSlstence upon continued price
control. Unable to determine whether in
flation or deflation will follow victory, ad-
ministrators of the sterilization program
propose to continue price, and wage-con-
trolls to ensure normally"
A fundamental difference exists between
government price-fixing in war and govern
ment price-fixing in peace. In the former
situations the greatest possible production
of weapons and war needs are demanded
at the expense of civilian production. But
In peace-time the demand is for the great
est possible production of civilian goods and
services. This production can be made pos
slble only in free markets with free wages
and free prices. In free economy, market
prices tell the truth about demands and
supplies. Prices rise when there is a short
age Of goods; production at this point re-
suits IN the accurement of profits for manu-
facturerS and the relief of the shortage or
abnormal demand
Freezing wages and prices in peacetime
might give false assurance of normalcy
but it would not reveal defects and needed
remedies. Rising prices signify initiation,
which can be remedied only by removing
the basic cause.-The deficit provided by ex-
banded bank credit and the issue of new
currency. The fundamental cause removed,
prices once again return to normal and in
flation comes to and end. But the cause
cannot be determined and the effects elm
mated unless the economy is permitted to
operate freely and unimpeded. In much
the same way, deflation can be combatted
only with encouraged investment and pro-
duction if the knowledge of the defects are
discovered through the operation of free
markets.
To ensure freedom from inflationary war
pressures, wage and price controls must
be maintained after We Day until final
victory against Japan But production must
not be paralyzed by the artificial extension
of an abnormal sterilization program in
peacetime We cannot have an authentic
test of free enterprise without free markets,
wages and prices.