Evening star., 1945-09-17

llofAlS A4S1a ~
for three months (nearly a record
for nim) was moved up to be Federal
loan administrator (Which he was
for osAr two months, and the
easiest thing to do was to put Mr..
Davis in his place, and Mr.. George
Taylor of the War Labor Board in
Mr.. Davis place.
In that way Mr.. Roosevelt, i'm
mersed in war problems. avoided
the mental strain of picking new
man. Up to a few days ago Mr..
Davis had not particularly distin-
guished himself as economic stabi-
lizer. He had done nothing very
good but also he had done nothing
really bad.
Recently he drew attention to
himself by remarkable declaration
In which he revealed" a Govern
ment program to raise all workers
wages from 40 to SO per cent. Mr.
Davis thought this could not be
done in less than a year, but would
be completed within five years. At
the same time it raised wages, &C
cording to Mr.. Davis, the Govern
ment" would prevent any rise in
prices.
What of Price Rises?
Asked whether such an increase
In wages would not automatically
raise prices, Mr.. Davis said that that
was "fallacious economic reason
ing" 1t is not so regarded by econ
omists generally. They know ali
the arguments about archaeological
improvements" greater managerial
efficiency" and increased produc-
ton"
Nevertheless those without gov
ernmental, political or labor union
bias strongly insist that to maintain
that any such increase in wages as
proposed by Mr.. Davis can be put
into effect without raising prices is
a manifest absurdity. They further
insist that exceedingly few, if any,
private industrial or commercial
concerns, which raised wages so
per cent without raising the price of
its product, could survive.
In other words, the contention Is
that, if Mr.. Davis is correct, the
Government program to raise wages
SO per cent while preventing any in
crease in prices would amount to
an assassination of private business.
Or. if the wages are raised and
prices go up, then the cost of living
is increased, no one is any better
off-and the imitation danger is
greatly enhanced.
1t is worth noting that few days
after Mr.. Davis revelation" the
CIO Steel Workers Union asked for
a S2-a-day increase for 100000 men
and its solemn president, Mr.. Muir
ray. said he did not think this
would mean an increase in price.
Beyond question the steel workers
demand will be followed by demands
from other unions and by increased
pressure from congressional advo-
Gates of a 65-cent-an-hour minimum
wage rate, all of whom will echo Mr..
Davis lovely idea that wages can be
raised without raising prices, in
creasing the cost of living or pro-
noting imitation.
Cockeyed Economics.
One expects this sort of cockeyed
economics from the press agents of
the CIO and the Communist -domi-
mated American Labor party. One
hardly expects them from a man
holding the post of Economic Sta
bilizer. If this is the Economic
Stabilizers view of the way to sta
bilize our economy and If he is cor
rect about this being the Govern
ment's program, this country is
going to need an awful lot of luck
to pull through.
Naturally, there is some question
of how far Mr.. Davis is authorized
to speak for the Government: of
whether any such important pro-
gram as this would be announced by
any one other than the President, or
whether Mr.. Truman subscribes to
the extraordinary economic theory
that a so per cent rise in wages does
not involve rise in prices; or
whether this sort of smash at buSi-
ness is his idea of the way to en-
courage private enterprise to create
more jobs
There is also the question of
whether Congress, which certainly
Is one branch of the Government.
has been consulted about this pro-
gram. Until there is more light on
these points, perhaps. Mr.. Davis
program need not be taken too Sc
riously-though it does rather fit
In with the so-called full employ
ment" bill.
However, one responsible author
tty asserts that Mr.. Davis speaks
by the book; that this really is a
Government program and that Mr..
Truman is for it. Without congress
sional action, Government cannot
compel private business to accept
this program, but with Government
encouragement it could be enforced
by the unions.
Perhaps, that is the idea and 1t
will certainly be cheered by the en-