The Daily Alaska empire., 1945-05-03

 trols after the confusing however for several reasons. The four administrators cannot make up their minds whether the real danger will be rising prices falling prices. They imply at point that exactly the opposite principles should govern wage fixing as govern price, fixing And they fail to draw sufficiently clear distinction between what is to happen after VIE Day and what is to happen after final victory"
 So far as the period between VIE Day and the final end of the is concerned, they are wholly right in insisting upon the continued control of wages and prices For the period of the war with Japan alone will present essentially the economic factors and problems the war against Germany and Japan combined The chief difference will be one of degree. Mir Byrnes has already announced that when Germany is defeated there will be release of resources from muniton production of about 20 per cent in the first three months and additional per cent in each of the next two quarters. These reductions will indicate small scale some of the economic results of peace. Provision must be made for the conversion without delay of freed resources of
 labor and factories to civilian production The period after VIE Day should be utilized also for some transi tional control policies But the main probem-unless this minor conversion is mishandled-will still be to combat the mflationary war pressures. Elements ln both labor and industry, with the let-down following partial victory and perhaps the oo-easy assumption of quick victory Japan will strain at the bit and want irksome controls removed. But as the
 fundamental needs and inflaonary pressures will remain the control agencies will need and must have the fullest public support to hold the line.
 The four administrators would have been well advised at this time to stop at that point But they go on to discuss what will happen after final vic tory" Here they cannot seem to make up their minds as to whether the real danger is "a runaway price rise" or postwar collapse of values. They seem to fear both simultaneously. As long either danger exists any rate the administrators want to hold on 10 controls
 Now there is vital difference between Govern ment prcefixing in and Government price-fixing in peace. In wartime we want the greatest possible of weapons. Peace production must be to make this possible It does not matter if civilian production is incidentally held down by price policies as long essential needs met and war production utilizes all the otherwise unused pro ductive resources
 But in peacetime want to encourage the great est possible production of civilian goods and services We can do this only with free markets which means free wages and free prices In free market economy prices thermometers whose function it is to tell the truth about conditions Prices rise most where the shortages are greatest They fall where there are surpluses Production then concentrates at the points where the greatest profits exist In this way the most urgent shortages tend to be relieved most quickly
 To freeze wages and prices in an economy is like freezing all the thermometers in hospital at 986 degrees This might give false assurance of nor maty But the doctors would be deprived of essential part of their knowledge of what was wrong with the patients and to that extent would not know what remedies to apply. Rising prices are symptom of inflation rising temperature is a symptom of disease. To cure imitation We must remove the basic cause which is deficit financed by new bank credit and currency If remove the cause the symptoms will take of themselves. An even more serious danger than rising prices after the war, we should forget would be paralysis of production if prices fixed by the Government did not allow a sufficient margin above costs.
 After VIE Day, in short, must keep wage and price controls must adhere firmly to the line until final victory in the Pacific We must begin to think now about our transitional policies after VP Day. But the burden of proof should be placed on those who wish to continue wartime wage and price control, in whole or in major part, when peacetme comes rather than those who wish to terminate it. We cannot have real test of free enterprise unless it is really free.