Evening star., 1946-10-16
Price Confusion Seen
Only for Brief Period
Sterilization to Be Completed
Despite Dire Predictions
By David Lawrence

By David Lazgrence
Economic confusion resulting from the
sudden change in the administrations
policies on price control will continue
for brief period and then the Nation
will settle down to the operation Of the
laws of supply and demand. Prices will
gradually come down.
For political reasons, of course. there
will be dire predictions by one side of
a tremendous upsurge in prices and a
new wave of strikes while there will be
from the opposite group a charge that
the administrators shifts and fluctu-
ations just before election will not help
matters for the party in power.
But putting aside the politics of the
situation, the most important passage in
President Trumans speech-and one
which, had it not been accompanied by
political argument, would have attracted
more attention-was this:
"The risk in the action we are taking
in removing meat controls is less than
it would otherwise be because production
in general is now increasing at sig
niicant rate. The constantly growing
stream of goods from our factories, our
mines, and our farms is rapidly closing
the gap between demand and supply.
There are now 58,000,0e0 people at work
an all-time high. Industry has pro-
vided jobs for 100000 returned vet
Grams. National income, business profits,
farm income-all these are at an all
time high. Total production of industry
has also reached new high level. The
improvement in production has been
steady and in numerous instances spec
tacular. AS the shortages continue to
disappear the in1ationary pressures
will ease and the need for Government
controls will pass"
Declaration Was Enough.
If the President had confined himself
to that declaration, along with a brief
statement that he had removed meat
controls and planned to remove all
other controls shortly, the effect would
have been stimulating to the Nation.
For Mr. Truman points out that the
time has arrived to allow the laws of
has been all along the real contention
of those who have insisted that in the
| American economic system in peace
| time 1t is more important to remove
| artificial barriers promptly than to
worry about the infinitesimally small
| number who might be enriched. For
the alternative is the enrichment OF
| proiteers in the black market. The
| amount of taxes which the Federal
Government has lost through toler-
/ ance of black market operations is
/ colossal
| In every postwar period there is bound
+ to be some speculation, and unques-
tionably some individuals take advant-
age of the situation, but to withhold
meat from the Nation while the opera
/ tors of the black market thrive Is to
| focus on f1yspeck while overlooking
! a big black spot on the Nations eco
/ nomy.
The reaction of the livestock mar
/ kets to the overnight change was, OF
/ course, no criterion. 1t will take
fortnight or more for cattle in ample
quantity to flow to market and there
may then be a sharp break in prices.
Labor Urged to Wait.
1t is not the change in the meat
supply situation, however which gives
concern at the moment or the future
price levels for livestock. What is more
dangerous is the psychological situa-
ton which may flow from the sudden
removal of controls in other products
and by-productS. The President is
right in warning against sudden in
aation but, on the other hand, the only
real danger of a breakup will come if
the labor groups seek to utilize the
! temporary price situation as a basis for
/ reopening wage scales or for initiating
| new series of strikes
Labor would be we'll advised to wait
few weeks and note the beginning of
a downward trend in prices. For as the
cost of living goes down-and it will be
| forced down by consumers and by the
oversupply Of goods coming to market
in the not-far-d distant future-the argu-
ment for higher wages will disappear
| insofar as it is based on economic
grounds.
When the price control bill was vetoed
last July, an uncertain situation de-
/ veloped but before the second bill had
| been signed there was a tendency to
! stabilize prices The same will happen
now but it will take several weeks, If
not months, for the stabiliZation pro-
cess to be completed.
| lReproduction RIGHTS Reseryedl