The Wilmington morning star., 1946-06-30

ever, cannot be half-stabilized. We
cannot quarantine initiation. High
er prices for the things that farm
ers and landlords buy would in
evitably force up farm prices and
rents. In the case of farm prices,
this Is required by the parity pro-
visions Of the law. In the case OF
both farm prices and rents, gen.
eral increases would be forced
upon us by simple Justice and the
hard facts Of business and eco
nomicS.
This bill, therefore, gives
only the delusion Of protection
against rising costs of food
and shelter. 1t would delay
their rise a little. But the delay
would De long enough only 20
cause unnecessary hardship for
landlords-not long enough to
bring real benefits to consum-
ers and tenants.
The spectacular increases in
the prices of manufactured
goods which the Taft amend
ments would cause, right in
the beginning, are far in ex-
cess of anything which indus
try needs to earn generous
profits and obtain full produc-
ton. The increases are SO large
because the formulas for COM
putting them are bonanza form
ulas.
The Taft amendment puts into
prices the profit per unit of sales
which the industry received TO:
the particular product in the year
1941. That a a year in which
manufacturers and professors re.
ceived a much greater profit our
of each dollar of sales than il
anyone of the five peacetime year:
which preceded 1941 and more
than in any one of the following
five wartime years. Indeed, 1874
profit margins were half again a:
great as in the banner year o.
1929. Today, however, the volume
of sales is greater than that o,
1941 and it is going to increase
steadily if initiation does not STOP
it. Thus. at the very time wher
we should be getting the benefit
of high volume in the form of low.
er prices, the Taft amendment
would initiate prices.
"Pyramiding Costs"
In the case of products like
automobiles, washing machines
and refrigerators which are just
returning to the market, the Taft
amendment produces especially
unreasonable prices. This is be
cause the amendment adds tc
prices all the abnormally high
costs arising from temporarily
low volume and change-over con.
ditions.
The Wherry amendment gives g
final boost to prices by requiring
the pyramiding OF manufacturers
increases att he wholesale and re
tail levels.
OF course profits ample TO pro.
vide the incentive for full produc-
ton are what makes the American
free enterprise system work
Prices must not be inflexibly held
Increases have been granted ano
more will have to be granted te
remove impediments to produc-
ton. The Taft amendment, how.
ever, in the name Of stimulating
production, promises peak profits
on every product even where pro
duction is already going at full
blast and profits are eminently
satisfa Glory. AS industry after in
dustry accepts the invitation o.
the Taft amendment in an attempt
to make good profits better,
prices will 60 up and up.
In addition, the industries ir
real need Of relief will tend to be
lost in the shuttle. The OPA, al.
ready criticized for delay in
these deserving cases, will be in.
creasingly unable to act promptly
to break production bottlenecks.
There is a grim irony in The
fact that the Taft amendment. IL
defended as a stimulant to pro.
duction when in fact it will great
ly impede production.
The evidence is readily at
hand. For weeks we have seen
meat and other commodities
withheld from the market in
anticipation Of higher prices.
The simple fact Is that the
average business mar or farm
er who knows that his price
will soon be higher will not
sell any more goods this week
than he has to-be they suits
or sewing machines or cattle.
The manufacturer with a pric
increase pending would natural
slow down deliveries as much a
his working capital and his stol
age facilities would permit. A
the same time. the knowledg
that his supplie-s had their ow
| ip,creocAe 4 u,o,y1l 1aad hiY