Evening star., 1946-07-03
Price Control Rests
On Stabilized Costs
Congress Should Wait Fortnight
to Study Readjustments
BY David LaiCrence

10 oIuuy headluSfmentS
BY David La,prence
The public is asking what ought to be
done to clear up the confusion resulting
from President Truman's veto of the
price control bill which had passed Con-
gress by an overwhelming vote Of both
houses.
The answer lies In asking a simple
question: Does the citizen favor a policy
of stabilization operated by the Federal
government that really keeps costs down
to reasonable basis or does he favor
relaxation of all controls and letting the
people the buyers - determine their
prices in a natural market?
II the citizen favors continued con-
trolls because of the shortage of goods
and the inevitable tendency of some
producers to charge as much as they
can, then what ne really wants is
policy of Government sterilization of
costs.
There can be no price control unless
all costs are controlled Yet very few
OF the persons who are telegra phing
to the White House their approval of
the veto message or crying out for
return of the OPA really want stabiliza-
tlon OF costs. Very few of them want to
see wages controlled or stabilized. and
yet wage costs are as much an item in
the making of price as any other
factor
So If the people want price control.
they must, in all fairness. approve Of
wage and salary control. Strictly speak
ing, that's what ought to be done. Tn.
President ought to ask Congress for
authority to fix wages and salaries as
well as prices If there is to be a con-
trolled economy.
Return of Free Market.
II, on the other hand, the citizen
wants to see normal times come back
soon, he Will favor the return of a free
market in which supply and demand
flx the prices of goods that are not
scarce and in which sensible marketing
practices fix the prices of goods that
are scarce
There can be no sensible marketing
practices when a black market Is per-
mitted to flourish. The only reason
meat is scarce today is because the le-
gitimate producers cannot charge enough
to cover their costs. The moment the
OPA Dill was vetoed. there began a flow
OF livestock 10 market which was un-
paralleled The prices Jumped as in
evltably they had to in order to clean
out the black-market meat quickly.
The black-market operators unloaded
promptly With no price ceilings to
bother them, the Cattlemen of the coun-
try now will supply the meat needed by
the American people. If price ceilings
are restored, meats will be scarce again
High prices can be temporary phen-
omenon. What Congress ought to do
IS wait fortnight and see how quickly
prices will readjust themselves TO the
rev situation. The history of price
operations shows that when prices are
out Of line, production for the time
being is feverishly increased oniv to
fall again as the people stop buying
The risk OF being caught with a supply
that can't move prompts many a pro-
ducer TO hold his prices within bounds.
The psychology of the country at
present, unfortunately, is that of con-
troLleo economy. One suspects that
many people never expected price con-
trolls to end nor did they think of the
consequences of letting wage costs sky
rocket while ceilings were placed on
sales prices. Yet production has been
stunted in recent months because of
this very factor.
Few Days Of Confusion.
Sooner or later there had to be
brief period of readjustment while price
controls were thrown off and the pro-
ducers and distributors were compelled
to flnd a natural market. A few davs
OF confusion were inevitable, but II Is
better TO have that readjustment now
than to postpone 1t indefinitely and en-
courage black markets and retard pro-
ductlon in the meantime.
The Congress ought, of course to pass
rent control bill at once, but the
administration supporters are blocking
such action. Only few DAYS ago the
Democratic leadership was 7rguing for
a Soilpl UIll+Se UlI4 WHICH llCIUQeQ rent
control. Now 1t Is opposed to rent con-
troll unless other controls are put In
the same legislation.
The more time and opportunity the
businessmen of the country are given
to readjust their prices on fair basis
to absorb Government encourage rises
in costs, the more quickly will a period
Of stabilization pc reached without the
CPA.
In order to control rents and certain
other products related to housing short
ages, however, there will be some form
of OPA restored but it will be much
less than President Truman could have
had if he had signed the bill Congress
transmitted to him last week. OPA will
owe its curtailment largely to Mr.. Tru-
mans mistake but in the long run the
country will benefit by this present
period Of enforced readjustment to de-
control of p.ices by the Government.
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