The Wilmington morning star., 1946-06-30

contributed greatly to that devel-
opment. The representatives of
industry, labor, and the public
who compose it have wrought what
threatened for a time to become
a runaway wage movement into
a fair and orderly procedure with
which virtually ali unions and
arrangements have cooperated.
This nation still needs the con
tinuing services OF the wage stab.
ilization board.
I wonder, therefore, if the Con,
gress realized when it voted for
the Taft amendment that it wa
voting to destroy the present wage
Sterilization program and the use
fulness of the wage sterilization
board. Under the existing pro-
gram the board has the task t
determining the limit of wage in
creases which an employer can
use as the basis for price in
creases. Its determinations of
these limits have played a vital
role in bringing about innumer-
able wage settlements. The Taft
amendment, however, pro v d t s
that, lin determining costs for the
purposes of this section, all costs
shall be included" The Office oil
Price Administration advises me
that under this provision it would
be required to recognize all wage
increases, as a basis for price in.
%creases, eve if the board had mo-
approved them and regardless O
their amount.
This is the beginning of an
inevitable spiral of uncontrol-
led inflation-a race between
rising wages and rising prices.
Far-sighted leaders of both
Labor and Management know
that nothing can be gained
and everything lost-by simply
letting prices and wages chase
each other.
Yesterday, I received a letter
from the National Wage Stabilize
ton board. which board represents
industry, labor and the public. The
board advises that it believes tina
uncontrolled initiation will result
from this bill. Furthermore
board states, st is our unanimous
judgment that the proposed legisla'
ton presents no possibility of wage
sterilization or of the achievement
of the balance between wages and
prices which is essential tc
economic stabilit.
This bill provides a sure formula
for initiation:
l. A first round of sharp and
widespread price increases;
2. Production slowdowns due to
price uncertainties;
3. Renewed demands for further
wage increases due to higher liv-
ing costs;
4. Higher production costs due tc
production s%lowdowns and stop
pages and to higher labor costs;
5. A cost-plus pricing amendment
which requires higher productic1
costs to be translated Immediately
into higher prices.
And all this at a time when the
supply OF goods is still far below
the record demand.
Sees Disaster Ahead
The formula would lead to dis
aster even if it could be assum d
that price control could be ad.
ministered in an orderly fashion.
and that the Office of Price ad.
ministration would be able to builo
up a staff adequate TO its new bur.
dens. The fact is however, tina
these assumptions are unreal. The
OPA could not discharge the re-
sponsibilities which the Taft amend.
ment and the other ~price-raising
amendments would thrust upon il
either with its present staff OF
with any staff that it might con
ceivably recruit.
Moreover enforcement and com,
pliance with price regulations are
dependent on the general stability
Of prices over considerable PERIODS
OF time. Once prices were set ir
continuous upward motion com
pliance would deteriorate rapidly
Little hope could be held out for
compliance with ceiling rice.
fixed under the Taft amendment
The reason for this is that the
ceiling price of each individual
manufacturer would depend upor
the price which that particular
manufacturer charged in the has,
period-usually October LIS, 1941
To this base period price each
manufacturer would be entitled Il
add uniform increase rep
resenting cost increases incurred
e by the industry generally sine,
that time.
S Under this system, obviousl.
every manufacturer who had a diff
ferent price in the base periot
e would have a different ceiling
n price now. Uniform ceiling price
n would become impossible, excep
5 in those industries which charged
uniform prices in the base period
S Thus most of OPA's d%ollars-and
cents regulations, which are tn,
most readily enforceable kind
would be wiped out.
4 Proof Of any ceiling price viola
!. ton would require proof Of ths