Evening star., 1946-11-10
President Truman's statement

against imitation. am convinced
that the time has come when these
controls can serve no useful pur-
pose. I am, indeed, convinced that
their further continuance would do
the Nations economy more harm
than good. Accordingly, I have di-
rected the immediate abandonment
iof all control over wages and sal
aries and all control over prices
except that necessary to implement
the rationing and ALLEGATION pro-
grams of sugar and rice. Rent con-
troll, however, must and will be con-
| tinued.
On October IA reported to the
people on the subject OF the meat
shortage and our general stabiliza-
ton program. In addition to free
ing meat from control I directed
that the lifting of other controls
be accelerated. AS result, controls
have been removed from practically
all foods and a long list of other
commodities.
The price administrator has ad-
vised me that, with SO much OF the
economy freed from price controls,
clinging to the rest would, In his
judgment, lead to distortions in
production and diversion of goods
| to an extent far outweighing any
benefit that could be achieved.
Holds Law UnwOrkable.
There is no virtue in control for
II hnrnn1PC
apparent that controls are not fur-
thering the purposes of the stabili-
zation laws, but would, on the con-
trary, tend to defeat these purposes,
it becomes the duty OF the Govern
ment to drop the controls.
The major problem with which
we have had to contend is the with
holding of goods from the market.
AS price controls are dropped, one
by one, many sellers naturally hold
on to their goods in the hope that
their turn will come next and that
they can obtain higher price. In
addition to those who are holding
on to goods merely in expectation
of decontrol, there are others whose
motive is deliberately to force de-
control by depriving consumers OF
essential goods or manufacturers OF
essential materials. This withhold
ing is becoming so serious as to
threaten key segments OF the econ
omy with paralysis.
The real basis of our difficulty Is
the unavoidable price control law
which the Congress gave us to ad-
minister. The plain truth is that,
under this inadequate law, price con-
troll has lost the popular support
needed to make 1t work. At best, the
administration of price control Is an
extraordinarily difficult and complex
business and it can work successfully
only if the people generally give it
their support.
Many Shortages Relieved.
We have now reached the point
where many of our shortages have
disappeared and in many other
areas supply is rapidly approaching
demand. In the Is months since
WI day the sterilization program
has preserved a large measure OF
general economic stability during a
period in which explosive forces
would otherwise have produced eco
nomic disaster. In fact, the situa-
ton is far more favorable for the
return to a free economy today than
it was when the present badly weak
ened sterilization law was finally
enacted by the Congress.
Nevertheless, some shortages re-
main and some prices will advance
sharply when controls are removed
We have, however, already seen what
consumer resistance can do to exces-
sive prices. The consumers OF
America know that if they refuse to
pay exorbitant prices. prices will
come down. Wholesalers and re-
tailers alike are aware of the danger
of accumulating inventories at prices
so high that they cannot be conf
dent of reselling at a profit. Manu-
facturers, thinking of their future
markets, will hesitate to raise prices
unreasonably. In short, the law OF
supply and demand operating in the
market place will, from now on.
serve the people better than would
continued regulation of prices by
the Government.
| Not Applicable to Rents.
The reasons which impel the lift
ing of price controls are not ap-
plicable to rents. Housing is des-
perately short and will continue to
be short for a long time to come.
Tenants afe in no position to resist
extortionate demands. The fixing OF
rents by the ordinary processes Of
bargaining would bring hardship
and suffering to our people. 1t may
be that some adjustment OF rents
will be required, but control of rents
and control over evictions must be
continued.
wish that it were possible to keep
effective price controls on building
materials in furtherance of the Vet
erans' Emergency Housing program,
under which we have seen an un-
orecedented acceleration both of
homebuilding and Of the production
of building materials. But price con-
troll on building materials alone,
with no price control on products
competing for the same raw mate
r1als, would drive these materials
away from housing and defeat the
objectives of the program. The re-
moval of price ceilings on building
materials will obviously necessitate
change in the approach to some
of the problems in the housing pro-
gram. I am asking the housing ex-
pediter to report to me promptly in
This regard. We must continue an
aggressive program of building
homes and apartments for veterans.
No Basis for Wage Controls.
The removal of price controls
leaves no basis or necessity for the
continuation of wage controls, which
have operated, in most industries,
only as an adjunct to price controls.
Accordingly, I have issued an Ex-
ecutive Order terminating all wage
and salary controls under the Sta
bilization Act of 1912. This does
not affect, of course, the statutory
provision governing changes in
| terms and conditions of employ
ment in plants operated by the