Evening star., 1946-06-29
Effective Control of Rents
Would Be Lost by Bill.

his, however, Goes not mean INA
the country would get any real pro
lection, for long, in what it costs tt
eat The same thing is true Of rents
The bill does not direct any immedi.
ate increase in rents at all. But thi!
does not mean that rents would bt
effectively controlled.
II l thought that this bill woule
make possible some genuine protec.
ton against soaring food prices ane
rents, I should hesitate long before
disapproving it-despite the tota
impossibility of stabilizing the price.
Of other essential commodities. Oul
economy. however, cannot be half.
stabilized. We cannot quarantine
imitation. Higher prices for the
things that farmers and landlord:
buy would inevitably force up farm
prices and rents. In the case O.
farm prices, this Is required by the
parity provisions Of the law. In thu
case of both farm prices and rents
general increases would be forcee
upon us by simple justice and tn,
hard facts of business and eco
nomics.
This bill, therefore, gives only tn,
delusion of protection against risint
costs Of food and shelter. It woult
delay their rise little. But the de-
lay would be long enough only tt
cause unnecessary hardship fol
farmers and landlords-not lon,
enough to bring real benefits to con
sumers and tenants.
The spectacular increases in tn
prices of manufactured goods whicl
the Taft amendment and its com
panion amendments would cause
right at the beginning, are far in ex
cess Of anything which industr.
needs to earn generous profits ant
obtain full production. The increase
are SO large because the formula
for computing them are bonanz'
formulas.
The Taft amendment puts int,
prices the profit per unit of sale
which the industry received for tn
particular product in the year 194l
That was a year in which manufac
turers and professors received j.,
much greater profit out of each dol
lar of sales than in any one Of tn,
five peacetime years which preceded
l941 and more than in any one O
the following five wartime years
Indeed, 1941 profit margins wer,
half again as great as in the ban
ner year of 1929. Today, however
the volume of sales is greater thar
that Of 1941 and it is going to in
crease steadily if imitation does no
stop it. Thus, at the very time wher
We should be getting the benefit O
high volume in the form of lowe
prices, the Taft amendment woule
initiate prices.
Taft Amendment Makes
Prices Unreasonably High.
In the case Of products like auto
mobiles, washing machines and re
frigerators which are Just returnin,
to the market, the Taft amend
ment produces especially unreason
able prices. This is because tn
amendment adds to prices all the alb
normally high costs arising from
temporarily low volume and change
over conditions.
The Wherry amendment gives
final boost to prices by requiring
the pyramiding Of manufacturer
increases at the 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. Price
must not be inflexibly held. In
creases have been granted and NOR,
will have to be granted to remov,
impediments to production. Tn,
Taft amendment, however, in tn,
name Of stimulating production
promises peak profits on every prod
uct even where production is al
ready going at full blast and profit!
are eminently satisfactory. AS in
dustry after industry accepts tn,
invitations of the Taft amendmen
in an attempt to make good profit
better. prices will 60 up and up.
In addition the industries in rea
need Of relief will tend to be lost il
the shufile. The OPA, already crit
icized for delay in these deserving
cases, will be increasingly unable t
act promptly to break production
bottlenecks.
There is grim irony in the fac
that the Taft amendment is defend
ed as stimulant to production
when in fact 1t will greatly imped
production.
The evidence is readily at hant
For weeks we have seen meat an
other commodities withheld fror
the market in anticipation OF highe
prices. The simple fact is that th
average businessman or farme
who knows that his price will 500
be higher will not sell any MOI
goods this week than he has to-h
they suits or sewing machines g
cattle.
The manufacturer with a price ir
crease pending would naturally slo
down deliveries as much as h
working capital and his storage ia
cilities would permit. At the sam
time the knowledge that his SUP
pliers bed their own increases pend
ing would lead him to do all h
could to build up his inventorie
But his suppliers would also slo'
down deliveries for the very sam
reason. AS essential materials an
parts were withheld from the mar
ket, production lines would grad
ually grind to a halt. Worker
would pay their toll to this amend
ment in loss of employment. Con
sumers would pay theirs in lack q
goods.
Would Start Vicious Circle
OF Cost and Price Increase.
These cases would develop, not b
hundreds but by thousands. AS fas
as price increases were granted, the
would raise the costs OF purchasin
industries and form a basis for addi
tional increases. Each one woul
bring its new slow-downs and ne,
bottlenecks. 1t is plain to see VIII
the enactment of the Taft amend
ment as an aid to production woul
be sorry jest. Production require
a reasonable stability in costs,
continuing flow Of goods and read
iness to buy and sell. The Tai