Evening star., 1946-04-19
OPA Amendments

VI ~ HIiISI1OI1e0CS
The amendments which have been
tackled onto the price-control bill
by the House, and the extreme pro-
tests which these amendments have
evoked from OPA supporters in and
out OF Congress, are indicative of
the width of the gulf which sepa-
rates the basic stabilization philoso-
phies of the administration and the
House.
The administration philosophy, to
the extent that it is represented by
OPA, is primarily concerned with an
attempt to deal with a symptom of
imitation rather than imitation itself.
OPA has been fighting rearguard
delaying action, trying to hold some
kind OF a lid on price rises, which
are a symptom of imitation, until
production reaches a volume which
OF itself will restrain or depress
prices. To this end it has used a
variety Of devices. One of them has
been the subsidy program-infla-
tionary in itself but, in OPA opinion,
the lesser of two evils. Another has
been its cost absorption program,
under which manufacturers have
been expected to produce some items
at loss provided that, as a result
OF profits on other items, they can
show an overall profit. One result
OF this has been that some manu.
facturers have stopped production
on loss items, many of which are
badly needed, and have shifted over
to more advantageous lines.
1t is only too obvious that these
and the other aspects of the OPA
program have not been too success
full. The constant and increasing
pressure on the price ceilings is
nothing but an indication of the
inflationary ferment thatis seething
below the Ida ferment that has
been fed by such things as the
administrations wage policies, sub
sides, deficit financing, and the in
crease in money supply and bank
credit. Despite official assurances
that we are over the hump in recon-
version, there remains an acute
shortage of goods in the legitimate
markets, and, while official prices re-
main relatively stable, the black mar
.ket is taking more and more of the
family income. In all the circum-
stances, there is room for doubt
whether OPA, even without amend
ments, could prevent the lid from
blowing off during the coming year.
This line of thinking, stimulated
by thousands of complaints against
OPA from constituents, has influ-
enced the House to adopt different
approach. With other things, it
would fix definite date for the
dlscontinuance of subsidies, guaran-
tee reasonable profit at all stages
OF production and distribution. and
impose a mandatory "decontrol"
program when supply reaches a
certain level.
Underlying this is the belief held
by majority of the members of
the House that OPA has had a
positive retarding effect on recon-
version, and that, with the changes
proposed, the desired level of pro-
ductlon will be achieved sooner than
would otherwise be the case.
This is disputed in the strongest
terms by the supporters of OPA, and
the head of that agency, Paul Porter
says that the bill as amended would
be administratively unavoidable.
Basically, the issue is one of opin-
ion, and not many are qualified to
pass judgment on the matter. If
the House bill should become law
there would certainly be very sub
stantial and at least temporary
rise in living costs. Whether this,
in the long run, would be offset by
a new flow of goods into the legiti-
mate markets, accompanied by de-
clining prices as volume increases,
is very difficult to say. Undoubtedly,
the opinions of men like Mr.. Porter
and Mr.. Bowles, who have lived with
this problem, are entitled to the
most serious consideration, and it
is to be expected that the Senate,
when it gets the bill, will weigh the
pros and cons with greatest care,
for the final decision, whatever it
may be, will have a most profound
effect on the future welfare of this
country.