Evening star. [volume] (Washington, D.C.) 1854-1972, 1946-06-19
BeIoted Drive Beqins
To Spur Production
Attempt to Achieve Balanced
Economy Won't Succeed
By David Laurence

| Economy won succeed
By David Laurence
A belated drive to increase produce
ton has been begun by the Truman
administration.
The drive will not succeed in it's desired
objective-to achieve a balanced econ
omy-though 1t may, Of course, to some
degree augment the Nations output
of scarce goods.
For the truth is the Nation Is headed
toward the most severe economic de-
! preston in its history and the respon-
sibility for 1t will fall squarely on Presi-
dent Truman, whose mistakes since
Vi day will cost the American people
not only considerable unemployment
but the hardships of imitation that could
have been readily avoided The con-
troVersy over keeping the OPA is just
a propaganda smokescreen to hide the
| coming debate over who and what was
responsible for the inevitable breakdown.
The President has added several bill
lions of dollars to the cost of production
recently by his increases in coal and
in railroad wages. An increase in
freight rates is coming if only to COM
| pensate the railroads for their increased
costs in coal
Steady OPA Increases.
Worst of all, however, Is the steady
increase by OPA itself in prices which
are the result of increased wage costs.
If the President had maintained wage
control, the administration could have
allowed wages to 60 up only as prices
could be managed at the same time.
The pinch will come and unemploy-
ment will become widespread as soon
as large part of the public finds itself
unable to pay the high prices that must
be charged If the new labor costs are
to be absorbed. A so-called buyers
strike will usher in the new depression.
1t will come after some of the present
| shortages have been overcome and much
OF the pent-up demand Is satisfied
Economists differ as to when this will
happen but the uncertain period may
begin sometime during the latter part
| of 1e47.
| The causes of the problem are simple
| Wage increases have been or are being
granted to organized unions involving
about 100000 persons. There are any,
| where from 100000 to 100000 per-
| sons unorganized who work in white
| collar jobs, agriculture. etc. These
people with fixed incomes cannot afford
to pay the new prices for goods. 1t
really means they cannot pay the wage
! increases. Theoretically. the answer
might be thought to be merely to in
crease production and bring prices
down, which is an impossibility in many
! lines Of business that have been saddled
with the increases. There is no way,
| for instance, to increase the consump-
| ton of coal when oil and gas and other
fuels are already competing. There is
| no way to increase to wartime levels
the number of persons travelling on
railroads when the airplane and bus
and the auto are competing already
for passenger business. And yet war
time wages are being paid
The answer does not lie alone in sub
| sidy by the Government, which would
from wages and salaries.
The answer does not lie in increased
production, because there is a limit to
the demand for goods due to wartime
shortages and the question of what to
do with surpluses will come up in
year or so and cause factories to shut
down and unemployment to begin.
The answer does not lie In arguing
about the OPA Unless the President
is willing at once to restore wage and
salary sterilization and sign legislation
curtailing strikes. the OPA might as
well be abolished and a free market
instituted. The sooner the public comes
| into contact with natural markets and
/ the buyers strike ensues, the sooner
the reorganization of the American
economy will be attained,
Truman Had His Chance.
Mr. Truman had his chance when
| VI day came to do what England did
to retain all wA controls and sta
Billie the situation. But he yielded to
| pressure and started playing politics
with the wage problem. He let wages
| go uncontrolled and tried to hold down
! prices and, of course. failed. Now the
! inevitable collision between buyers and
sellers is threatened.
! The only way out of the dilemma is for
rigid controls on both wages and prices
! and on work stoppages to be instituted
| at once-which President Truman lacks
| the courage to do. If he put on wage
and salary control and ordered a regu-
lation again like the Little Steel" for
mula, white-collar workers could get
| increases in wages while organized
workers were limited to increases al
ready obtained under the formula. Then
with purchasing power generally in
creased business and industry could
set for itself a program of quantity pro-
| duction that might conceivably reduce
prices somewhat or at least arrest their
| upward rise. Likewise, plans could be
laid for the sale of exportabe sur
! pluseS.
Mr.. Truman has the complete respon-
slbility for what has happened because
he has broken the price ceilings due to
| his political concessions to unions and
he has ignored the forgotten man" of
! the age-the white-collar worker and
the farmer. They must pay the new
prices caused by the acceptance of union
wage demands ordered as a Nation
wide policy by the Truman admins
| in, tic +,