Evening star., 1946-07-26
Text of Message on OPA

| ext OF MeSSO
FOLLOWING is the tert OF Presi-
dent TrHman's message to Con-
eress last night, after he signed
nep price control legislation
I have today signed H. J. Res. 371
amending the price control laws and
extending them for another year.
I have signed this measure with
reluctance.
I had hoped for bill under which
the Government could with full
confidence assure the people that
prices would remain generally stable
in these last few critical months of
the transition to a free economy.
This bin fails far short of that
hope. I am advised, however, that
it is the best bill the Congress will
now pass. It Is clear, moreover,
that it is better bill than the one
was forced to veto on June 29
If that bill had become law, inf1a-
tion would have been inevitable
While the present measure by no
means guarantees that imitation can
be avoided, it offers a sufficient
prospect Of success to warrant the
making of a whole hearted effort
to keep our economy on an even
keel until food of goods makes
further controls unnecessary.
The behavior of prices and rents
| in the last four weeks has given
the country a frightening foretaste
of what would happen to the cost
of living without price and rent
control. Even though many fac
tors were operating to restrain prices
during this period, prices have
nevertheless risen steadily and
ominously.
The Bureau of Labor Statistics
index of % basic commodities in
the primary markets has shown an
increase of 248 per cent in the rs
days since June %, 1916, as against
an increase of only 1871 per cent in
the three years and A days be-
tween the signing of the hold-the-
line order on May II, 1943. and June
28 1916. OF this increase, only
about per cent can be attributed
to the removal of subsidies. These,
it must be remembered, are pre-
wholesale figures. The impact of
/ the increases has not yet been fully
! felt by consumers Retailers have
| for the most part held to their OPA
prices so long as their old inven-
tories lasted.
Vital to Our People.
These increases have occurred in
spite of the restraining influences at
work to keep prices down. I had re-
. quested that the price line be held
while the Congress considered the
enactment of workable law. Busi-
nessmen hesitated to build up in
ventories at high prices and thus
risk serious loss if prices were rolled
back to June 80 levels. This risk
was heightened by the prompt pass
age in the House of Representatives
of a resolution which would restore
the June 30 prices and rents. In ad-
ditlon, consumer resistance to in
creased prices developed immedi-
ateiy.
In view of the alarming rise in
prices which took place under these
conditions, it is not dificult to pre-
dict what would happen if a free
market were operating without re-
straint.
These facts demonstrate that the
continuance of effective price con-
troll is vital necessity to our people
There are millions of families for
whom a sharp rise in living costs
means immediate suffering. There
are others who can get along we'll
enough for while, but ultimately
imitation eXacts its toll from all
The present legislation makes the
more difficult than it has been in the
past. Clothing prices in particular
will be difficult to hold at reason
able levels, and there are some
other things that consumers will
have to go without, or pay higher
ceiling prices for them than they
should. 1t is particularly unfortu-
nate that many of these increases
result from concessions to special
interest preSsures, rather than from
the adoption of principles designed
to expand production within stable
price structure.
Compares Two Bills.
The present bill, despite its in
adequacies, is an improvement in
many respects over the bill which I
vetoed. In my veto message, I en-
phasized the disastrous consequences
which would flow from the Taft
amendment and its companion the
Wherry amendment. These provi-
slons are fundamentally changed in
the present bill A comparison of
the two bills demonstrates this fact.
Although its professed objective
was TO increase production, the Taft
amendment would have required
prices to be increased for already
profitable industries even where no
increase in production was possible.
While the present bill will require
some price increases where there
will be no substantial expansion in
production. it reduces materially
both the number and the size of
these increases.
1t was mandatory under the Taft
amendment to increase prices so
that all industries could earn the
profits they earned in the year 1941
on every major item they make.
This was year of abnormally high
profits. The base for measuring
profits under the present bill is the
year 1910. in which profits were
more nearly representative of nor
NAL peacetime opera tions. At the
same time, the use of 1910 margins
of profit offers every incentive for
full production because 1910 was a
highly profitable year
Another serious deficiency OF the
Taft amendment is corrected by the
present bill 1t is obvious that costs
go down as volume of production
goes up. Yet that amendment would
have compelled the price admins
traitor to base prices on current costs
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