Evening star., 1946-06-29

IVA oiiCoC lHIlitS Hd'c pIdycu d Nltdl
role in bringing about innumerable
wage settlements. The Taft amend
ment, however, provides that, in
determining costs for the purposes
of this section, all costs shall be in
cluded." The ONCE of Price Ad-
ministration advises me that under
this provision it would be required
to recognize all wage increases, as
basis for price increases, even If
the board had not approved them
and regardless of their amount.
This is the beginning of an in
evitable spiral of uncontrolled in
hation-a race between rising wages
and rising prices. Far-sighted lead
ers of both labor and management
know that nothing can be gained
and everything lost-by simply TT
ting prices and wages chase each
other.
Yesterday I received a letter from
the National Wage Sterilization
Board, which board represents in
dustry, labor and the public. The
board advises that it believes that
uncontrolled imitation will result
from this bill. Furthermore, the
board states, "It is our unanimous
Judgment that the proposed legisla-
ton presents no possibility of wage
stabilization or Of the achievement
of the balance between wages and
prices which is essential to economic
stability"
Sure Formula for Imitation
Provided by OPA Measure.
This bill provides sure formula
for imitation:
l. A first round Of sharp ano
widespread price increases;
3 Production slowdoWns due te
price uncertainties;
3. Renewed demands for furthe,
wage increases due to higher living
costs;
4. Higher production costs due tc
production slowdowns and stoppages
and to higher labor costs;
/ S. A cost-plus pricing amendment
which required higher production
costs to be translated Immediately
into higher prices.
And all this at time when the
supply of goods Is still far below the
record demand.
The formula would lead to dis
aster, even If 1t could be assumed
that price control could be admin
istered In an orderly fashion, and
that the Once Of Price Administra-
tion would be able to build up a
staff adequate to its new burdens
The fact is, however. that these as
sumptions are unreal The OPA
could not discharge the response
bilities which the Taft amendment
and the other price-raising amend
ments would thrust upon it-either
with its present staff or with any
staff that it might conceivably re-
cruit.
/ Moreover, enforcement and COM
pliance with price regulations are
dependent on the general stability
Of prices over considerable period.
Of time. Once prices were set ir
continuous upward motion com.
pliance would deteriorate rapidly
Little hope could be held out fol
compliance with ceiling prices fixee
under the Taft amendment.
i The reason for this is that tn.
ceiling price of each individual man
ufacturer would depend upon tn,
price which that particular manu-
facturer charged in the base pc
riod-usually October lis, 1941. II
this base period price each manu-
facturer would be entitled to add 8
uniform increase factor represent.
ing cost increases incurred by the
industry generally since that time.
Under this system, obviously, every
manufacturer who had a different
price in the base period would have
a different ceiling price now. Uni
form ceiling prices would become
impossible, except in those industries
which charged uniform prices In the
base period. Thus, most Of OPA's
dollars-and-cents regulations, which
are the most readily enforceable
kind, would be wiped out.
Proof of any ceiling price viola
ton would require proof Of the price
which the particular manufactur-
er charged during a two-week period
five years ago. Every enforcement
proceeding would thus become a
Understanding and often futile
historical investigation.
In these circumstances, the for.
NAL structure Of price and rent con.
; troll which the bill retains woulc
be wholly Intellectual to stem thu
tide Of imitation which it would SCI
;; in motion. Unable to cope with the
deluge Of industry demands fol
higher ceilings under the new pric'
ing formulas, and increasingl.
aware Of THE futility of its task
OPA's administrative staff woule
disintegrate. After irreplacabl,
losses from its ranks had reached
certain point the consequence
would not be more administrative,
delay. 1t would be complete col
: lapse.
In the face of these alarming con
sequences to the country if the pres
ent bill! should become law, I urg
the Congress with all the earnest
ness at my command to reconside
the whole problem Of stabilization
In that reconsideration, let us Sc,
I. just where we stand today. Undel
the existing stabilization laws pro
!, duction has recovered remarkabl.
from the shock of wars end. Out
put of civilian goods already sur.
passes the 1941 level and employ.
ment exceeds that level by 6,000, 900
This record has been achieved ir
spite of shortages Of critical mate.
rials and parts and in spite of ex.
tended work stoppages in basic in.
dustries The major labor manage.
ment disputes are settled, and W.
are moving rapidly toward ths
realization Of postwar objectives o.
fun production and full employment
in a sound economy.
Shortages Can Be Ended
If Stability Is Assured.
There still are shortages, but they
will be progressively wiped out In tn,
months ahead if business and labol
stick to their job of producing tn,
most possible goods in the shortes
possible time. This can happen only
; if business has assurance of reason.
: able STABILITY in its costs and If Ia