The union times., 1946-10-19
Can Only Lead
 To Higher Prices
 And Suffering
Examples Of Milk And Cotton Cited To Show
 DeControl Effects

If price controls are thrown away, will shortages disappear too? It hasn't worked out that way, as proven by what has hap pened to milk and cotton.
 Milk is scarcer today, after three months of freedom from price controls, than it ever was under OPA. The shortage is expected to continue until late in 1947. The reason is simple. Production fell off this Summer. In some cities it was 7 per cent less than last year and in the rest of the country it was from 2 to 3 per cent less.
 Bid Against Each Other
 Price controls cannot be blamed for this situation. On the contrary, it is the complete absence of price controls which cOmpeIs neighbOr- ing communities to bid against each other for the shrinking supply of milk.
 As in any other auction, every bid der jacks up the price for all the other bidders. Consequently not only New York, but many cities are pay ing more for whatever milk they now get than they would have had to pay under OPA controls.
 By letting prices go where they please, the cost of milk in a number of communities has been increased 5 cents quart-30 per cent-during the past four months. Despite all the theories about higher prices stimu- lating greater production, the supply of milk is considerably smaller than it was when milk was cheaper.
 The benefits of price decontrol are in the exclusive possession of the milk industry. The consumer gets nothing but the burden of paying higher prices when he can find the milk.
 Disappointing
 The experience with cotton is just as disappointing. Raw cotton prices have shot up to fantastic levels, from g cents a pound in 1883 to 2 cents last year and 3911 cents at the present time. The rise has been SO rapid dur ing recent months that OPA has granted five price increases in cotton manufactures since Aug 1 m an effort to keep pace with the cost of raw cotton.
 As a result, the prices of cotton fabrics are g per cent higher and of cotton clothing Is per cent higher than they were at the end of July. If freely moving and rapid ly climbing prices are the keys to greater production then the supply of cotton should be much greater than it has been for years.
 We'll, 1t isn't. This years produc- ton of raw cotton IS way down, the smallest crop since 1921 and the sec ond smallest since 1891. It is per cent less than last year and about 30 per cent below the average for the previous ten years.
 One-Sided
 The advantages of high cotton prices are just as One-sided as in the case of milk. There has been neither flood of cotton goods nor a drop in prices. Cotton dresses and other goods are scarce and are ex- pected to continue so until next Summer. None but the cotton spec uIatOrs and the manufacturers benefit. For the consumer there still are shOrtages-and higher prices too.
 What has been forgotten in the current confusion is that most of to- days shortages, are physical, not psy- chological The basic industries are going full blast, but their tonnageS of steel, copper and other materials are not enough to go around. The auto industry for example, is shutting down for lack of sheet steel. Ending price control on either steel or cars won't improve the situation one bit What the auto makers need is more steel not theoretically more attractive profit margins.
 No Cure-AlI
 There is no cure-all for shortages. It is a problem of more production and better balanced distribution. A different combination of remedies is required for each industry. The more critical the shortage, the greater the need for some governmental control until the gap between supply and de- mand has been narrowed.
 Generally speaking, with prices already very high, the end of OPA can only bring more imitation rather than more prOductiOn-just as it has in the cases of cotton and milk.