Evening star., 1946-02-22
Administration Issues.
Wider Interpretation
OF Wage Price Policy
By JONES Y. Newton

New labor troubles loomed for
the administration today as
Federal officials released addi-
tional interpretations of the new
wage-price policy, which SO far
has failed to produce the strike
settling results anticipated.
The shadow of John. L. Lewis
definitely was cast over the Capital
as oficials connected with labor
tried hard to settle strikes of Gen.
eral Motors Corp, the electrical ap-
pliance industry and other old dis
putes which have been hampering
production. Mr.. Lewis called a
meeting Of the United Mine Work
ers' 250-member Policy Committee.
and there was every indication the
move was designed to press new
wage demands on the coal industry.
President Truman discussed with
union chiefs the issues behind the
threatened strike of 100000 men,
bers of the Brotherhoods of Rail-
road Trainmen and Locomotive En-
gineers. Presidents A. F. Whitney of
the Trainmen and Alvanley john
ston Of the Engineers called at the
White House to describe the situa-
ton to the President.
Two Refuse Arbitration.
The two major brotherhoods are
the only ones of score of rail op-
Grating and incorporating unions
that have refused 20 arbitrate their
demand for a Is per cent wage in
crease. They have insisted also on
immediate consideration of a large
number of operating rule changes
after wage differences are resolved.
Other rail unions agreed to arbitra-
tion on wages and to a one-year
moratorium on the rule changes.
AS the two left the White House,
Mr.. Johnston told newsmen that
I'VE are ready to settle if the rail-
roads are" but he made it clear that
current balloting was predominantly
in favor of walkout.
Meanwhile, the Senate was con-
flrming Paul A. Porter as new OPA
administrator In record time. He
succeeds Chester Bowles, who moves
up to become stabilization director.
The Banking Committee took 20
minutes to recommend confirmation
of Mr.. Porter and the Senate re-
quired only six minutes to put him
in the job.
Shortly afterward, the OPA issued
a statement clarifying new policy in
which it said that the prospect of
greater production and reduced
costs will be taken into full account
in granting price increases to offset
wage boosts.
The agency said there is no re-
quirement that the full amount of
an approved wage increase, or any
part of it, must necessarily or auto
matically be reflected in ceiling price
increases
The extent of price hikes for any
particular industry will depend not
only on the wage increase, but on
such additional factors as declining
costs and increasing profits as vol
ume grows, better labor and return
OF normal operating conditions.
IF price increases reflected exist
ing abnormalities, they would be
much higher than needed for
sound and rapid transition, and
their cumulative effect could well
destroy stabilization," the state
ment said.
Policy Cited.
The new wage-price policy re-
quires OPA to grant price increases,
in the case of approved pay boosts,
sufficient to assure a rate of profit
over the next IL months that will
approximate an industry's profit
rate in 1869.
As an example of different results
In different cases, OPA assumed ap-
proval of Is per cent wage increases
in three industries, all operating at
near-normal volume.
1t said that while in all of these
industries wage costs might amount
to one-third of their prices, never
theless, the prices of their products
would not be advanced per cent
automatically"
In Industry A, OPA explained,
ceilings may not be raised at all
because, even after paying higher
wage rates, it will still earn profits
as high or higher than it earned
during the 1868 base period.
In Industry B, prices might be
advanced 2 or per cent because
it's earnings position might be such
to enable it to absorb only part of
the wage increase.
In industry (Which OPA pre-
dicted would be the least typical OF
the cases-it might be necessary to
advance ceilings by the full S per
cent, because without the wage
increase the industry would not
earn profits during the next IL
months comparable to those of
1868.
Five Points Stressed.
OPA advised industries making
wage increases that five "impor-
tant points" should be kept in mind
in applying for price adjustments.
l. The wage increase first must
be approved by the National Wage
Sterilization Board, except where
the board has waived approval.
2. OPA will make no advance COM
nitments about price increases
which are contingent upon pros
---PLAZA 81