Evening star., 1947-07-16
Structure
Bad|yBaIanced,
Henderson Says
Ex-OPA Chief Warns
Of Slump but Sees No
Major Depression
By the Associated Press


Leon Henderson said today he
sees little immediate danger of
a major depression" but that
prices may collapse disastrously
as they did after World War I.
while that collapse tof 1928-2I
cannot be compared with the grind
ing depression of 1929-33, it was no
picnic" Mr.. Henderson said in a
statement prepared for the Jaint
Congressional Committee on Sthe
Economic Report.
He presented his document as
chairman of the Executive Commit
tee of Americans for Democratic
Action, an organization of self
styled liberals committed to the
principles Of liberty and justice and
the democratic process"
To-day, just as in 1920, prices
have been permitted to get out of
hand" Mr.. Henderson declared.
"Onee again the price structure is
shot through with distortions and
imbalances."
Mr.. Henderson, now chief econ
omist of the Research Institute of
America, private business survey
enterprise, made no mention in his
statement of yesterdays testimony
to the committee by the National
Association of Manufacturers. But
the ADA views he set forth clashed
sharply with those enunciated by
NAM President Earl Bunting.
Controls Hastily Abandoned.
For example, Mr.. Henderson said:
THE fruits of our stabiliza ton
program were thrown to the winds
in. the hasty abandonment of war
time controls. *'* Had the basic
wartime controls been continued,
our economy today would be equally
solid and strong"
Mr.. Bunting, on the other hand.
recalled that NAM argued for elm
ination of price controls in order to
encourage production. MFR. Bunting
said this objective has been achieved
with only moderate" price increases
and that during the last four months
"the price level has definitely fiat
tened out"
MI. Bunting said also that if pro-
duction and productive efficiency can
be kept moving ahead, "we should
be able to hold a potential price rise
from getting out of hand"
Orderly Price Reduction.
Mr.. Henderson laid before the
committee the same program for
economic stability the ADA an
nounced two months ago. This calls,
among other things, for:
/. An orderly scaling down" of
prices< to eliminate about half the
overall increase since June, 1916.
2. Creation of price adjustment
board to work with industry to ac-
complish this on a voluntary basis
3. An orderly increase" Of wages
where this years 15-cents-an-hour
pattern is not in effect.
The ADA also called for immedi-
ate enactment of a truly effective"
rent control law. 1t said the ex-
tension bill recently passed by
Congress invited landlords to
bludgeon their tenants into agree
ing to Is per cent rent increasess
"As we see the situation" Mr..
Henderson said, "the heart of our
present danger lies in the imbalance
between our purchasing power and
our capacity to produce. The
incomes received by the great major
ity of our people have failed to
keep pace with the rise of prices"
Some Readjustment Unavoidable.
Mr.. Bunting said real wages
the actual buying power of the
workers money-have increased 20
per cent since 1889. Mr.. Henderson
said the buying power of consumers
declined "A per cent between the
April-June quarter of 1916 and
January March quarter of this year.
He said it dropped 1913 per cent
between early 1945 and the first
three months of this year.
The former OPA chief declared
there has been an unprecedented
rise" of business profits and that the
end of price controls "ushered in a
period of staggering profits" The
See ECONOMIC. Page A-41