Evening star., 1947-11-17

Despite generalities about high farm
prices, the income Of many farm
families cannot keep up with thu
rising costs of the things they buy
Small businessmen are bein,
squeezed by rising costs. Ever
those who are we'll off are asking
How long can it last? When is tn,
break coming?"
In addition, price imitation threat
ems our entire program of foreign
aid. We cannot abandon foreign
aid, nor can We abandon our owl
people to the ravages of unchecked
imitation.
We cannot allow the strength O.
this Nation to be wasted and oul
peoples confidence in our free insti'
tutions to be shaken by an economic
catastrophe. We shall be inviting
that catastrophe unless We take
steps now to halt runaway prices.
Asks Credit Controls.
Our immediate approach to thu
problem of high prices and imitation
should consist of three types of meas.
ures: One, to relieve monetary pres
sures; two, to channel scarce goods
into the most essential uses; three
to deal directly with specific high
prices.
One way to reduce monetary pres
sure is by restraining the excess
sive use of credit. At time when
the economy is already producing al
capacity, a further expansive OF
credit simply gives people more dol
lars to use in bidding up the prices
of goods.
Consumer credit is increasing al
disturbing rate. The amount out
standing has risen from six and
one-half billion dollars in 1945 to
more than eleven billion dollars to-
day. Even more rapid expansion
is under way now, because the con-
trolls on consumer credit exercised
by the Federal Reserve System ex-
pired November /. These credit con-
trolls should be restored. Also, some
restraint should be placed on inf1a-
tionary bank credit.
Wants Speculation Curbed.
Legislation is required, moreover
to prevent excessive speculation on
the commodity exchanges.
Another effective weapon against
imitation is increased savings by the
public. Every dollar that is saved
instead of spent is a dollar fighting
against imitation. In order to en-
courage additional savings, the Gov
ernment should intensity its Wig
orous efforts to sell savings bonds
The second part of the program te
curb imitation is to secure the most
efficient use of scarce goods and
otherwise channel their flow so as
to relieve inflationary pressures
Grain, for example, is too badly
needed to permit wasteful feeding
to livestock. Steel, as another ex-
ample, is too scarce to be used fol-
nonessential purposes.
Legislation is required to authorize
the ALLEGATION of scarce commodities
which basically affect the cost OF
living, or basically affect industrial
production. In these limited areas
inventory control powers are also
needed.
Authority to allocate transporta-
ton services should be extended.
Urges Stronger Export Controls.
In addition, existing export con-
trolls should be continued and
strengthened. Goods that we can
not wisely export must be kept here
and the shipments we make must
go where they are needed most
Profteering in exports must be pre-
vented.
The measures which I have al
ready discussed will, when taken
together, aid substantially in re.
lieving inf1ationary pressures. Fol
large segments of the economy they
should be adequate to meet the re-
quirements of the present situation
However, there are limited areas o1
acute danger in which these meas
ures cannot be regarded as guar
anteeing adequate protection.
For example, present forecasts
indicate that we are likely to have
less grain and meat next year than
we have had this year. The pres
sure on the prices of these foods
would then become increasingly
great. If these pressures are per-
mitted to bring further sharp In
creases in food prices they may well
set off a chain reaction that woulo
spread throughout the economy. 1t
is surely better to take timely &C
ton to check adverse forces at par
ticular trouble spots than to wait
until general imitation has become
so serious as to require drastic con-
trolls over our whole economic life
Calls for Price Measures.
Therefore, we need a third group
of measures to combat imitation
Legislation should be enacted, au-
thorizing the Government to i'm
pose price ceilings on vital COM
modities in short supply that basic
ally affect the cost of living. Basic
elements in the cost of living are
food. clothing, fuel and rent. In
addition, the legislation should be
broad enough to authorize price CELL
ings on those vital commodities In
short supply that basically affect
industrial production. This will en-
able US to stamp out prof1teering and
speculation in these important areas
This does not mean that price
ceilings should be imposed on all
items within the classes I have men
toned. For example, price ceilings
would not be necessary for staple
food and clothing items not in short
supply or for any delicacies or lux
uries. The same principle of selec-
tive treatment would apply to indus
trial items. This selective treatment
of a relatively few danger spots Is
very different from overall wartime
price controls.
Even should the shortages of a
few commodities at the consumer
level remain serious for time,
believe that the fair distribution OF
such commodities can be largely
accomplished without consumer ra-
tioning. But no one can foretell
exactly how serious some shortages
may become next year. With serious
-