Evening star., 1947-12-18
Controls or Rationing
Won't Reduce Prices,
Both Parties Agree
U. S. Buying Of Food Has
Beorine on Costs, Hence
Probe Of Spectators
Bv David Laurence

Neither the Democrats nor the
Republicans will vote for price con-
troll or rationing.
Only a handful of votes In either
party favors such a drastic course.
Considering the speeches of the last
few months and the denunciations
of high prices, 1t is significant that
majority sentiment in Congress does
not see solution to high prices
through rationing or price fixing.
The main reason for this is that
price fixing does not increase pro-
duction. When prices are fixed, the
legitimate producers run into diff
culties making ends meet and nat
urally take no risks Of expansion.
Hence the products become more
and more scarce and find their way
by resale into black markets.
Laws Can't End Black Market.
Legislation has not succeeded thus
far in eliminating black markets
anywhere in the world. The only
answer is to furnish incentives to
more and more production.
There are certain scarce articles
however, of which no more produc-
ton can be achieved no matter what
the stimulus happens to be. In these
instances the condition can be solved
only by the passage of time. In the
course of the months since VJ-day
many products that were short have
become abundant. The same wait,
painful though it be, will be neces-
sary to obtain abundance In other
products.
In the matter of food, however,
Government can do great deal to
restrain higher prices. Uncle Sam,
as the largest purchaser or dealer in
grain, can by the mere act of buying
in large quantities send the price
upward. This is one reason why
speculation is being denounced on
Capitol Hill. The demand for the
names of insiders" in the Govern
ment service who are alleged to have
been engaged in speculative trans
actions on the commodities mark
kets does not mean that any of these
persons has committed a crime un-
less he happened to be in possession
Of Government information relating
to the prospective purchases.
PauIey In Awkward Spot.
Thus. Edward Pauley, who is in
the Office of the Secretary of the
Army, got into an awkward position
by failing to release his holdings.
Unless it can be proved, however,
that he had inside information
about Army purchases of grain, the
only mark against him is that he
did not completely relinquish his
holdings while in the Government
service.
There may be others who traded
in commodities. If they knew what
the Department of Agriculture was
planning to do and made money out
Of 1t, they were guilty of a breach of
trust. Speculation of one kind or
another has always been rumored to
a small extent in Washington. Con-
sidering the impact of official acts on
the markets of the world, 1t is re-
markable that there have been so
few scandals.
One reason is that officials here
try to time their important an
nouncements so that they will be
made public Immediately after the
close of the markets. This tends to
prevent advantages that would ac-
crue to traders through the release
Of news unevenly during market
hours.
Denounced by Truman.
The main point, Of course, Is that
most of the officeholders today are
Democrats and President Truman
has denounced the spectators. If
the Republicans can succeed in ex-
posing a number of Democratic
officials as traders in grain, they
will reveal the indifference of the
President to spectators in his own
back yard.
1t remains to be seen whether any
of those whose names will be di-
vulged as traders were directly or
indirectly related to any of the Gov
ernmental agencies buying or selling
commodities. The Government can
send prices upward or downward by
the amounts these agencies buy or
sell each day There has been much
talk about Government officials as
spectators and, of course, the reg
ular traders on the market ex-
changes know every day who is
doing the trading.
These professional traders feel
keenly the criticism leveled at them
Hence they are not at all reluctant
to spread rumors about their COM
rades In speculation If only to prove
there is prestige in speculation.
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