Evening star., 1947-12-13
ReportApproves
Repub|icanP|a
.ToCurb Initiation
House Group Leaves
Way Open for Controls,
But Hits Truman Idea
BY the Associated Press

The House Banking Commit
tee said today it has not slammed
the door on President Truman's
anti-inf1ation program, but con-
tended some of his proposals
might lead to "dStortions" and
diversion"
The committee said the President
himself feared a year ago that Sc
lective price controls might lead to
these things.
The group filed with the House
formal report approving Repub-
lican substitute for Mr.. Truman'S
plan, centering around permission
for business to make agreements to
cut prices without violating the
antitrust laws.
The Republican measure is slated
for House consideration Monday.
AS the report was filed, Repub-
lican Senators prepared to review
a cost-of- living statement submitted
by Senator Taft, Republican, of
Ohio. Senators who saw the pre-
liminary draft said that it, too, left
a loophole through which the COP
could fall back on some form of
compulsory action If its proposed
voluntary methods fail to halt rising
prices.
Fails to Attack Truman Request.
These Senators said the advance
statement was significantly lacking
in any attack on Mr.. Truman's re-
quest for standby ge-price and
rationing authority. Senator Taft's
statement proposes to set out Re-
publican aims.
In its report to the House, the
Banking Committee said it 'has en-
deavored to comply with that part
of the Presidents program which 1t
believes can safely be put into effect
Immediately"
"The committee expects" it said,
Ito continue to study the whole pro-
gram and to explore its potential
consequences in the next regular
session of the Congress"
The committee said no admins
tration witnesses have been able to
tell how the standby controls asked
by Mr.. Truman would operate until
voluntary efforts had been tried, 50
1t became clear" that no action is
necessary on them at the special
session.
Truman Statement Quoted.
The report quoted President Tru.
man as saying November 9, 1916:
"1he price administrator has ad.
vised me that, with so much of the
economy freed from price controls
clinging to the rest would, in his
judgment, lead to distortions in pro-
duction and diversion of goods to ar
extent far outweighing any benefit
that could be achieved"
The report said:
THE fear of the committee has
been that the imposition of selectivt
price controls at this time might
bring about precisely those 'distor.
tons and that diversion which the
President feared year ago.
"On its face, an attempt at selec.
tive price control might diminish
the production of precisely the good.
that are in short supply and might
tend to divert production to les.
scarce and less essential goods thai
are not controlled"
The committee further quoted Mr.
Truman as saying on October IA
1916, that price control and wage
control are largely dependent or
each other"
Would Force Wage Control.
"It follows from this" the COM
mittee said, that selective price
control would have to be accom-
panied by selective wage control.
But if the price of steel, for ex-
ample, were held down while the
prices of other commodities were
permitted to rise, could the Gov
ernment hold down wages in the
steel industry while allowing wages
in other industries to go up? What
would be the response of the steel
labor unions to such a proposal?
Would there, in fact, be any wav
to impose selective price controls
that would not lead to a demand
for return to overall price and wage
controls in order to prevent the dis
tortions' and diversion that an at
tempt at selective price control
would bring about?"
The report attributed high prices
to two basic factors:
l. Prevailing money and credit
policies.
2. The unusually large foreign de-
mand for scarce American goods.
Consistent with this appraisal, the
committee said, its bill calls for
continuing export controls as re-
quested by the President. These
(see ECONOMIC, Page A-20