Evening star., 1948-04-10

~ AVIlIVS VCSPnC
Initiation Warnings
New imitation warnings from
the White House encountered
again today the usual opposition
to controls from the Republican
Congress.
President Truman's Council Of
Economic Advisers raised the alarm
in quarterly review which served
notice that there Is strong reason"
why price increases may be looked
for in such items as rents and
meat,
In guns or butter" report. the
Council analyzed the impact on the
Nations economy of $4,000, ,O00, 900
foreign aid spending, the 27-day-
old coal strike and a proposed $3,.
600, ,000,0 900 outlay for defense, then
urged:
l. Administration power to say
how scarce products will be distrib-
uted, plus indirect manpower con.
troll of steer workers into vital in.
dustries.
New Taxes Proposed.
spending for military preparedness.
3. Enactment of standby" price,
wage and ration authority, unsuc-
cessfully urged by Mr.. Truman since
last fall, as well as power to control
bank and consumer credit.
The reaction of Chairman VOL
colt of the House Banking Com
mittee, where most Of such legis-
lation would originate, was cold.
1T seems unnecessary" he told
to restore any controls
until we see the impact on our
economy of the military spending
and foreign aid"
At the Commerce Department,
John c. Virden, in charge Of
the voluntary industry agreements
which ration steel and other scarce
materials to essential users, offered
this statement:
IT am confident that the Job Of
meeting the needs Of the European
Recovery Program can be accom-.
plished by voluntary methods.
barring, of course, protracted work
stoppages in basic industries or h
large military procurement pro-
gram.
Il believe that American industry
will respond favors f'y to the chal.
lenge." '
Hoffman Of Same Opinion. ,.
This agreed with the opinion
voiced yesterday by Paul G. Hoff.
man, economic cooperation admin.
istrator. that voluntary methods are
preferable to Federal controls. Some
fringe" controls might prove neces.
Sary later, Mr. Hoffman said.
The Council of Economies Ad-.
visers. headed by DR.. Edwin G.
Nourse. called for systematic and
vigorous discipline" to meet the
pressures on the economy. L
Restoring coal production, the
council said, is "our foremost DOM
estic problem, since indefinite con-
tinuation Of the coal strike would
bring industrial paralysis" =,
Increasing national defense OUT
lays to as much as $4,000, 900 900
will not swamp our economy nor.
require us to pass from free enter,
prise to regimentation," the report
stated. But world uncertainties may
require further military spending,
1t added.
This need not wipe out Americas
hope. said the Council. that larger
numbers of people would achieve
higher standards of living than had
been realized before" But 1t said
such hopes must be postponed or
revised downward and added:
1T Is our particular application
of the old alternative OF guns or
butter"
The Government economists noted
that the new demands hit most
heavily at industries where scarcities
already are most severe and per-
sistent. And they urged setting up
"a system Of ALLEGATIONS, priorities
and export and domestic use limita-
tions."
The Council said the United
States Employment Service should
be strengthened so as to steer idle
workers into plants where they will
be most useful. But all manpower
controls should be indirect, the re-
port said, and
I'VE should make sure that the
Selective Service Act and regula-
tions are so drafted and admins.
tered as to give suitable deferment
to individuals and groups especially
needed in the defense program"
Foreign aid and defense orders
should be placed In areas OF COM
parative labor plenty and efforts
should be made to prevent labor
piracy" or the raiding Of one in
dustry by another for workers, the
advisers said.
Hopes that the February break in
commodity markets meant a top.
ping off" of the inflationary climb
have been dimmed by the new de-
velopments, the council said. -
It added that while this has ina
duced a desirable degree of caution
in the business world there Is
certainly no assurance that the con.
sumer price index will 60 down, and
for such important items as meat
and rent, there is strong reason why
it may go up. :.
Slapping at the "imprudent re-
duction in taxes" the report said
this increases the need and by no
means ends the opportunity for
helpful fiscal policies" It added: .
New taxes should be demanded
in proportion to Cor even in antici-
patton of all subsequent increases
of defense expenditures which are
not clearly Offset by practicable re-
ductions in other directions" =;
The report was made public last
night after it had been discussed at
a cabinet session earlier.
M,;no 0nnoe;3;on