Evening star., 1948-07-19
1hird-Round payRises
For 10 Million Brine
Initiation WARNINGS

IIllldllUn WdInlIlN
Further wage increases, the ques-
tion of economic controls, the pros
pect of a Federal budget deficit, and
the trend in bank and real estate
loans came in for high-placed COM
ment and caution today in the
Nations struggle against imitation
AT least 100000 labor union
members and other millions of nom
union workers have received third
round of postwar wage increases,
Government experts estimated
About 100000 of the record total
of 6l,300,0Oo employed belong to
unions
With prices still on the grade and
with the wage movement spreading
to other industries, Government and
private organization officials agreed
on the need for control programs
But they differed on what they
should be.
Chamber Offers 4-Point Plan.
Voluntary methods, not force OF
Aw, were advocated by the United
States Chamber of Commerce in a
four point plan to check imitation.
The chamber said: "Government in
tervention In the form of direct eco
nomic controls will binder, not help,
production so badly needed at this
time. To impose controls before the
need for them is evident, as in the
case of war, would be mistake.
Instead of consumer credit con-
trols and standby authority for ra-
tioning and price and wage controls.
as suggested by President Truman,
the chamber proposed:
Restraint on the part Of the
country's economic segments in ad-
vancement of wages and prices. Re-
duction of Federal, State and local
government expenditure. Develop
ment by the Government of mon
etary policy capable of controlling
imitation. Encouragement of inoivid-
ual savings and disbursement OF
an over expansion of credit"
ShyutI DChSk.
Indorsing a voluntary control pro-
gram sponsored by the American
Bankers Association to hold down
loans that add to imitation, Secre-
tary of the Treasury Snyder declared
in a letter given out today that such
efforts are doubly necessary in view
of a probably deficit in the Federal
budget for the fiscal year that began
July l. i
Increased defense and foreign aid
costs and loss of revenue because OF
the recent income tax cut prob
ably" will put the Government into
the red this year, he warned.
This, he cautioned, would prevent
the Government from contributing
to the nti-inf1ation fight by reduc-
ing the national debt.
In an exchange of letters dated
July 2 and T. with Joseph M. Dodge,
president of the bankers association,
Secretary Snyder said results OF the
lending-restraint program sponsored
by the association have been well
worth the effort He reported the
increase in bank loans during the
first five months of this year was
held to S1350,000 900.
On the problem of loans in an
infationary period, banks today had
q special warning from Chairman
Maple T Harl of the Federal De-
post Insurance Corp, concerning
real estate loans.
Real Estate Loans Doubled.
Noting that real estate loans OF
the 1880 FDIC-insured CONNER
oial banks doubled during the first
two postwar years. Mr.. Harl said:
About half of the 100000 900
of real estate loans outstanding at
insured commercial banks at the
end of 1947 have been made during
a period of high prices. Since real
estate loans are made for rela-
lively long priods of time a decline
In prices and business activity may
affect the quality of such loans.
The risk of future losses to the
banks, however, is leSSened by the
existence of Government guarantee
and insurance which covers about
two-fifths of the real estate loans
now held by insured commercial
banks. .. Real estate loans made
up per cent of the assets OF the
insured banks at the start of this
year. compared with only 3 per cent
two years earlier"
In the wage picture, an Associated
Press survey showed today that the
third round of increases does not in
clude some 1,250000 railroad work.
ers, or vast numbers of white collar
workers. Nor does it apply to tele-
phone workers and other union
groups that temporarily postponed
demands Or are conducting negotia-
tions now, such as in the current
issue between the Ford Motor Co |
and the CIO United Auto Workers.