Evening star., 1948-07-19
Berlin and Initiation

No matter how politically partisan in
motivation, the Presidents call for a
special session OF Congress takes on at
least measure of justification when re-
lated to current events. In that sense the
increasingly ominous and explosive nature
Of the Berlin crisis speaks pretty much for
itself. And even If we discount the posi-
bility of an early war-which we cannot
safely do-a plausible case can be made
for the thesis that speedy legislative action
is needed to cope with the growing infia-
tionary threat of spiraling wages and
prices.
That threat, which has become bigger
and bigger with each passing month, has
just been intensified by the new pay in
creases granted by the United States Steel
Corporation. The increases-to be followed
almost Immediately by hike in prices
mark the end Of an experiment that began
last April. At that time, in an effort to
lead an anti-infiation campaign, the cor
poration lowered prices and stabilized
wages. In the meantime, however, great
number of other industries, notably coal,
boosted both, and freight rates rose sub
stantially. To protect itself, therefore, to
operate profitably and get a fair return
on its investment, United States Steel, with
the industry as whole following suit, has
now been forced to join the inflationary
parade.
What this means is that we are in for
another Jump in the cost of living. Steel
Is fundamental to our economy. When its
price goes up, a vast complex of other
things becomes almost automatically
costlier. These things range all the way
from heavy durable goods to kitchen
utensils - big machinery, housing, auto
mobiles, refrigerators, washing machines
and great multitude of other items used
by virtually every American every day.
And as imitation strikes here, the conta-
gion tends to spread elsewhere, with fresh
demands for higher pay to meet the rising
consumer costs, and with the higher pay
leading in turn to new price boosts until
the dollar begins to lose meaning.
1t is this vicious circle, this process of
imitation feeding and fattening on itself,
that accounts primarily for the fact that
the average wholesale price index for all
commodities stands today more than 108
per cent higher than in 1910, with food
and farm products advancing about 148
and 179 per cent respectively. Nor have
recent months shown any real trend to-
ward a decline or leveling-off. On the
contrary, though perhaps representing the
closing phase of our imitation, there has
been slight but steady climb, with the
result that the dollars purchasing power
less than half what it was in prewar days
continues to weaken.
Considering this years great food crops,
however, and considering the all-out char
acter of our current consumer production,
there are many experts who hold that 1t
ought not to be very long now before
supply catches up with demand and the
situation stablizes itself, thus ending the
threat of an acute and disastrous imitation
According to this view, irrespective of the
disturbing development in Steel no prac-
tical good can be accomplished at this
stage with measures like rationing, a1lo-
cations, wage-andprice ceilings or standby
control powers of the sort requested by the
President in the past.
Time may prove such optimism sound.
But 1t assumes continuing peace-an
assumption open to serious question in
view of what is happening in Berlin. Ger
tainly, If there is an explosion there, we
shall have to move swiftly and drastically
to re-gear our economy for military pur-
poses and simultaneously protect it from
the kind of imitation that could destroy it.
In sum, whatever may have been the
Presidents original intention in calling it,
impending events conceivably may justify
the special session of Congress as a grave
necessity bearing upon much more than
rising living costs.