Evening star., 1950-12-14
By james Y. Newton

Agard to wage and price controls now
has crystalized to the point where it is
possible to forecast with some hope of
accuracy just what is likely to be done
in this field affecting the pocketbook of
every one. The situation has become
much clearer despite the continuing
welter of rumors and reports about the
emergency action President Truman will
take.
First. it is highly unlikely that there
will be an immediate general freeze Of
prices and wages. With the probable
exception of automobiles. it is also un-
likely that price ceilings will be clamped
on any of the day-to-day things people
buy for some weeks to come. In the case
of groceries most officials agree there
must be a change in the control law
before the prices of so-called market
basket" items can be held in line.
Because of the worsening war situa-
ton. however, and the stepped up mobi-
lization anG defense spending program
necessary to meet that situation, the
administration now is pretty we'll COM
mitted to an eventual program OF gen.
eral. mandatory price and wage controls.
A. conservative estimate is that at least
six weeks will be required to put pro-
gram of such size into effect. It may
take much longer.
Sterilization Director Alan Valentine
and Price Director Michael v. Di Sale
ceilings to automobiles. The reason
they are doing this is that they hold
to be unwarranted the eek-old price
lo1v% %t,a $1r,o To-
manufacturers - General Motors and
Ford. The other auto makers are con-
sidering raising prices. And the pro-
ducers make pretty good case for
higher prices, in that their costs in
materials and labor have risen greatly.
Outside of this specialized field. 1t is
likely that the first action will be taken
to hold down the rising costs of military
and rearmament items. This may be
done by applying a price freeze at the
industrial level to the materials which
go into the weapons Of war. such as
steel, aluminium, copper and other
metals. A large part of the recent pres
sure for such a freeze has come from
defense officials concerned over the rising
military budget. Action in this big field
may come within few days, and 1t may
even be accompanied by roll-back in
the prices OF some materials.
Some of the sharpest recent price
increases, and any housewife will testify
to it. have come in the grocery field.
But there Federal stabilizers offer little
hope Of relief soon.
The reason is this: The authority to
control prices and wages comes from
the Defense Production Act. which Con-
gress passed in September. The law says
that ceilings put on foods must reflect to
the farmers q price at least equal to
parity on the products he raises. And
despite the high price of groceries. most
products at the farm level are selling
below parity. Parity. you know. Is for
mula calculated to maintain the farmers
purchasing power at the high level it
enjoyed before World War I.
Most Federal officials agree that II
food prices are to be controlled any
time soon, either the restrictions of the
defense law must be removed, or sub
sides must be applied to farm products
on wide scale The subsidies could be
used to prop produce prices up to the
parity level.
President Truman Is under heavy
pressure from Congress and elsewhere
to order an immediate freeze of all prices
and wages, and then to work out the
details of more equitable ceilings later.
Most of his advisors are against it.
Here's why:
They point out the obvious fact that
any freeze of the entire economy would
also freeze countless thousands of inequi-
ties both in the price and wage fields.
Price and wage ceilings. even when set
with the greatest possible care. result in
many unfair situations, enough to tax
huge administrative staff organized to
correct them. Inequities. unless quickly
corrected, breed contempt and disregard
for regulations and laws. The Presidents
advisers fear that If prices and wages are
frozen. the whole program of controls
may break down before equitable ceilings
can be worked out.
Mr.. Di Sale has been in Office only a
week. He estimates it will take from so
to 80 days to recruit the administrative
and enforcement staff necessary to
handle general price controls. Right now
he has virtually no staff.
Why has it taken the Government so
long to prepare for controls?
Soon after the law authorizing controls
was passed, Gen. MacArthur's armies
began their sweep up the Korean pen
insula. The war situation looked good.
Most people believed We were in for
short fight, and that after it was over the
country could sit back and prepare for
gradual build-up of military strength
to the limits authorized by Congress. In
such case, there would be little need for
mandatory price and wage controls. In
this atmosphere, it became almost i'm
possible for the Government to recruit
executives of the ability necessary to
handle the control program.
More than month went by before
Alan Valentine was appointed to the
top post of stabilization director. 1t took