Evening star., 1950-12-19
Off to a Bad Start

It is too bad that the Governments latest
venture into the field of price control is, to be
quite charitable an inauspicious start Some
of the situations created by the rollback and
freeze of automobile prices are reminiscent of
the Alice in Wonderland" days of the OPA.
There is already plenty of confusion and the
prospect is there will be more.
The price-wage controls program is one of
the country's chief weapons in battling imitation
as we knuckle down to the tremendous task of
meeting head-on the grave challenge of world
communism. There is every indication that we
must live with regulation for a long time to
come. Unworkable controls could bankrupt this
Nation before we get well into the monumental
struggle before us.
The very brief experience with the auto
mobile price freeze has shown how difficult it
is to apply controls successfully on selective
or individual industry basis. It may be proved
conclusively that this approach will not work.
The Wage Sterilization Board faces almost
impossible problems as it considers applying
curbS to the auto workers pay.
Modern-day industries are so interrelated
that any move affecting the economics of one
sets off chain reaction that is felt through
all. For example, how can automobile prices
be frozen when there is no control on prices of
the materials that go into cars? How can wages
of the auto workers be held rigid when workers
in a factory across the street are left free to
get all they can in the way of higher pay? It
is certainly something less than just to freeze
the pay of any group of people when there is
no lid on the prices Of things they must buy.
Vast inequities are bound to arise within the
same company under program of selective
price controls. GIN, as an example, employs
nearly 100000 people making things other than
automobiles. Those workers for some time to
come will have no brake on their pay-something
that is far from conducive to good employe
relations.
There are other problems too Wages OF
auto workers are adjusted by contract according
to the rise or fall of living costs. If the manu-
facturers are not allowed to raise prices 1t
certainly is not fair to let such provisions stand
And neither is it fair to the workers to suspend
the living cost adjustment until the sharp rise
of living costs is checked.
Sterilization officials apparently were poorly
advised in the way they handled the auto price
situation. Instead Of diplomacy, the "big stick"
or ultimatum approach was used. Soon after
the big companies raised car prices, they were
told that unless they suspended the increases
Uncle Sam would do it for them by force. This
angered the manufacturers. They were put in
position OF being branded as profiteers even
before the Government looked at their cost
sheets.
Any economic control program to be effec-
tive must have the support of the vast majority
of the people, including those in industry and
labor. And to have that support, regulations
controlling prices and wages must be worked out
on fair and equitable basis It would seem
that the only fair and workable way in the
present circumstances would be to freeze all
prices and wages for a temporary period while
fair ceilings are being adjusted on an industry
by Industry basis.