Evening star. [volume] (Washington, D.C.) 1854-1972, 1950-12-17
Continued From First Page }

TIE acClOn COeS not aCJack at the
source of the basic problem of in
f1ation."
GIN insisted its December price
increase was reasonable and did
not materially affect the cost of
living or the national defense"
"Other price increases have been
ignored. particularly the prices of
commodities used in car produc-
ton and which are also used in
war material production" the
statement said.
Steel Price Boosts Mentioned.
It mentioned particularly recent
steel price boosts.
There was no immediate COM
ment from Chrysler on the roll
back.
George Romney, vice president
of Nash-Kelvinator whose Nash
Motors division announced price
increase Friday night, said of the
freeze order:
That rolls prices back below
their 1948 levels despite greatly
swollen costs. We are deeply con-
cerned about the general inf1a-
tionary situation that made our
action necessary and stand ready
and willing to cooperate in every
practical and possible way we can
to effect the sterilization essential
to keep costs and prices from get
ting further out of hand"
Valentine Outlines Policy.
Attached to the automobile or
der was a formal statement OF
considerations" by Mr.. Valentine.
1T is the firm policy of the
Economic Sterilization Admins
TRAITOR" he said, Ito move as
rapidly as possible to achieve sta
bility and firm balance between
prices and wages which can be
held for the duration.
This will neceSsitate the impo-
sition of controls wherever neces-
sary to achieve this purpose. We
cannot afford any longer to per-
NIT the upward spiral of prices
and wages"
The statement said that the pur-
pose of the temporary freeze is to
permit an analysis of the cost in
creases the companies claim, to
determine whether the price in
cYao COG ore ilIStifind
IF the analysis shows this to be
the case" the statement con-
tinued, the Administrator stands
ready to make such changes in the
ceiling prices as appear necessary"
1t was pointed out, however, that
profits for the industry have been
running at an time high and
third quarter 1850 profits are
higher than in any previous period
although they include many of the
cost increases under complaint.
. Escalator Widely Used.
The JAWS warning that it
would scrap contracts should wage
sterilization interfere with the
escalator clauses based on the Bu-
reau of Labor Statistics cost of
living index. came at a time when
labor conditions in the auto in
dustry appeared to be the most
settled in years.
All of the Big Three" Of the
industry. General Motors, Ford
and Chrysler, and many of the
small firms are operating under
long-term agreements permitting
no wage reopening for five years.
Whether Mr.. Reuther's warning
will bring about labor turmoil re-
mains to- be seen. the Associated
Press said in dispatch from De-
troit.
It all depends on whether Fed
eral regulations have any effect
on the escalator clauses. There
have been unconfirmed reports
here recently that wage stabili-
cation might, in effect, knock out
the operation of such clauses.
GIN Expresses Concern.
General Motors expressed con-
Germ over its contract with the
JAW in its statement criticizing
the price rollback.
This arbitrary price action"
GIN said, places in jeopardy the
flve-year agreement between GIN
and the unions representing its
employees"
GIN said it knew of "at least
one important union" that has
advised the administration amy
wage freeze or wage control ac-
ton that sets aside any part of the
five-year agreement will have the
effect from the union point of
view of canoeing the entire agree
ment."
Stanley H. BRAINS, publisher OF a
weekly analytical paper known as
Detroit Labor Trends" obtained
a photostatic copy of Mr.. Reuth-
er's letter.
Cites JAW Decision.
He quoted the letter as saying
that any Government order
(which modifies or renders inoper-
alive any provision" of recently
signed contracts would upset the
balance between wages and prices.
The letter went on:
For these reasons the fAW-
CLIO has decided that, if
governmental action, under wage
sterilization OF otherwise, makes
imperative any provision of our
agreements, such agreements shall
be considered terminated imme-
diately in their entirety and SUBJ
ject to renegotiation."
Mr. Reuther reasoned this way:
If price controls are effective, the
cost of living will not 60 up ma
terially and neither will wages
If price controls are not effective
then wages must be kept abreast
of rising prices.
Peace Uncertain.
A high Government labor Off
cial here today wasn't so sure that
the long term contracts neces-
sarily will bring peace to the auto
industry.
Clvde M Mills assistant djrec-