Evening star., 1951-08-01

JenSG FTOuuCLtOt ACt U"'o''"
mentS:
I have reluctantly signed S.
TIT, the Defense Production Act
Amendments of 1851, which was
passed by the Congress yesterday.
Unless this measure had become
law, the powers necessary for
carrying out our defense program
would have expired tonight
This new act continues, with
little change, the Governments
authority to control production,
channel materials, and aid busi-
ness in the interest of national
defense. To some extent, the new
act strengthens these powers, par
ticularly with respect to aids for
small business. The act also con-
tinues rent control, and permits
recontrol of rents in certain criti-
cal areas. The production and
rent provisions Of the act are thus
relatively adequate, though they
do not meet all our needs.
But the imitation control pro-
visions of the act are gravely
deficient. If these had been the
only provisions Of the act. would
have vetoed it. We will not be able
to hold down rising prices under
this act, and I am going to ask
the Congress to amend it to give
us adequate controls.
This act will do great harm to
our price and wage controls. The
full extent of the damage cannot
be determined until the executive
agencies have had sufficient time
to study the legislation in detail.
Many of the new provisions are
complicated and vague. and 1t has
not been possible, in the brief
time since Congress passed the
law, to estimate fully all Of its
effects on present price ceilings
and on the administration of
price control.
Will Roll Prices Forward.
But it is already clear that the
principal effect of the new amend
ments will be to raise ceiling
prices for the manufacturer. the
wholesaler, and the retailer. More
over, the act prohibits further
rollbacks in the price of beef, and
makes effective rollbacks on other
vital cost-of-living commodities
practically impossible. In general,
the act will roll price ceilings for
ward from their present levels.
pushing them up to heights that
we cannot yet foresee. Further
more, the act greatly increases
and complicates the administra-
tive difficulties of price control.
AS result, even after prices have
reached the new and higher levels
which the law requires. we may
mot be able to keep them from
going still higher.
One of the worst provisions of
the act, the Butler Hope amend
Iment, wipes out slaughter quotas
on beef, thus encouraging the re-
turn Of black markets.
Another provision of the act
which will operate against the in
tereSt Of the American people is
the Capehart amendment. This
complicated amendment will force
price ceilings up on thousands of
commodities, clear across the
board. 1t is like a bulldozer, crash
ing aimlessly through existing
pricing formulas. leaving havoc in
its wake.
II we are to prevent the weak
ening Of our economy, we must
change these provisions and 9TH
IerS just as bad. AS soon as the
executive agencies can complete
their study, I intend to urge the
Congress to revise and strengthen
this law, point by point, to give
us the tools we need to fight in
flation.
Step in Right Direction.
1 understand that several men,
oerS OF the Congress, recognizing
the deficiencies Of this act, have
already introduced legislation to
restore authority for slaughtering
quotas. This is certainly a steu
in the right direction. But it is
only one Of the respects in which
this law needs immediate i'm
Iprovement.
In future months, as our defense
production takes a larger ant
larger share of our output, we have
to expect that pressure on prices
will increase. Only tremendous
drop in private investment or con.
sumer spending could keep rising
expenditures for defense from
bringing on new pressures TOWARD
higher prices. And these pressures
could be aggravated, at any time
by a change for the worse in the
international situation.
To the extent that this act per.
mits prices and the cost of Twins
to rise, it will be necessary to allow
reasonable adjustments in wages
We cannot ask the working people
Of this country to reduce then
standard of living just to pay fol
the higher profits this act pro.
vides for business. And then we
would be caught in another price.
wage spiral.
If we are to prevent a serious
drop in the purchasing power ot
the dollar, we must have a good
strong price control law to helr
us through the period ahead
Without that kind Of law, we can.
not protect ourselves from the
Ifrightful damage of renewed in.
flation.
Will Increase Costs.
S. TIT is not that kind of law
1t is a law that will push prices
up. 1t is a law that will in
crease the costs of business and
the cost of our defense program tc
the taxpayer. 1t is a law that
threatens the stability of oul
economy in the future. More
over, it prevents us from giving