Evening star., 1951-05-06

"1ACt11Ck WIG 44l4AebO4OA4 AoAA NC
full impact of defense spending
and the consequent curtailment of
civilian production strikes the
economy with a blow not yet felt,
but only anticipated. is another
story.
If it can be, it will be the first
time in the history of the United
States that the country has under
taken a major mobilization with
out escaping the evils of imitation.
Wilson Is Hopeful
Charles E. Wilson, director OF
the Office of Defense Mobilization
exuded confidence that defense
production goals will be met when
he spoke before the American
Newspaper Publishers Association
in New York, but when he got
around to talking about the sta
bilization aspects of the program
halting the price-wage Spiral-he
said it was time for some one tc
pass the aspirin. Yet, on the bal
ance, he was hopeful that the job
could be done.
In the final analysis, Mr.. Wilson
added. the battle against imitation
must be won by the attitude o1
the individual citizens who mus
do their jobs as well as they know
how, be content with reasonable
profits and reasonable wages, anC
understand the need for higher
taxes and the other measures nee.
essary to stem imitation.
This will not be, as he conceded
the easy task it would have beer
had the enemy struck in New
York, instead of far away Korea
because the threat to our inStitu.
tions is not so immediate and per.
sonal, not so readily compre.
Ihended by the individuals whose
Willingness to accept the necessar!
sacrifices is vital.
Optimistically, Mr.. Wilson hopee
that the pressure groups of in
Idustry, labor and agriculture
would, for the emergency, pu
aside their special interests, ant
pull together in a united effort
So far there have been few sign
that this hope is well founded.
Some Freezes Punctured
Organized labor returned las
week to the mobilization and sta
bilization agencies which it boy
cotted two months ago when i
tcharged the program was donai
mated by big business" But il
announcing the return of labo
Representatives. the United Labo
Policy Committee emphasized tina
it was still not satisfied ant
thought "the cards still stacket
against the consuming public"
The January freeze on wag'
increases at 10 per cent above th'
levels of January, 1850, alread!
has been punctured by the 6;
cents hour increase allowed
last week to incorporating EN-
Iployes of the railroads, under al
escalator clause tied to the cos
of living.
Several million organized work
Iers have escalator clauses in thel
contracts, and some provide alst
for an annual Improvement fac
tor" increase, based on assumed
increases in productivity. Thes'
lhard-won bargains will not light
ly be given up by organized labor
Business groups have reactet
strongly against the pricing polio!
Economic Stabilizer Eric Johnston
announced recently that NJ
price increases would be allowed
in any industry subject to exces.
profits taxes, that is, an industr!
in which average profits are 8;
per cent of the best three years o.
the four-year period, 1946-1949
inclusive. g, This was intended tc
require some absorption of cos
increases.
Ruml Objects
But businessmen now have the
advice of BeardSley Ruml. former
chairman of the New York Fed
|eral Reserve Bank and author o1
the World War II pay-as-you-ge
plan for collection of income
taxes, that payment of an excess
profits tax will be sign of weak
management. Management, he
said, should seek to find other
ways to spend the money that
would otherwise go to the Treasury
as excess profits taxes. Among
the possibilities he suggested re-
search on new products, increased
advertising and larger stating al
the executive level in anticipation
|of future requirements.
Fuel was added to the disputt
between labor and industry las
week when the Federal Trade
Commission and Securities anc
Exchange Commission reported
on a sample survey of 1850 profit!
in 81 industry groups, showing
an increase last year, ever 1949
of 81 per cent before taxes anc
43 per cent after taxes.
The validity of these figures wa.
challenged by the United State.
Chamber of Commerce on thu
ground that they covered only
manufacturing industries - abou
one-third Of all corporations-anc
that other industries did not fart
SO well. The chamber had othel
objections, such as that the figure.
reported did not take account o1
rising inventory and replacement
costs.
The farm organizations, an.
other of the pressure groups men.
toned by Mr.. Wilson, are unitec
in their opposition to any tamper.
ing with the parity formula, ag.
riculture'S equivalent of labor's
|eSca1Qf0r cIousoc and tn apy OF