Evening star. [volume] (Washington, D.C.) 1854-1972, 1951-08-05
Controls Out of Control
Consumer to Get Little Relief From High Prices
Under Cost and Margin Provisions of the Act
By Wheeler Johnson

Inc NaLlOn IaSG week began 10
live with a new economic controls
law. Congress, scrambling to beat
headlines everywhere, presented it
with a. measure officially known as
the Defense Production Act Amend
ments of 1851. The bill is just as
formidable as it's title.
If the average consumer had any
hope that he would find magic re-
lief from high prices in its provisions,
the best early estimates of what
the bill will do should awaken him
from his rosy dream.
Certainly the President doesn't be-
lieve the bill will do much to halt
the inflationary spiral. In signing
it about five hours before all controls
would have expired Tuesday night,
Mr.. Truman denounced the measure
as "the worst I ever had to sign"
= Further, he declared, he would
have vetoed the bill if the imitation
control provisions were the only ones
with which the act was concerned.
But in reluctantly signing the
measure he went along with the
hodge-podge legislation because, ne
said, the powers necessary for the
defense program would have expired
unless he did, and he could not
risk the lapse of the rent control
and strong materials priority con-
troll clauses.
Pity the Poor Consumer
Fears of President Truman and
his economic aides that the price
control section will do little to help
the ultimate consumer appear well
founded on examination of some Of
the acts provisions.
The chief of these is the one re-
lating to prices of non-farm products.
Under the 1850 measure, the Office Of
Price Sterilization was permitted to
freeze or cut prices back, with prices
which prevailed during the month
preceding the Korean outbreak be-
ing the guide for ceilings.
The new bill added a provision
for the protection of the producer,
and because of 1t the consumer is
likely to pay more for many processed
goods. The OPS still is allowed to
roll prices back to pre-Korean levels,
but the agency now is required to
recognize, in fixing prices, increases
in costs of labor, materials and even
sales promotion and advertising from
the month preceding Korea up to
July Is. In other words, price cell
ingS would have to be fixed at a
level assuring retailers, wholesalers
and manufacturers their customary
percentage margins over costs"
1t appears rather obvious that
under this provision the OPS is going
to have more prices to roll forward
than to roll backward. An indication
of what probably will be a general
trend came Wednesday, the day after
the bill was signed by President
Truman. Chrysler Corp. gave OPS
unofficial notice that it will seek
a 911 per cent increase in the price
of its automobiles. Even before that
development, observers had predicted
the auto industry in general would
ask for increases of about 10 per
cent under the profit margin pro-
vision.
President Truman'S feeling about
this provision-known as the Cape
hart amendment was wildly ex-
pressed in his statement on signing
the bill. The President reserved his
bitterest denunciation for this Sec
ton. He said:
This complicated amendment will
force price ceilings upon thousands
of commodities, clear across the
board. 1t is like bulldozer, crash
ing aimlessly through existing price
formulas, leaving havoc in its wake.
IF we are to prevent the weak
ening of our economy, we must
change these provisions and others
just as bad"
Another strong indication that
prices are going to continue to rise
came Friday when the Wage Stabil-
Nation Board recommended unani-