Evening star., 1951-08-24
Truman Message Congress Early

O
II urge the Congress to reconsider
and repeal them.
The first Of these is the Cape
hart amendment.
| This amendment permits indi.
Ividual sellers to pass on to con-
sumers all cost increases in the
Is months since Korea, whether OF
not there is any justification fol
the higher prices.
The Capehart amendment sad
dies the consumers of America
with a promissory note of higher
prices payable to business on de.
mand. And business can choose
Its own time to present this de.
mand note to a helpless public.
The amendment is unnecessary
Under the previous law, there
was ample provision for price
relief to sellers who legitimately
needed it. The fact that this
amendment was not needed is
amply demonstrated by the re-
Imarkable level of business profits
during the last few months.
The Capehart amendment is
an economic BOBBY trap. If it had
simply and openly provided a
straight across the-board increase
lin ceiling prices. the damage to
price control would have been
clear and clean. But the delayed
action fuses in this amendment
make it all the more insidious
and all the more dangerous, be.
cause these fuses are set to ex-
Iplode at the very moment wher
they will do the most damage
when inflationary pressures be-
come most acute.
The amendment will make price
control regulations more compli-
Gated and endanger the develop
ment of dollars-and-cents ceilings
which are so helpful both to busi-
ness and to the consumer-and SO
important to effective enforcement
of controls. The ONCE of Price
Sterilization had been planning
to speed up the issuance of dol
lars-and-centS ceilings posted for
every one to see. This program
will now be greatly hampered, and
in many cases probably made i'm
possible.
Consumer Unprotected.
1t is also clear that the Cape
hart amendment will shift more
of the burden Of our defense pro-
gram to the shoulders of those
least able to bear it. ALI along the
line, under the Capehart amend
ment, business is protected. Busi-
ness is told that it need not alb
sorb rising costs. But no such as
surance is extended to the con-
sumer, the wage Garner. and the
people living on pensions and
other fixed incomes. They stand
at the end of the line. and the
effect of the Capehart amendment
is to take all rising costs-the cost
of materials, of labor. overhead
advertising, corporate salaries
everything-out of their pockets
Some of these people may be able
to get belated increases in theil
incomes. but others have no hope
Of this. and all of them viii suffer
The direct price-raising effects
of this amendment are by nc
means the whole story. Equally
serious are the enormous admins
trative and accounting burdens
which this amendment imposes or
both Government and business
The amendment may create ire
mendouS burden of individual pricl
adjustments for the stabilizatioT
agencies to handle. The making
of these adjustments will be par
ticularly complex because it viii
require cost data which most bust
ness concerns are not equipped t,
supply, except on the basis of ar
bitrary guesses. The result will b'
to discriminate against small bust
nesSes which do not have the &C
counting staffS to compile tn,
complex cost figures required b.
the amendment.
I cannot believe that the Con
gress was aware of the difficulties
it was imposing on the whole bust
ness community-not to speak o.
the consumer or the Government
by its approval of this provision
The second of the three amend
mentS which do the most damage
is the Herlong amendment, guar
lanteeing pre-Korean percentag'
Imark-ups for distributors.
Under the guiSe of giving whole
salers and retailers their Gus
ltomary percentage ~mark-ups OF
the things they sell, this amend
ment invites Americas two mil
lion distributors to become com
mission statesmen for imitation. I
offers them a percentage stake il
every price increase.
1 The Congress knows full well tn,
bad effects of the cost-pluS-a-per
centage-of-cost principle in pro
curement contracts. and that i
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