Evening star., 1952-03-05
Capehart Would LEI
Price Amendment Die
In Extension Of Act
By Froncis P. DouoIos

By Froncis P. Douglas
The author Of what President
Truman refers to as the terrible
Capehart amendment" does not
care particularly whether the
amendment is repealed.
Senator Capehart, Republican,
Of Indiana, said so yesterday. His
statement was made as the Sen-
ate Banking Committee, Of which
he is member, launched hearings
on the extension Of the Defense
Production Act, with its controls
Of prices and wages and other pro-
visions for mobilizing the Nations
economy.
The Capehart amendment to
the act was voted by Congress last
summer. It provides that manu-
facturerS may have their ceiling
prices raised to cover increased
costs between the start of the Ko-
rean war and last July 26.
Mr.. Truman, in asking that the
act be extended, also asked that
the amendment be repealed.
Sees Purpose Served.
Senator Capehart asserted that
the amendment has had a salu-
tary effect in stabilizing prices and
has served its purpose. He said
the July 26 date provided a warn
ing that increased costs after then
would not be taken into account
ana that repeal would mean los
ing the benefit of that cut-off
date.
A better break for consumers
appeared in prospect on the basis
OF statements at the committee
nearing, although witnesses
warned that controls must be re-
tanned. These points stood out.
I. Defense Mobili7er Charles e
wilson reported a falling off in
prices, which certainly is good /"
He said that, when declining
wholesale prices begin to affect re-
tal prices. competition will mean
That many products will sell below
the ceilings.
z. Mr.. Wilson also saw no need
Tor further cutbacks in supplies to
producers Of consumer goods and
no further falling of in civilian
goods output.
Metal Supply Easier.
8. Metals supplies are easing, at 4
least temporarily. Manly Fleisch-
mann, Defense Production admin \
iStrator. announced that 80 million |
pounds Of aluminium and from 20
million to Is million pounds of
copper are to be distributed to
civilian producers.
4. Chairman William McC. Mar
tin. jr., Of the Federal Reserve
Board. said that, even if Congress
repealed the provision Congress
adopted last year directing a re-
Taxation Of credit controls, he
would not favor stiffening the
rules on installment buying and
on real estate loans at this time.
But he wanted the law changed to
permit the Reserve Board to tight
en- up on credit, if it becomes nee
eSSary.
In his testimony. Mr.. Wilson
backed up the President and also
asked for repeal Of the Capehart
amendment. He said he knew of
some applications coming in un-
der this amendment which woult.
be pretty COSTLY"
Steel Price Hinted. o]I
Aren't you talking about steel?"
Senator Capehart asked. Mr.. VIII
sons only answer was a smile and
q not too happy one.
Il have been told the steel COM
panies have been requested to
make applications for price in
creases because of wage increases
they may have, to pay" Senator
Capehart said. "But that would
be after the July rs date"
Mr.. Wilson had said the flood
OF applications for Capehart CELL
ing boosts had caused prices to
rise by an estimated $3.50 million.
He said applications for increases
still ahead may run to another
$3.50 million.
Mr.. Martin, In his testimony,
said the Reserve Board and the
Treasury are working together ITO
develop an effective program" to
finance an expected deficit. Pressed
to explain the program, he said it
may mean higher interest rates
on Government bonds. He stressed
the may" He said also it may
mean revision of the Savings
Bond program.
Objections Aroused.
Mr.. Martins apparent accept
ance Of a deficit as a foregone
conclusion aroused objections.
Senator Douglas. Democrat, of
Illinois said it was as fataLstic
as the attitude of the Maine coun-
tryman who told friend he-was
''going to Bangor to get drunk,
and he dreaded it like hell"
Senator Capehart urged Mr..
, Martin to recommend to every
Senator and Representative that
expenditures be reduced to the
level Of income. Mr.. Martin de-
INJURED. Senator Robertson, Dem
ocrat, of Virginia supported him,
saying:
"They (the Reserve BoardO can
tell us the dangers of imitation,
and the military can tell us the
dangers Of getting our brains
beaten out, and then we can make
up our minds what we want"