Evening star., 1952-11-09
WoIcof, Set 10 Head
House >! Group, | Sees
End Of Price Controls
By Froneis p. Douqlos

ssss
By Froncis P. Douelos
Representative Wolcott. Repub-
lican. of Michiga n. who will head
the House Banking Committee in
the 83rd Congress said yesterday
he sees no justification in contin-
uing price and wage controls.
! Speaking by telephone from his
home in Port Huron. he said he be-
lieved these controls should be al
lowed to die with the expiration
of the legal authority for them on
April 30..
Another Of the chief features in
the economic controls law-the
Defense PREDICTION Acts that
providing for priorities and allo-
cations Of scarce materials.
Mr.. Wolcott said he did not
want to say at this time that soch
controls be allowed to die with
their expiration date OF June 80.
Will Consider Standby Controls.
Perhaps these controls should
be continued on the minor-or al
loy-metals to make such that the
military gets what is necessary. .
he said. This Is something we
will have to study. II we do dis
continue these controls altogether.
it may be necessary to give the
President authority to reimpose
them"
Mr.. Wolcott was asked whether
standby authority for price and
wage controls might be provided.
They could then be invoked, pre-
|sumably by the President. in case
an emergency threatened q re-
vival Of imitation forces.
1--WE will have to take a look
at that" he replied. II don't
know that it would be worth while.
But we will have a little more
confidence in their use in the fu-
ture by the President.
"The attitude Of Gen. Eisen-
hover" he added, "is that it would
be better to rely on indirect con-
trolls"
Rediscount Rates Mentioned.
MIR. Wolcott mentioned Fed
eral Reserve Bank rediscount
rates and reserve requirements
as examples Of these. The in
direct controls on consumer credit
were among those he saw no JUS
tification for continuing.
Installment purchase controls
the reserve boards Regulation w
already have lapsed. Regulation
x on real estate credit was sus-
pended last September Is when
new home construction fell below
the annual rate of IL million.
The Federal Reserve rediscount
rate is now Its per cent. It was
raised to that figure from is per
cent shortly after the beginning
of the Korean war. Mr.. Wolcott
pointed out that the reserve sys-
tenn has plenty Of leeway" In this
connection since the rate can 90
as high as Z per cent.
May Raise Reserve Requirements.
He said consideration may be
given to wider authority for the
Federal ! Reserve Board to in
crease requirements for member
banks. With the exception Of banks
in central reserve cities - New
York and Chicago - the Federal
Reserve cannot put the reserve re-
quirements any higher.
He said it may be proper to
provide for q 3 or I per cent in
crease in reserve requirements In
other cities 80 the Reserve Board
can raise the level if such action
is justified by danger Of initiation.
Present requirements are for a.
per cent reserves against deposits
by banks in New York and
Chicago; the legal maximum is
|26 per cent. In the 10 other re-
serve bank cities o 20 per cent
reserve is required and in banks
elsewhere q IA per cent reserve.
These requirements are at the
legal maximum.
Sees Accord With Capehart.
Mr.. Wolcott also would consider
revising the reserve requirements
of the Federal Reserve System
itself. Requirements now are
for a Is per cent gold reserve
backing up the reserve notes and
"a similar gold reserve behind de-
|posit liabilities. He said it might
be wise to restore the former 40
per cent gold reserve for the notes
and the IS per cent gold reserve
for deposits.
"The amount Of money now is
not controlled by the needs of
business. agriculture and industry
for cash." he said. The reserve
banks now can put up Govern
ment bonds instead Of eligible
commercial paper to complete
their reserves above the in addi-
ton to the gold. he said.
Mr.. Wolcott said he has not
discussed future legislation with
Senator Capehart of Indiana, who
is to head the Senate Banking
Committee. But" he added,
we're not going to have any
trouble getting together; we never
have"