Evening star. [volume] (Washington, D.C.) 1854-1972, 1956-09-19
Second Of Three Articles


would balance the cost increases.
Price increases would not be
necessary.
Unfortunately. Government
analysts concede, productivity
has been falling behind. The
cost increases have been absorbed
by many firms which had COM
Portable profit margins. but re-
Gently more and more have
punched holes in the retail price
structure.
The Consumer Pays
One adviser to the White
House said privately today:
We've been building cost intoI
the economy faster than pro-
ductivity has been taking it out.
by now, I think, even the
unions realize that nobody can
pay for it except the consumer"
The price outlook, as seen by
this official, Is: Some further
increases, but not anywhere
near as sharp as they have been. y
The August consumer price
index, to be issued next week,
may show a slight decline from
the all-time high established in
July. Food prices generally are
dropping.
This is not necessarily reas-
surins, for the September index
may be up again. For one thing.
meat prices will reflect today's
sky-high quotations for live
stock.
Price Mark Ups to Grow
And many industries are pre-
pairing to break further bad
news to consumers.
Business papers indicate the
next few months will see a
lengthening of the list of price
mark-ups which already in
cludes such items as television
sets, refrigeFators, washers and
dryers. typewriters. ranges. rugs,
mattresses. shoes, luggage and
kitchen utensils.
The 1867 cars and trucks will.
come in at higher list prices.
Clothing may reflect currently
rising costs Of wool and synthetic
fibres. Sewing machines, phono-
graphs and lamps are ticketed
for increases.
Auto parts may jump as much
as 10 per cent. Canned food
prices are expected to reflect.
the higher cost of cans-which
In turn will reflect the higher.
cost of tinplate.
Additional price increases are
expected on such widely assorted
items as fuel, beer. farm imple-
ments and cement. And prices of
steel, aluminium and other basic
materials may go up again.
Highway Taxes to Hit
Nor have consumers yet felt
the full impact of the new Fed
eral highway taxes, which raised
the cost of gasoline. tires. and
tubes in July. Trucking firms,
which now must pay heavier
user" taxes, have begun boost
ing freight rates. That will add
trifie more to the cost of de-
liyered goods.
Eastern railroads have notified
the Government they want an
other freight rate increase, in
addition to the 6 per cent APP
proved in March.
A look at the wholesale price
index brings no comfort. That
yardstick of the cost of basic
industrial and farm commodities
stabilized in the spring but re-
sumed its upward march last
month. If the movement is SUI
stained, 1t eventually will mean
higher price tags on consumer
products.
Businessmen Plan Price Rises
A hint as to the expectations
Of businessmen was given in
Washington last week. at the
meeting of directors of the 28,-
000-member National Sales Ex-
ecutives. The directors polled
themselves on the question: Does
your company expect to raise
maintain, or lower prices on its
products during the next Il
months?
OF those polled. 81 per cent ex.
pected their prices to go up, A
per cent said they would hole
present prices, per cent sale
they would follow the industry
trend" Nobody expected lowel
prices.
Rising wage costs are usually
blamed when prices go up. Tit
NSE was no exception. An Of.
fetal said that rs per cent Of thu
executives polled expected theil
companies to raise wages. HI
said: IF you expect higher
wages. you expect higher prices.
Labor Eyes EscalatOr Clauses
On the labor side, it's a matte,
Of vice versa. To insure tina
wages go up when prices rise
union leaders are showing re.
vived interest in escalator clause
based on living costs.
July's OF per cent increase Il
the consumer price index brough
Accent hourly increase to l.,
100000 auto. aircraft and farm
equipment workers.
Yet Walter Reuther. presiden
Of the United Auto Workers
scornfully calls such cost-of-liv,
ing increases "the wooden nickel
Of imitation" He called on Con
gress to investigate the cause
OF imitation.
The total personal income o
Americans has been rising re
gently at annual rates as rapit
a. SIS billion month. II con
tinued to set successive all-timi
records even while serious un