The Clinton chronicle. (Clinton, S.C.) 1901-current, February 08, 1951, Image 7
Thursday, February 8, 1951
' " * M
PRICE RISES LOOM
DESPITE NEW CURBS
THE CLINTON CHRONICLE
Washington, Feto. 3—Despite price
control the consumer faces a price
rise of another 3 or 4. per cent or
more in the next six months, along
with steadily worsening shortages of
goods.
A steep tax increase is another
certain (blow, sooner or later. It may
hjt the consumer twice—by taking
more out Of his paycheck by with
holding, and by adding excise taxes
to the things he buys.
He emphasized that this should
not be taken as a forecast of auto
production, because ^substitution and
conservation will be possible to pre
vent "anything like” a correspond
ing cut in motor oar output. The
auto makers themselves look for a
dip of perhaps 40 per cent later this
year.
Radio and TV Output
Radio and television makers re
port that their output will be off 25
I ^ — • v/w» W TV AJ.A v/i*.
As for scarcities, official have to 35 per cent by April and possibly
hinted that by the second half of this ( 45 or 50 per cent by summer, be-
■VPar rJgafpncn rtlan+e
I
4
year defense plants may be taking
50 per cent of a few critical mater
ials. Output of autos, radios, washers
and home appliances will dip—prob
ably not by half, but enough to hurt.
The pinch, in other words, is just
beginning. It will last about 13
months, by present signs, before the
country gets over the hump of re-
amament and the pressure eases.
That was made plain when the
joint chiefs of staff fixed their $87
billion defense spending goal a few
days ago.
The billions represent planned
spending and contract-letting be
tween last July 1 and the middle of
1952, to accomplish this three-fold
strategic aim:
1. Raise, train, arm, equip, supply
and maintain a fighting force cap-
i able of waging all-out war for one
year.
2 Bring industry to a state of
re&diness which will permit full-1
scale war production before that!
year of grace expires.
3. And meantime, maintain the|
forces in Korea, perfect the home de
fense by air and sea, build up the!
National guard and reserves, and 1
arm our Allies overseas.
This means a rain of inflationary
federal dolUrs, beating against a
price fixing structure which admit
tedly is leaky to start with.
Some Economic Stabilization ag
ency officials harve predicted private- 1
|y that the cost of living will move
up 3 or 4 per cent because of exemp
tions, loopholes and wage-increase
factors in the stabilization policy
adopted.
Other Federal economists, also un
quotable by name, set the probable
riae even higher. A few estimate that;
• climb of 1 per cent a month is still
possible. The December gain was 1
1-2 per cent, and some believe It will (
be hard to cut that rate in half.
RaUMting I'nlikely
Yet with fair unanimity, officials
discount the likelihood of consumer
rationing on any broad scale. Food
is plentiful, goods wtU be scarcer but
the average family has obtained its |
new refrigerator or vacuum cleaner
and has bonght its recent-model car.|_
And If Congress approves Presi
dent Truman's proposal to pile $3,-
bi.lion in new excise taxes on con
sumer goods, that will be a kind of
ration ng*in itself. Some of the low
er-income families will be squiixed
out of luxury market. . |
Administration officials who pride
themselves on Judging the mood of
Congress jjrediet Mr. Truman prob
ably will get most of his spending
$10 billion revenue-raising request
That iicludes $4-billion in income
taxes, and $3 billion more in corpor
ation levies.
Whether he will get approval of
the other « billion needed to balance
next year’s budget is less certain,
these sources say.
But sentiment among officials, fa
vor a strong tax policy to cut down
demand and achieve preparedness
without piling up new debt.
On the other hand, wage boosts
are expected for millions of workers
after the Wage Stabilization board
arrives at its final formula.
Production Costs
This will hike production cost^ To
cover such cost factors, ESA has in- ,
dicated that factory prices, now fro
zen, soon will be shifted to a flex
ible cost-plus-normal profit pattern, j
At retail, too, the present flat ceiling j
will become a ceiling on profit mar
gins, so that store-keepers may pass
on higher costs to consigners.
The numerous food items which
haven’t yet reached a parity price re
main free to rise. And because parity
is based on the cost of things farm
ers buy, parity itself will be mov
ing upward for a time.
Price Director Michael V. DiSalle
put the prospect frankly in testimony
(before Congress. DiSalle said ESA j
cannot yet stop the upward trend,
just slow it down. It’s like a car
traveling 60 miles an hour, he said,
it must be slowed before it can be
stopped.
Most auto companies predict their
output this quarter will be 20 to i
30 per cent below 1950’s record rate.
Looking farther ahead, a high NPA
official recently told auto producers]
that the full extent of the military
"take” is not yet known. But as a
guess, he said, the .total might come
to 50 or 60 per cent of some mater
ials before the end of the year.
they reach a parity figure, or a fig
ure equal to prices in May of 1950.
While this effects only about a doz
en major crops which are under par
ity, the provision in the law works to
prevent freezing of prices on all farm
produce.
The Farm Bureau Federation, the
only major farm organization to do
so, is definitely opposed to price con
trols of any farm produce, or any
other commodity,. including wages.
In a recent statement, Allan Kline,
president of AFBF, declared if such
ceilings were placed on farm pro
duce, farmers would not give all-out
production. Others questibn this pre
mise, asserting that the farmers, if
asked to do so by their government
in the cause of national security
would give the same all-out pro-
Jduction that any other segment of
As Washington Sees It.. .1 Th "? IS but
.... ...... es of farm commodities are rising.
iHF NAT(inA mFNF Durin ^ thc p ast few wcoiu such
■I*" IlHIIvnML «IvLmL crops as wheat, corn, soybeans and
1 hogs were crowding the parity fig
ure, where they could be controlled
under the law.
«• •'> - ,4::. ... j
Here is the picture: if farmers are
making money now on $21 hogs, they
could continue to make money if
price* on everything they bought wai
frozen at comparative prices. The
only other out, is to permit the price
, of hogs to soar to $31 as happened
In the meantime, a battle is under, during the last war, and pay the dif-
way in (Jongress for amendment of [ ference in subsidies, which is costly
the national production act of 1950; and must eventually be paid for in
cause of cutbacks in copper, alum
inum, cobalt and other metals.
Special to The Chronicle.
Washington, D. C., Jan. 24—Latest
time-table for the imposition of price
wage controls, which at first
and
may take the form of a temporary
freeze, U about March 1. Prices may
be rolled back to a November or De
cember 1 figure.
to eliminate the provisions which
prevent control of farm prices until
taxes. However, if prices can be peg
ged, and at least costly subsidies 1
avoided, then the farmers and ev-
ery other taxpayer would be better
off. There is no question but that
the faimer would rather not have
subsidies. He has been traditionally
opposed to such « plan, preferring
to get his fair price in the market
place. But if farm prices are not
controlled and are permitted to rise
under the law of demand, folks sim
ply could not afford to buy pork
over the counter from $31 hogs.
Hence the subsidy system during the
last war. President Truman has said
he will seek amendment to the act
to permit control of farm commod
ities at fair prices.
The battle over the nation’s for
eign policy was started in the first
week of the new 82nd congress, ev
en before the President had delivered
his state of the union message. Sen.
Robert A. Taft of Ohio made his piten
as an administration critic by ques
tioning the President’s constitutional
right to send troops to Europe in sup
port of the Atlantic Treaty while the
nation is not in a state of declared
war. It will be remembered Tarft
questioned this right even with re
spect to Korea. Taft’s position is
that we should wait until Russia
strikes in Europe before sending Am
erican troops, while the position of
the administration is that sufficient
armed forces in Europe may prevent
such a strike, and therefore may pre- j
vent war.
Page Seven
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