Road to Inflation

Under strong lobby pressure to end all price controls, the House of Representatives has pasted together another patchwork quilt of economic irrationalities and short-sighted solutions. Business and farm groups envision a speculator's paradise in which they will make a quick, sure killing; the amended Price Control Act is the result of their wondrous wishful thinking. The inflation that may soon follow would be tragic for most Americans, the large majority of whom favor blanket renewal of the OPA for another year. With elections approaching, Congress is gambling-but national inflation is hardly worth the risk.

During the pre-OPA period of August 1939 to May 1943, average consumers' prices rose 31 percent. Since OPA and hold-the-line, they have risen only another 3.4 percent. With price ceilings on machinery and readily produced consumers' items already lifted and with production of civilian goods at an all-time high, 12 more months of price control would assure an orderly distribution of new goods at existing prices. The twin battles of production and inflation are nearly won, yet manufacturers and farmers, in their greed, are willing to scrap national safety and welfare in a frantic last minute rush for profits.

The new amendments to the Price Control Act would merely strangle the OPA slowly rather than end it with one clean knife thrust. Conspicuous spending in Miami Beach bistros and metropolitan race tracks make good reading but represent hardly a trickle of the national spending power waiting to burst out of the temporary confines of banks and bonds. When the new Price Control Act requires that ceilings on any item whose production for "a 12 month period is equal to its production for the peak year, July 1940 to June 1941" be lifted, economic dynamite is being held too near the flame. Today's goods-hungry consumers could snap up total 1941 production in a month, leaving thousands unsatisfied. All-out bidding would begin, and-before production could catch demand-prices, costs, and wages would be climbing skyward in a grand spiral. The clause guaranteeing a "reasonable profit" to producers, processors, distributors, and retailers is ludicrous; most have been making more than a reasonable profit for months. If price ceilings work a special hardship on a manufacturer, the individual case should be corrected; all ceilings should not be eliminated. Removal of food subsidies by the end of the year is especially ill-timed, coming at a moment when humane decency calls for a renewal of food rationing to help avert world famine. Without subsidies, food prices will rise, and farmers will hardly turn produce over to the UN at low prices when the sky is the limit on the home market.

Finally, by requiring the OPA to report its plans for self-liquidation on October 1, Congress is, in fact, extending the Agency in name only. Business and farm groups will be encouraged to flaunt price violations in the doomed Agency's face or else hold goods off the market for the remaining nine months of OPA life. The big fight between small groups and the public is on. Not until an uncrippled OPA is given another year's lease on life will the NAM and farmers' silly symphony be silenced and another 1929 avoided.