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Show Inflation Threat Will Become a Dread Reality If Everyone Scrambles for Excessive Profits, Wages if J v -Ay- ?!m , .tm?m .cgC FARM EARNING Uy CUT IN HALF fA 455000 FARMED "jagjp LO$Y THEIR LAND During World War I prices rose swiftly. After the armistice on November No-vember 11, 1918, there was a sudden dip, lasting only three months. Then the upsweep was resumed, soaring until midyear of 1920. The price level more than doubled between 1917 and 1920. When prices broke in the later months of 1920, a toboggan slide began that brought ruin to millions. Only Controls of OPA Prevented Runaway Prices During War. By WALTER A. SIIEAD WNU Staff Correspondent During the war years, if we became be-came peeved with rationing and price control it was the national hao-it hao-it to cuss OPA. During reconversion, reconver-sion, people, from the captains of industry on down the line and Into the ranks of congress, blame many of our ills on OPA. There have been ridiculous and oft-time oft-time funny jokes cracked about the OPA and the controls instituted for the protection of the American pea-pie. pea-pie. And, as is the case in any human hu-man institution, the OPA has mace mistakes, errors of judgment. Congress has been deluged with letters from constituents, business men and consumers, concerning real or fancied ills and discriminations discrimina-tions which were laid at the door of the Office of Price Administration. And congressmen, being human too, let the blame rest on OPA, passing the buck along. But despite all this criticism, despite verbal beatings which tore to shreds the actions and policies of OPA, congress dared not eliminate the agency, despite strong pressure, and by an overwhelming majority voted to continue OPA and the price control policy until next June. And every poll taken of the American people showed, despite their beefings, their sound common com-mon sense prevailed and 75 out of every 100 people favor continuing price controls for at least some months to come. Only in recent weeks various groups in trade and industry have been increasing pressure in calling for an end of price controls, particularly particu-larly in the building and housing industry, in-dustry, preferring to let prices find their own level. As a matter of fact and record, had it not been for the OPA and the policies of rationing and price control, con-trol, the American people would never have been .in the favorable position they are in today to face whatever may come in these months of reconversion growing pains. For price controls have held the line against inflation and rationing controls con-trols have seen this country the best fed in its history. Most folks don't understand infla-. infla-. tion and what it means, but most people do understand and resent and fear high prices. The records show that every major war in which the nation has been engaged has been 'that the general level of price fluctuation remains steady. Farming has become one of these specialized industries, relatively, and a great many of the things used on the farm and in the farm home are purchased. Too, many farm investments in-vestments and obligations incident to the farm business are long term obligations, and so the behavior of the price level means much to farmers. farm-ers. For instance, I was talking to a Pennsylvania dairy farmer in Washington recently. He lives in the potato country of Pennsylvania and when I asked him how his potato crop was he said: "Well, I didn't plant any. I figured my business is dairying and I let the potato farmers raise potatoes." What is inflation? There are many long and technical answers to that question. But about the simplest answer this writer can find is that it is a situation which creates an unfair change in the purchasing power pow-er of money. For instance, a farmer who borrowed bor-rowed some money in 1913 could have taken $5 of that borrowed money mon-ey and bought 40 pounds .of meat, 152 pounds of flour, 91 pounds of sugar or 77 yards of gingham. If he paid back that loan in 1920 during dur-ing the period of inflation, the lender could have taken the same $5 and HOLDING THE PRICE LINE -rft ON THE THINGS YOU BUY U V fe to be assured that the cost of living or the cost of operating a farm or a business will not be permitted to go up into an inflation spiral. They want price controls continued for the present. All three of the major national farm organizations have strongly supported the price control program. pro-gram. Labor organizations, too, have given unstinting support. The farmers in the older age brackets do not easily forget what happened when what few controls existed were dropped shortly after the armistice in the last war. A first, prices slumped rather sharply in some commodities, but within a few months, after reconversion and workers returned to their jobs in peacetime plants, the downward trend was reversed and within seven sev-en months the inflation boom was in full swing. Prices rose skyward; manufacturers, wholesalers and .retailers .re-tailers were forced into a wild scramble for inventories. Prices soared higher and higher. Farm prices skyrocketed 109 per cent between be-tween 1914 and 1920. If farmers, merchants, manufacturers manufac-turers can be certain that the costs of things they buy will not skyrocket and threaten a major crash later, they can make long-term plans for large-scaje operations and production produc-tion and full employment. If workers work-ers can be certain of this full employment em-ployment at adequate wages, then they also can feel secure of the value of their purchasing power . . . will feel free to spend for reconversion reconver-sion goods and this free spending will stimulate more employment. Farm and City Linked. On the other hand, if swiftly rising ris-ing prices make production costs unpredictable, un-predictable, business will not be able or willing to plan ahead, full production produc-tion will falter and fear of unemployment unem-ployment would make consumers afraid to spend. We have often remarked re-marked about the analagous relation rela-tion between the farmers' income and full employment in cities, for it is a fact that when income of workers work-ers is . high, farm income also is high. When there is heavy unemployment, unem-ployment, farm prices toboggan. Price Administrator Bowles has given his word that OPA is going to use every resource at its command to continue an effective job with the ultimate goal of keeping a sound price structure upon which can be built sound prosperity. When danger dan-ger of inflation is past, then OPA plans to step out of the picture. (The present act ends June 30, 1946.) To do this he plans (1) wherever neces sary to continue price controls over goods and services which have been controlled in war time; (2) to sel prices on reconversion goods; (31 to work out simple dollar-and-cents ceiling prices for building materialf and as many consumer goods item? as possible; (4) to require manufac turers to tag consumer goods with easy-to-read retail ceiling prices. Continued control over tractors other farm implements and machin ery, fertilizer and seeds so lonf as they are in short supply is on the program. It may be necessary to increase some prices as compared to prewar, but the plan is to keep all prices as near prewar level as possible. Bowles says that price control alone cannot guarantee prosperity, but he believes- that it can help Jo control inflation by keeping the buying buy-ing power of each dollar and will enable industry, agriculture and labor, la-bor, together with government, to work together toward a sound postwar post-war prosperity. are best for the farmer. Any tem-a tem-a rising prices would be eaten up by things that he has to buy. bought only 21 pounds of meat, 62 pounds of flour, 26 pounds of sugar or 23 yards of gingham. The borrower bor-rower returned the same number of dollars, but he did not return the same amount of purchasing power. 1H Million Farms Lost. Inflation during and following the last war lost to the farmers of this country approximately a mill inn and a half farms. Why? Because prosperous farmers during the war invested their money in land at inflated in-flated prices. They went into debt for machinery, for homes, barns and other commodities at inflated prices. Then the purchasing power of the dollar changed and the deflation defla-tion which followed the inflated values val-ues brought about the inevitable crash. Chester Bowles, the boss of the OPA, Is a business man. He was the head of a large advertising agency agen-cy which was in daily contact with big business. So he knows big business busi-ness practices and he has become the rock upon which the pressure groups are dashing themselves in an effort to break price control. Chester Bowies has taken nis stand against price inflation and for price control, because his office is flooded with hundreds of letters every ev-ery week testifying to the fear with which people view inflation or high prices . . . and these letters come from big and little people alike . . . from farmers, workers, housewives, consumers, small business men. One theme predominates . . . they want Stable prices for farm products porary profits he might make througl the increasing cost of manufactured i accompanied or followed by a major ma-jor inflation, followed by deflation of equal proportions. Rise Held to 29 Per Cent. And for the first time in our nation's na-tion's history, thanks to OPA, the cost of living, during and immediately immedi-ately following this war, has been held fairly steady. From the outbreak out-break of the war to the end of 1944, living costs, as measured by the bureau bu-reau of labor statistics, rose less than 29 per cent, and most of that rise came before May, 1943, when teeth were inserted into the price stabilization program. By comparison, compari-son, living costs rose more than 84 per cent in a like period after the outbreak of the First World war when there was no rationing or price control. Labor unions declare the rise in the cost of living has increased in-creased more than 29 per cent, reaching a 40 per cent figure, but even so, if that is true, it does not reach the dazzling heights to which living costs went after the last war. Farmers, because of the nature of their business, suffer more than any other group from inflation infla-tion and the crash which inevitably inev-itably follows. As a matter of fact, it makes little difference what the price level may be, so long as it remains stable . . . and assuming that the incomes to the various occupational groups are fair and equitable. The more specialized and the more commercialized the business busi-ness is, the more desirable it is STABLE PRICES I tomg ENCOURAGE Sfol 4k Jnff 5jH I STEADY BUYING Tv V U ' IjSAI for MAKE GOOD MARKETS ifLl I I r INDUSTRIAL WORKERS FOR FARM PRODUCTS |