| Show inflation threat will become a dread reality if everyone scrambles for excessive profits wages only controls of OPA CIPA prevented runaway Runa ivay prices during war by WALTER A SHEAD staff correspondent during the war years it if we became peeved with rationing and price control it was the national habit to cuss OPA during people from rom the captains of industry on down the line and into the th e ranks r a aks ot of congress blame many ot of our ills on OPA there have been ridiculous and of t funny jokes cracked about the OPA and the controls instituted for or the p protection rot c tion of the american america n people and as Is the case in any human ir tit ution the OPA has made mistakes mistake s errors of judgment con congress gr has been deluged deluge d with letters from constituents b business men a and d consumers cone concerning real or fan fancied c led ills and dl discriminations sc wh which ch were wee Is laid d at th the door of the office offic e of price administration and congressmen being human too let the blame rest on OPA passing the buck along but despite all this cri criticism t 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 minority voted to continue OPA and the price control policy until next june and every poll taken of the american people showed despite their beef ings their sound common sense prevailed and 15 75 out of very every people favor continuing price controls for at least some gome months to come only la in recent weeks various groups in trade and industry have leen been increasing pressure in calling tor for an end of price controls particularly in the building and housing industry preferring to let prices find their own level As a matter of fact and record had it t not been tor for the OPA and the po policies libles of rationing and price control the american people would never have been in the favorable position they are in today to face whatever may come in these months of growing pains for price controls have held the line against inflation and rationing controls have seen this country the best fed in its history most folks dont understand inflation and what it means but most peorl do understand and resent and tear fear high prices the records show that every major war in which the nation has been engaged has been 1919 1920 1921 I 1 M M A al ax 7 FARM wr IN HALF 4 53 farmere LIM LAND 2 during world arld war I 1 prices rose swiftly after the armistice on no N vember rember 11 II 1918 there was a sudden dip lasting only clr three months then the be upsweep was resumed soaring until midyear of 1920 the price level evel more than doubled between 1917 and nd 1820 1920 when prices price broke la in the later months of 1920 a toboggan slide began that brought euln to m s 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 arm investments and obligations incident to the farm business are long term obligations and so the behavior of the price level means much to farmers for instance I 1 was talking to a pennsylvania dairy farmer in washington recently ile he lives in the potato country of pennsylvania and when I 1 asked him how his potato crop was he said well I 1 plant plan t any I 1 figured my business is dairying and I 1 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 of money for instance a farmer who borrowed some money in 1913 could have taken 5 of that borrowed money and bought 40 pounds of meat pounds of flour 81 91 pounds ot of sugar or 77 yards of gingham it if he paid back that loan in 1020 1920 during the period of inflation the lender could have taken the same 5 and HOLDING THE PRICE LINE ob i 0 I 1 11 ON THE THINGS YOU BUY 0 po 19 stable prices for farm products products are best for the farmer any an tem horary profits he might make through rising prices would be filter eaten up by the increasing cost of manufactured things that he has to buy accompanied or followed by a major inflation followed by deflation of equal proportions rise held to 29 per cent and tor for the clr first s t time in our nations ton history thanks to OPA the cost of living during and immediately following this war has been held f fairly steady from the outbreak of the war to the end of 1844 1944 living costs as measured by the bureau of labor statistics rose less than 29 per cent and most of that rise came before may 1843 1943 when teeth were inserted into the price stabilization program by com comparison parl living costs rose more than 84 per cent in a like period after the outbreak of the first world war when there was to no rationing or price control labor unions declare the rise in the cost of living has increased 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 ban any other group from inflation if 0 n and aad the crash which inevitably I 1 t follows As a matter of ct tact fact it makes little difference what the price level may be so BO long as it remains stable and assuming that the incomes to the various occupational groups are aj e fair air and equitable the more specialized and the more commercialized the business is the more desirable it is bought only 21 pounds of meat 62 pounds of flour 26 pounds of sugar or 23 yards of gingham the borrower returned the same number of dollars but he did not return the same amount of purchasing power 1 million farms lost inflation during and following the last war lost to the farmers of this country approximately a million end and a half farms why because prosperous farmers during the war invested their money in land at inflated prices they went into debt for machinery for homes barns and other commodities at mated inflated prices then the purchasing power of the dollar changed and the deflation which followed the inflated values brought about the inevitable crash chester bowles the boss bass of the be OPA Is a business man lie ile was wag the head bead of a large laree advertising agency which was in dally daily contact with big bl Pu business siness so he be knows big business practices and he has become the rock rack upon which the pressure groups are dashing themselves in an effort to break price control chester bowles has taken his stand against price inflation and for pr price ic e control because his office is flooded with hundreds of letters every 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 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 labor organizations too have given unstinting support the farmers in the older age brackets d do 0 not easily forget what happened when what few controls existed were dropped shortly after the armistice in the last war at first prices slumped rather sharply in some commodities but within a few months after and workers returned to their jobs in peacetime plants the downward trend was reversed and within seven reven months the inflation boom was in full swing prices rose skyward manufacturers wholesalers and retailers t ailers were forced into a wild scramble for inventories prices soared higher and higher farm prices skyrocketed sky rocketed per cent between 1914 and 1920 if farmers merchants manufacturers 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 scale operations and prodoc tion and full employment if workers can be certain of this full employment at adequate wages then they also can feel secure 0 of f the value ot of their purchasing power will feel free to spend tor for slon goods and this free spending will stimulate more employment farm and city linked I 1 on the other hand if swiftly rising prices make production costs unpredictable business will not be able or willing to plan ahead full production 1 will falter and tear fear of unemployment would make consumers afraid to spend we have often remarked about aboud the analogous relation between the farmers income and full employment in cities for it Is a tact fact that when income of workers Is high farm income also is high when there Is heavy unemployment 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 aund price structure upon which can be built sound prosperity when danger of inflation is past then OPA plans to step out of the picture the present act ends june 31 30 1946 to do this he plans 1 wherever necessary to continue price controls over ever goods and services which have been controlled in war time 2 to set prices on goods 3 31 to work out simple douar dollar and cents ceiling prices for building materials and as many consumer goods items as possible 4 to require manu manufacturers ra c to tag consumer goods with easy to read retail ceiling prices continued control over tractors other farm implements and machinery fertilizer and seeds so long 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 ai 5 possible bowles says that price control contral alone cannot guarantee prosperity but he believes that it can help to control inflation by keeping the buying power of each dollar and will enable industry agriculture and labor together with government to work together toward a sound post past war prosperity |
