The Battle Is Not the Pay-off

The three-year-old Washington war over price and wage ceilings went into a new battle phase. The new battle cry: "Get your cut now, boys." Some feared that the Administration had become completely incapable of handling the major economic problem of war. On the other side, some Administration prophets saw ruin ahead, brought on by the greed of selfish pressure groups.

Was the U.S. so weak that it could not win its major fight at home?

Teapot Tempest. The immediate sector was the renewed fight over subsidies--an issue more boring to the average citizen than the oldtime tariff, and much less understandable.

The pro-subsidy argument: By handing out $900 million in food subsidies to farmers and dairymen (to be paid for by future taxation), the Government claims it can hold retail prices of most important foodstuffs at their present ceilings. The question: Do the means justify the end? To those who hold that a tight lid on prices is an absolute necessity, there was ample proof that the means are justified, buttressed by the fact that no sound alternative for subsidies has yet been offered.

The anti-subsidy argument had these valid points: 1) Subsidies may become a dangerous habit; 2) they might become a political weapon. But the argument relied chiefly on the premise that price ceilings are not sacred. The farm lobby boldly called for reinstitution of the law of supply & demand. Said potent Farm Lobbyist Ed O'Neal, a "little shot of inflation" won't hurt anybody.

This week, the House was set to pass the bill outlawing food subsidies after Dec. 31. The Senate is sure to do likewise. Equally certain is a prompt veto by Franklin Roosevelt, who killed a similar measure last July. To round out the fight, there is solid reason to believe that Congress will then sustain the veto. Many Congressmen will thus make a two-way record: They will have fought against subsidies and yet they will have supported the President, after all.

Economy Wave. The inflation battle saw skirmishes on other fronts last week. "Old Muley" Doughton's Ways & Means Committee finally reported a tax bill calling for no more than a $2.1 billion tax increase. The hell with the Treasury's $10.5 billion demand, said the hard-worked committee, our raise is enough. To help the committee along, Pennsylvania's Representative J. Buell Snyder reported that the Army & Navy are ready to cut current expenditures by a whopping $18 billion. That enormous whack took a great deal of sting out of many a patriot's desire to pay lots more taxes this year.

No less angry was the fight over wage ceilings. Congress seemed set to pass a resolution by Missouri's Senator Harry S. Truman which would put into immediate effect an 8-c--an-hour across-the-board rise for 1,100,000 railroad workers. This would wreck the authority of Economic Stabilizer Fred M. Vinson, who turned the raise down five months ago. The Little Steel Formula's body was now being trampled by almost every union in the country, pressing hard for raises, on the heels of John L. Lewis.

Creeping Inflation. But the current inflation battle would not be the payoff. Ever since the start of the war the U.S. has had a creeping inflation. Wages and prices have gone up, slowly and steadily. Last week the Wall Street Journal disclosed 97 new "hidden" price increases allowed by OPA this fall. The job ahead, now apparently threatened by the Congressional attitude, is to keep the creeping inflation only creeping.

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