Retreat into Battle

The new stabilization program and the old OPA were in the fight of their lives. Like a wily general retreating to more favorable ground for a stand, Economic Stabilizer Chester Bowles last week gave way. And he made shrewd use of a Napoleonic strategy: buy off enough opponents so you have a chance of licking the rest.

Freedom for Oil. With the oil industry he made an uneasy peace by promising to suspend price ceilings soon on all petroleum products. As oilmen have vociferously pointed out, the supply of most petroleum products is now equal to demand. The only shortage is fuel oil, and the coming of warm weather should ease that.

OPA also offered an increase of 10-c- a barrel in crude prices. But, thanks to the surplus, the price of gasoline will probably remain the same, when & if the industry is "de-controlled."

Stabilizer Bowles partially placated the auto industry with a boost in car ceilings, to take care of rising wage and material costs. From now on, new car buyers must agree to add the increase, when OPA decides on the amount, to the price of their car. Reflecting auto wage increases, the first boost may be 5%. Price of a Ford Tudor Sedan, for example, would be increased by $45. Eventually, as the new wage policy boosts costs all along the line, automen expect the increases to run as high as 12%.

As a peace offer to another large segment of industry, OPA plans to lower price ceilings for new manufacturers of such items as toasters, lawn mowers and fountain pens below those of established makers. Now, new manufacturers often have ceilings outrageously out of line. In some cases, they were set 150% above those of established companies, in the weird belief that this would spur production. Instead, old manufacturers simply stopped unprofitable production, and the shortages became worse than they had ever been before.

Defeat for OPA? Having made these strategic retreats and truces, Stabilizer Bowles made his stand against the toughest enemy of all--the cotton bloc. OPA fears that the soaring price of raw cotton will wreck its low-cost clothing program. But Bowles was badly mauled by cotton patriots two months ago when he tried to put a ceiling on cotton, the only basic commodity without one. This time he tried a flank attack.

He proposed that U.S. cotton exchanges boost margins on cotton futures $10 a bale for every cent a pound rise above 25-c-. (At the present price of 26-c- a pound, on the New York Exchange, this would increase margins 1 1/2times.) Few knew whether this would hold down prices. But it raised the tempers of cotton patriots so high that they loudly threatened to liquidate OPA if it continued to tamper with the sacred right of cotton to rise as high as it pleased. Nevertheless, Stabilizer Bowles was stubbornly determined to check cotton prices. If increased margins did not work, ceilings would. No cotton patriot thought Bowles could win that fight. Oklahoma's cotton-loving Senator Elmer Thomas growled ominously: "OPA is cutting its own throat."

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