The Price of Eggs

The week's biggest headlines were on control of the atom (see INTERNATIONAL). But the week's biggest news was in the nation's groceries. It concerned the price of eggs.

The U.S. was in for a major change in its economic life. After four years of regimentation, the war-erupted mountain of Government restrictions was about to disappear.

The final, half-hearted skirmishes over price control in Congress mattered little. For OPA was already beaten. Probably no bill could pass Congress which would in any way satisfy Economic Stabilizer Chester Bowles. The prospect was that in six months the stabilization program would consist of little more than rent control and some priorities aimed at channeling building materials into housing for veterans.

U.S. industry--and with it, U.S. labor --would now have the long-deferred chance to see what free enterprise could do in a free market.

Joy Ride? It was the result of happenstance rather than design. President Truman, starting out to fight deflation on V-J day, had naively assumed that the U.S. could have free collective bargaining and rigid price controls at the same time. He had relaxed wage controls. This put every major industrial dispute squarely up to the White House, where labor usually got what it wanted.

The Administration then devised a wage-price formula based on the expectation that increased production would enable industry to foot increased wage bills out of profits still to come. But materials shortages and secondary strikes had shown that settlement of a major strike was no assurance of profitable production to come. Thus the wage hikes brought price hikes, and the workers' increased pay was largely nullified.

Congress' inclination was to let 'er go and wipe out almost all controls. The people had screamed when the House emasculated OPA; but House members went home for recess and did not change their minds. An even sharper bill, taking the lid off almost everything, passed the Senate last week by an overwhelming majority (53-13).

Chester Bowles cried "Fraud," and pictured the U.S. embarking on a "joy ride to inflation." Caustically, Georgia's Senator Walter George replied: "Chester Bowles is the most inflated product that I know of."

No one doubted that prices would go up --certainly for a while. The guesses ranged from 20% to 50%. Businessmen figured that full production in all industry would be reached by next January, and that the end of the sellers' market would come in spring. Then prices would come down, with cautious buyers shopping around for goods.

For the long pull, the businessmen saw a short "depression" in late 1947, followed by a continued boom and full employment through 1950.

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