The Price Gamble

As in almost every other major crisis, President Truman permitted his deadlock with Congress over OPA to come down to the last minute before making a decision. Then he took a long gamble.

Last week he had an extraordinary session with his Administration leaders in Congress. The price bill they brought him --after the fizzle of Senator "Pappy" O'Daniel's eight-hour filibuster--was, by their own admission, a dud but they agreed: it was the best that could be had. At least, it saved rent controls.

But Harry Truman, throwing caution to the winds, decided to veto the bill, even though it meant an almost complete break with his party leaders in Congress.

The veto message was blistering. With one eye on politics, Harry Truman singled out and named his villain of the piece: Ohio's Republican Senator Robert Alphonso Taft. It was Taft's amendment providing price increases for manufacturers based on profits in prosperous 1941 (plus subsequent costs), said the President, which would "compel thousands of needless price increases amounting to many billions of dollars." This, wrote the President, was the "mainspring" of "an impossible bill" that "provides a sure formula for inflation."

Strong Terms. Deliberately, in an effort to frighten Congress, the President stated his case in strong terms. He predicted that under the Taft amendment the prices of automobiles would immediately rise $250; those of washing machines, 30%; etc.

Bob Taft was quick to reply: "Utterly unfair . . . a partisan political attack. . . . In the Act . . . the President received complete power to prevent speculation and speculative increase in prices and all increases in rents. . . . He chose to take all the chances of chaos, followed by speculative rises in prices."

Harry Truman's justifications for his veto were not new. Chester Bowles, who resigned as Economic Stabilization Director last week in an evident move to strengthen the President's veto hand, had made the same arguments to Congressmen many times--and a majority of both Houses had rejected them.

If Politician Harry Truman had counted on Congress picking up the cue and becoming his supporting cast in a last-minute rescue, he soon learned his mistake. Within a few minutes after hearing his message, the House--by a margin of 38 votes--sustained the veto. The Senate turned down a resolution that would have extended the present law temporarily. It required unanimous consent--and Texan O'Daniel immediately objected. At midnight, 34 hours later, OPA died.

To the People. Could it be revived? Harry Truman made his follow-up play: he took his case to the people in another last-minute radio appeal, asked that they apply their pressure on Congressmen "to prevent inflation." An avalanche of telegrams descended on Washington (the White House reported that its wire score was 50 to 1 in favor of the President's action).

This week Harry Truman's angered Congressional leaders would try to put through a stopgap measure, thus give Congress time to consider a new control law. But reopening the fight would doubtless bring up new efforts to remove more controls. Already in motion was a drive to decontrol meat and dairy products. There might be a price-control holiday of two or three weeks. Harry Truman might get a worse bill; he might get none at all. He was a long way from winning his gamble.

What would happen to rents, and prices in general, in the period of uncertainty? Some of the answers were quick in coming. Real-estate authorities predicted a general increase of at least 15% in urban residential rents.* But in many crowded cities it would be more; many landlords sent out notices of increases. In Des Moines the OPA heard complaints of 35% boosts.

The meat industry predicted a 10% (about 5-c- a pound) lift. Said Harry B. Coffee, president of Omaha's Union Stock Yards Co.: "Consumers will pay more than OPA ceiling prices for meat--something 80% of them have been doing anyway." Forecast on milk: up 2-c- a quart.

In Detroit, automobile men were anxiously waiting to see where steel and other materials would go. No automaker wanted to be the first to raise prices; the industry itself did not want to risk ill will by leading a price-rise parade. General Motors' President Charles E. Wilson looked on the optimistic side: "If the nation's capacity to produce is utilized to the fullest advantage at the earliest possible date there need be no . . . inflation."

Would the lifting of controls surely mean boom and bust? Letting some prices rise would be painful, but in the long range, if it boosted production, it might help in overcoming shortages and reaching a leveling-off stage (see BUSINESS).

*Governor Thomas E. Dewey at once invoked New York State's rent-control law, signed by him last March and designed to continue OPA ceilings. The District of Columbia has a similar act.

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