Toot Suite

The biggest news in Washington last week was that a House committee very nearly voted out a bill giving the President real wartime price controls. The bill lost by one vote--10 to 9. The man who almost succeeded in persuading the committee to meet the nation's crisis head-on was a tall, hunch-shouldered man in his 80th year -- Bernard Baruch.

Glowering over his spectacles, Baruch arrived on Capitol Hill to give the Senate his recommendations for meeting the direst military crisis since Pearl Harbor. Adviser to Presidents and Congresses for more than a quarter of a century, he carried the outraged recollection that his counsel had too often been disregarded. In the past two years, Washington had brushed off his repeated advice that the U.S. get up off its hunkers and rearm itself. Many observers figured that Washington would go on brushing him off. Baruch, the ancient prophet, was out of date.

When he got to the capitol, Congressmen were debating Harry Truman's cautious program for partial mobilization

(TIME, July 31): it was as much as the President thought he needed--or as much as he thought he could get from Congress. But even for such controls as he asked, he seemed to be facing substantial opposition; some Republicans argued heatedly that his demands went beyond the necessities of the current crisis. Administration leaders anticipated a fight.

Then Baruch spoke in the high-ceilinged Senate caucus room before the Senate Banking & Currency Committee which was studying the President's proposed legislation. For three hours he testified, reading from a prepared statement, moving easily up & down the committee's table to catch their questions, waving a hearing aid in front of him like an antenna.

He thought the new tax bill should be at least twice $5 billion, that taxes should be "higher than a cat's back." As for the rest of the program--"There is one major fault which destroys much of its value. It does not go far enough."

Invitation to Inflation. Said Baruch: "Experience has taught us that when the Government steps into the market with such enormous demands requiring such quick priority, you must control all prices, including wages, rents, foods and other costs, eliminate profiteering and ration certain scarce essentials."

He demanded: "An overall ceiling across the entire economy, over all prices, wages, rents, fees and so on, with high enough taxes to prevent profiteering and to pay all defense costs, and an all-embracing, effective system of priorities."

Not only was the Truman program inadequate; it was dangerous, Baruch maintained. "Should this bill be enacted, without price control," he warned, "the Government may get what it wants, but with needless delay and ever-increasing prices. The public will be left to compete for the remainder--with the fattest pocketbook, not the greatest need, deciding who gets what is available. This bill, gentlemen, is an invitation to inflation . . .

"The gravest threats to the preservation of the American system today are not Government controls. They are military defeat abroad and further inflation at home."

Who Is Opposed? "Some contend," he said, "that price increases can be prevented by public appeals and threats to invoke price legislation. That hope has already been dashed . . . This legislation before you proposes that we deliberately refuse to lock the stable door until the horse is stolen."

Bernard Baruch was positive that the U.S. people were ready for price controls. Who opposed them? he demanded. "The millions whose savings will be reduced if inflation continues? The millions of teachers, firemen, policemen, nurses, civil servants, and others with fixed incomes? Old-age pensioners? Workers who find their real wages cut by rising living costs? Farmers who find the cost of the things they must buy mounting?"

In 1942, he said, Congress disregarded his warning and passed a "piecemeal, partial" measure. By 1943, "a terrible price had been paid in an inflation which added a hundred billions to the cost of war . . ."

How soon in 1950's crisis would he impose controls?

"Right now," barked Baruch. "Toot suite. Today . . . While we were stocking our homes with refrigerators and television sets, the Soviets were stocking tanks and radar."

As for mobilizing the nation, he summed up: "What I propose is that we organize ourselves--all our resources of men, money, materials, morale--so that whatever happens, the armed forces can get what they need, when they need it ... It is the choice of 'peace' or 'butter,' of mobilizing our strength now, while peace can still be saved, or of clinging to petty wants and petty profits . . . Which shall it be--discomfort or defeat?"

A reporter asked: Would Baruch take his proposals directly to the President? "No," snorted Baruch, who is no longer a White House intimate.* With that, he stalked out of the Senate caucus room.

Too Far v. Not Far Enough. At week's end, however, Baruch's proposals were being put up to Harry Truman in a manner which he could not sidestep. In the space of a few hours, Baruch's testimony had dramatically changed the whole political atmosphere.

New York's Republican Irving Ives wholeheartedly endorsed Baruch as "America's greatest prophet." Fifteen House Republicans joined in a letter commending Baruch's ideas. And suiting action to words. Republicans in the House Banking & Currency Committee tried and just missed voting out the bill designed to translate Baruch's doctrine into law.

Other Congressmen were still trying to find a Baruch-like formula. Alabama's Democrat John Sparkman presented to the Senate Banking & Currency Committee an amendment to the Truman program which would authorize 1) a wage freeze, 2) rationing of scarce commodities, 3) broad rent control, and 4) a rollback of prices to June 25--the day the Korean war began--and strict control as of that date.

But whether the atmosphere had changed enough was another matter. Harry Truman still said stubbornly that he saw no reason for going any further than he already had. Conservative Republicans --e.g., Indiana's Capehart, Ohio's Taft-- still thought that even the Truman program, though far short of the Baruch proposal, went too far.

* The bitterness between Baruch and Harry Truman dates from 1948 when Democrat Baruch refused to campaign for Mr. Truman and the President subsequently showed his pique. The feud was intensified by Westbrook Pegler, who quoted Baruch as saying the President was "a rude, uncouth, ignorant man." They have not been on speaking terms since, although Truman advisers, including the President's war mobilizer, W. Stuart Symington, see Baruch regularly and listen respectfully to his ideas.

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