Holding Up the Ceiling

With Plaster dropping from several conspicuous places in its price ceiling, the OPA stopped shuffling its feet before the advances of aggressive wholesalers and retailers on August 11 and announced plans to raise most limits set in May by the General Maximum Price Regulation. This move, which will increase the housewife's budget, as well as the cost of war production, has long been predicted as inevitable in view of the ridiculously small powers so far given to Price Administrator Leon Henderson.

Chief stumbling block in the program are regulations involving farm price control. For three months the farm bloc has ridden rough-shod over Henderson's best-laid plans and will continue to as long as the OPA must seek the approval from the Secretary of Agriculture for every limitation it plans in that field. At present farm prices cannot be touched until they reach one hundred ten per cent parity. So far this obstacle has tied OPA's hands so tightly that, although beef, cattle, and lamb are now selling at better than one hundred twenty per cent parity, Henderson has not been able to touch them. Faced with the greatest inflation threat in our history, the Administration still confronts a stone wall in the Department of Agriculture, which holds that prices must go still higher to encourage wartime farm production. Besides giving the farmer a chance to play war for all it's worth, this policy forces retail dealers to raise prices in order to survive. That way eventually lies inflation and financial collapse.

A complete solution to the problem of inflation may soon call for compulsory savings or a sales tax, but price confusion must be cleared up immediately. If Henderson is to handle the problem, he should receive a freer hand and more cooperation from Congress. OPA must be given more money: a larger, better-organized staff; complete control over farm prices; general independence; and power to enforce its regulations.

At present Henderson is blocked by a determined farm group and resentful Congressmen, who blame him for the troubles of their petty-businessman constituents suffering under price ceilings and for refusing OPA patronage jobs to their politician colleagues. If Henderson remains tied to the coattails of various conflicting and overlapping government agencies, wartime prices will soon work hand in hand with inflation. What is needed to avoid this is an economic high command with unrestricted power to direct all phases of wartime living.