Behind the Scenes

The President last week killed an inflationary threat. He vetoed the Bankhead bill, S.B. No. 660, the latest move by the Congressional farm bloc to boost farm prices. No. 660 was inflationary in that it would have excluded Federal farm benefit payments from the calculation of parity prices for price-ceiling purposes. This would automatically have provided a higher base for parity prices, and would thus have forced ceiling prices up.

This was the President's 588th veto.* With it he sent the Senate his third major message on inflation. The first message, a year ago, had outlined a seven-point strategy to curb the rising cost of living. The second message, seven months ago, had found progress satisfactory on all points save three: taxes, farm price control, wage stabilization. The cost of living was still rising. Between April 1942 and February

1943 h.c.l. advanced 5%; food alone was sharply up 11.7%.

The Danger. Franklin Roosevelt blamed the rise in the cost of living mainly on "our failure to bring food costs under control." The Bankhead bill, he declared, would compound that failure. "Under it ... the price of sugar would rise 1 1/2-c- a pound, the price of bread might go up -c- a loaf. . . . The price of corn could rise almost 10% which . . . would certainly call forth a demand for higher prices for hogs and livestock, poultry, eggs, milk. . . . These price increases . . . might swell the cost of living more than 5%."

Then he stuck in a threat: "If by this bill you force an increase in the cost of the basic foodstuffs, and as a result the National War Labor Board increases wages, no one can tell . . . what those increased wages will ultimately cost the farmers and all people of the nation."

Then the President addressed all the people. "The time has come when all of us--farmers, workers, managers and investors--must realize that we cannot improve our living standards in a period of total war."

The Battle Lines. While the Senate might override the veto, experts expected the House to sustain the President. Even the greediest farm lobbyist knew that if the farmers took another grab, labor would shove up to the trough for its turn.

Organized labor, meanwhile, had been suddenly converted--for the time being, anyway--to opposing inflation.

Behind the scenes was a major unreported development. The big labor chieftains had been quietly taken aside and shown some startling figures. Among them were some Labor Department statistics showing that in the last quarter of 1942, the average hourly earnings of all manufacturing workers rose 2.3%. In the same period farm prices went up 9.2%. This was a fool's race; labor's wages could never go up as fast as farm prices.

They saw the light. Into the White House trudged William Green of A.F. of L., Phil Murray of C.I.O., Alvanley Johnston of the Brotherhood of Locomotive Engineers. When they came out, they had decided to stop hooking wages to the soaring cost of living. Now organized labor will try to hold wages level, and work at the other end, to cut down h.c.l.

* President Roosevelt, despite his supposed rubber-stamp Congresses, has, in ten years, vetoed more bills than any other U.S. President. Second: Grover Cleveland, with 464.

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