Wait & See

On the surface, the U.S. people's first reaction to the sudden end of price controls was violent. Headlines told of prices of meat, milk, butter and bread shooting up. Like fat in a fire, accounts of sky-high rent boosts sputtered noisily in the news. In the first day or two it seemed to many that the nation had caught panic at the notion of being on its economic own, and free of Government price controls.

The people bombarded Congress with letters and telegrams; Ohio's Senator Robert A.Taft, the Republican strategist Harry Truman had labelled as the inflationary villain, averaged 1,000 wires and 2,500 letters a day, about evenly divided on keeping the OPA.

Ordinarily most members of Congress--particularly Senators--are not oversensitive to letter pressure.* They well knew that President Truman had incited much of this tide of jeers by his bold veto ramble and by his radio talk to the people. But the deep general fright over the rising cost of living showed through these letters. Many a Congressman caught the inflation jitters, took a long second thought.

The Administration's strategist, Majority Leader Alben Barkley, quickly sensed the sentiment. In four days of adroit maneuvering, he got approval (by the Senate Banking Committee) of a new OPA formula. Out the window went a compromise Bob Taft thought he had arranged. This week the Senate's battle of price control started all over again. U.S. citizens watched it anxiously. There was a strong move to take all controls off meat, poultry and dairy products. Only on rent controls did nearly everyone seem agreed, whatever bill Congress passed, it was all but certain that there would be ceilings over landlords.

Markets at Work. As the week of uncertainties "wore on, many a citizen got over his first fright of rocketing prices. By the end of the long Independence Day holiday most people felt somewhat better. The big blow they had expected had not hit. The nation's economy had not been shaken to its roots; it had hardly been shaken at all. The dollar had not gone to pot.* No panicky buying had developed at any market level.

Nevertheless, the people and their Congressmen kept their fingers crossed. Many still feared that the worst was yet to come. But the week had brought meaningful examples of free markets at work (see BUSINESS).

To consumers the most significant demonstration was in meat. At the week's start butchers' prices shot up everywhere --in many cities they were up 50% to 80% over ceilings. Most dealers were soon out of meat. But in the livestock markets supplies were heavy; prices showed signs of leveling off. By this week butchers could sight more meat coming than they had seen in many months. The consumer could see generally higher prices for almost all foods. Milk jumped 2-c- to 4-c- a quart. Butter was 80-c- to $1 a pound.

The worst of the bad news was in rents. Many a landlord gave notice of what he thought were reasonable increases--10% to 15%. But many others made spectacular headlines with fantastic increases --100% to 1,000%. Many of these were efforts to evict unwanted tenants./- In New Jersey an apartment-owner addressed his eight tenants: "It is with the greatest of pleasure that I announce . . . I'm giving you one month's notice to vacate, get out, in other words to scram."

Moppets at Work. Department stores and merchandising chains pledged no price lifts on present stocks. Organized buyers' strikes threatened in several cities, but failed to develop. But an unorganized one did, in miniature. In Phoenix, Ariz. tricycling vendors boosted their price of ice cream sticks by a penny. Result: moppets refused to buy. By the third day the price was back to a nickel.

The week of confusion was not a conclusive test of 1) how free markets might work out now, or 2) how U.S. consumers would react in the long run to increased prices. It neither proved nor disproved the country's fear of inflation when controls went off.

In the 1919-20 boom & bust, people had not worried about inflation. Their concern then had been their personal high cost of living; inflation was a vaguely understood thing that happened in Europe and had to do with printing-press money. Now it seemed that most Americans were worried more about the inflationary aspects of price rises than they were about the immediate high cost of living. They would wait & see how high prices might go.

So would organized labor, which held the keys to production and another spiral of wage boosts. But labor was restive; there were plenty of warnings about what it might do if prices rose all along the line. Snappish Walter Reuther said that his autoworkers would break every contract and reopen wage negotiations; the C.I.O.'s packinghouse workers gave notice that they would demand a cost-of-living bonus in their new wage contract talks next month.

But there was no stampede; the U.S. people were keeping their heads.

*Results of a Gallup poll announced last week: only 14 out of every 100 Americans had ever written to their congressional representatives; only nine of the 14 did it on their own hook.

*For news of a neighbor's dollar, see CANADA.

/-For one case, see PEOPLE.

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