Laying the Blame

The management of U.S. industry was filled with the comforting thought that it had done its duty. By granting pay raises which labor unions felt they could accept, management had shown a degree of economic statesmanship. But had it shown enough?

The wage raises, which had brought peace to heavy industry, would help keep up the purchasing power of many union members. To that extent, the boosts would lessen the effects of high prices and the dangers of a slump. But the benefiting unionists were only a small minority of consumers. The No. i problem for the U.S. was still to keep up the purchasing power of the majority. This could be done only by lowered prices. Was it not time that management showed a high degree of economic statesmanship--and lowered prices on a broad scale? Were not profits so high--despite wage increases--that businessmen could afford to lower prices?

Last week, businessmen were told "yes." This time the telling was done, not by unions or other outsiders, but by industry's own National Planning Association's business committee. On it sits such industrial brass as Macy's Beardsley Ruml and General Electric's C. E. Wilson. Said N.P.A. in the bluntest warning business has yet received about its price policies: regardless of the reasons for the dangerous price situation, the responsibility for correcting it was "squarely up to businessmen. Other economic groups must cooperate. But it is to the risk-takers of our system that the public logically looks for risk-taking." Consumer prices have outrun consumer purchasing power and "price increases, with some significant exceptions, also ran ahead of costs and thus brought a sharp expansion of profits in 1946 and through the first quarter of 1947. . . . Abnormally high earnings such as these cannot last. Many prices today are badly out of line and must be brought down. If orderly price reductions do not become more general, business must share the blame for the slump that is sure to come."

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