Drastic Surgery

Any businessman who wet a finger to the economic wind last week felt a good deal of hot air blowing from all directions.

Up before the Economic Club in Manhattan rose Chairman Alan Valentine of the Economic Stabilization Agency. "Do we need drastic surgery such as general [price & wage] controls?" he asked. Professorial Dr. Valentine then gave himself a cryptic answer: "We shall soon know . . . as we observe a few test cases now under way in important fields." Valentine did not name the test cases, but it was a good bet that he was thinking about the steel industry, where a wage increase is sure to be followed by a price rise. Perhaps Dr. Valentine was trying to frighten other businessmen who had price rises in mind.

Dr. Valentine's question got a slightly different answer from Manly Fleischmann, general counsel of the National Production Authority. Said Fleischmann: if $50 to $60 billion is appropriated for defense for fiscal 1951, the U.S. will be forced by midsummer to establish something like the Controlled Materials Plan of World War II. That would mean controlling copper, steel, aluminum and other strategic materials all the way from production to consumption, and allocating them for specific military and civilian products. If this program should cut down supplies of such consumer goods as autos and refrigerators, Fleischmann added cautiously, "I should think that rationing would have to be considered."

Actually, all the predictions were pure guesses. This was made plain by Army Secretary Frank Pace Jr., who said that it was not yet possible to provide a broad blueprint of what military requirements were going to be for fiscal 1951. Without such a blueprint, no one could tell how big the arms burden would be and what controls would be needed.

NPA went ahead last week issuing another batch of selective controls: P: Steelmen were ordered to deliver 30,000 tons of steel to shipbuilders for construction of Great Lakes ore carriers in the first quarter of 1951. Next on the list: allocations for oil refineries and power plants.

P: The ban on "frivolous" construction was extended to bars, cocktail lounges, golf courses, swimming pools, tennis courts and yacht basins.

This file is automatically generated by a robot program, so reader's discretion is required.