Freer & Higher

No sooner had the Government issued the new decontrols on materials and prices (see NATIONAL AFFAIRS) than the law of supply & demand reasserted itself. In areas where shortages still existed, prices moved up. On the West Coast, crude oil went up 10-c- a barrel, and Socony-Vacuum predicted a nationwide boost of 1-c- a gallon in the price of gasoline. Scrap copper, supplies of which had dwindled to almost nothing in expectation of a free market, scooted up 4-c- a lb. to 25-c-. Since that was more than the ceiling price on refined copper (24 1/2-c- a lb.), metalmen were sure that the refined metal will spurt closer to the world price of 36-c- if its price controls are lifted. Steelmen predicted that prime scrap steel, now at $36 a ton in New York, would soar $10.

The Government's lifting of quotas on the production of many civilian products, plus its easing of the Controlled Materials Plan, meant that once defense orders on the books are filled, producers can supply their civilian customers as they choose. At first glance, that seemed to be better news than it is. Actually, materials are so short that producers are already turning out as much as they can.

In the auto industry, for example, the quota for the second quarter is 1,500,000 cars, whereas materials have been allotted for only 1,250,000. Automen have had their hands full getting enough metals for even that many cars. With metals still tight, a bigger test will come when & if ceilings on copper, steel and aluminum are abolished. Since scrap prices are rising, the primary metals are sure to follow if the ceilings come off.

Despite the probability of such scattered increases, there still seemed little threat of any overall puff of new inflation. Nevertheless, the Eisenhower Administration was taking no chances. Back into harness as stabilization consultant came James F. Brownlee, 61, a Manhattan businessman who did stints with OPA and WPB during World War II, at war's end became deputy director in the Office of Economic Stabilization. Brownlee, working with Studebaker's President Harold S. Vance, will help set up new mobilization machinery. Best guess is that Jim Brownlee would make a strong argument for a stand-by control bill for use against any further inflation.

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