Inflation

Dinning into Washington from every state in the union and every nation in the free world were reports of food prices going up, rents going up, wages going up, doctors' bills going up, in what London's Economist called "the continuing crisis of our times, the fall in the value of our money." One day last week, the U.S. Bureau of Labor Statistics reported that in June the U.S. cost of living had gone up a sharp one-half of 1% (to 120.2 with 1947-49 as base of 100) to its tenth successive alltime monthly high. This took the dollar down to 95-c- worth of a March 1956 dollar, 50-c- worth of a pre-World War II dollar. Down, too, during the past 16 months were the currencies of Britain, Italy, Sweden, Belgium, Australia and Japan (about 5%), India (10%), Spain (11%), Argentina (16%), Brazil (27%) and Chile (41%).

In the warm glow of an abundant summer there was little outcry from the American public against the U.S. creeping inflation. In fact, the few complainers were grumbling mostly about governmental action designed to stop the creep--e.g., the U.S. tight-money policies (see BUSINESS). In France and Japan, there were real outcries against import controls, in India against present wage ceilings in nationalized factories. When the chairman of Sweden's Riksbank (roughly equivalent to the U.S.'s Federal Reserve) increased the discount rate to 5% last month, Sweden's Socialist-Agrarian government, sensitive to popular pressures, kicked the banker out of his job.

But the fact remains that the massive creep of inflation has responsible economists worried. Not the least of their problems is the fact that inflation is built into inflation. Item: when the U.S. Bureau of Labor Statistics reported the 0.5% cost-of-living increase last week, the wages of some 650,000 electrical, aircraft, automobile and trucking workers automatically went up under wage-price escalator contracts by 2-c- to 4-c- an hour. These high marks in turn set goals for other unions and for unorganized workers to shoot at. And the increased wage levels set the stage for rises in prices to come--and more inflation.

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