First Hurdle

The chorused sighs of relief over the passage of the price-control bill last Friday almost qualified Washington for Chicago's nickname, "Windy City." After weary days of debate, several hundred Senators and Representatives sweated to finish the measure. With speed that shamed the dilatory arguments in Congress, the President issued the necessary Executive Order establishing an Office of Economic Stabilization with Justice Byrnes as its Director. Senator Barkley immediately said that Congress had done "a marvelous job."

As far as he went, the Senate Majority Leader was perfectly correct. Congress has passed almost exactly the bill which the President requested. A compromise diluted most of the bitterness in the farm bloc's demands for higher-than-ever food prices, and the bill specifically states that wages are not to be raised whenever the effect would be inflationary.

But the anti-inflation picture is still incomplete. Like a John Ford movie cut in two, the present bill is technically excellent but woefully inadequate. The experience of Britain and Canada proves conclusively that inflation cannot be prevented merely by controlling prices; restriction of purchasing power is also essential if black markets are to be effectively suppressed.

On this issue, the record of Congress is far worse than its tactics on price control. For seven long months the first wartime tax bill has languished in committees, and the House and Senate versions are so different that no speedy compromise is possible. Neither version contains a retail sales tax or a compulsory savings plan, either of which would pick the purchasing power bubble before it is even partially inflated.

Congress habitually resolves to make the next tax bill a tough one. Somehow, the next tax bill never turns out tough enough. If inflation is to be prevented, the cost of the war kept within reasonable limits, and a post-war deflationary collapse headed off, the tax burden must be closer to fifty billions than to the projected twenty-five billions. Congress has legislated on price control, but the nasty half of the job is yet to be accomplished.