Controls for the Future

Yesterday the last controls on consumer goods went the way of most war measures, and few mourned them. They seemed to be an unnecessary restraint in what passes, these days, for peace time. And business has so far reacted intelligently to its refound freedom.

Praising commercial interests, Eisenhower pointed with sympathetic pride at the general price stability. Despite a rather large, though expected, jump in the cost of copper and coffee, initial price rises have been moderate. But some groups, led by the National Association of Manufacturers, want assurance of perpetual freedom. They oppose even the stand-by controls recommeded by the President's financial advisers.

Their opposition is based on two arguments. First they say that controls in general are useless, and deny the need for them even in wartime. N.A.M. chief Charles R. Sligh gave the Senate Banking and Currency Committee to believe that corporation taxes and like measures would keep a grip on the inflation spiral. Senator Capchart, no friend of government control, answered by saying that Congress would surely pass controls on "wages, prices, and rents in event of an all-out shooting war." And they are obviousy needed then. The Federal Reserve Board, which under normal conditions sways price trends by manipulating credit rates, acts too slowly and indirectly to cope with a wartime inflation. So the government, heeding the lessons of the World War II, is committed to a program of regulation in emergency.

At this point, the second string anti-control men start their case. Admitting that wartime controls are inevitable, they argue that Congress can start to enforce them after war begins. To give stand-by Powers to the president, they insist, would inhibit business by constantly threatening it with a sudden price freeze. They also claim that the decision to invoke price controls is too big for one man, and want Congress to do the deciding at the proper time.

But this reasoning bespeaks an unusual lack of confidence in the aims of the Republican Party. Surely this is one administration which will not try to tyrannize business or use controls as a power lever to gain "socialistic" ends. Business should be able to trust Eisenhower to apply the controls only in wartime or as a check on drastic inflation.

The country has seen in two World Wars that controls are necessary from the very first day--at the latest. Both times prices shot immediately to levels which sapped the country's financial strength before Congress could pass effective programs. Again in 1950, the Korean War started prices soaring, and inflation cheated the taxpayer before the legislators could act. With these examples, if Congress fails to pass a program that can check a war inflation before it starts, it will betray extreme financial myopia. Stand-by controls are safe and they are necessary.