Trainman News

Trouble Brews With Weaker Controls Law

WASHINGTON - Wage and price "control" extension amendments, such as they were, were signed into law in the closing hours of June 30, expiration date of the old controls, and anything but good news was seen in the offing.

Prices were expected to rise under the weakened controls and other trouble was brewing as result of changes wrought by the Defense Production Act amendments.

President Truman, who had sought a two-year extension of controls and strengthening of them by knocking out loopholes in price ceiling provisions, reluctantly signed the bill. The new amendments actually extend "controls" until April 30, 1953, and the price ceilings are relaxed instead of being tightened.

The new controls bill is the target of every favor-seeking lobby of the special interests," declared President Truman.

He said the new law "weakens our ability to hold down prices and stabilize our economy. At a time when our defense production is still expanding and necessarily contributing to inflationary pressures, the Congress has weakened price controls, has limited the effectiveness of wage controls, has invited widespread abandonment of rent control, and has virtually cancelled selective credit controls.

"I asked the Congress to strengthen our stabilization machinery and remove some of the built-in inflationary features like the Capehart amendment. But instead the Congress has moved in the other direction."

The present Wage Stabilization Board is abolished July 29 and in its place a new tripartite board is set up with four members each from labor, industry and the public, but all must be OK'd by the Senate.

The necessity of Senate approval of appointments, plus the fact that the new board will lack authority to handle disputes and is placed under the "supervision and direction" of the economic stabilizer, brought rumblings that AFL and CIO officials would boycott the board.

Removed from price controls were fruits and vegetables-- fresh, frozen or canned--which represent approximately 11 per cent of the average family's food budget, and rent controls were extended only until Sept. 30, 1952, except in "critical" areas, where they would die next April 30.

Asks T-H Injunction

The bill contained a rider calling on the President to invoke an injunction under the Taft-Hartley Act in the steel dispute-- action which the President has declared many times would be "grossly unfair" to do.

As result of the new amendments, the government lacks authority to impose controls on installment buying and bank credit, except on new homes.

There will be no immediate change in Regulation X, which sets minimum cash down payments for home purchases.

Food wholesalers and retailers are guaranteed pre-Korea profits, and advantages of the Capehart Amendment are extended to processors of farm commodities, including milk and other dairy products.

The Office of Price Stabilization is not permitted to testify in behalf of the public when common carriers apply to Inter-State Commerce Commission for rate hikes, and OPS also is barred from fixing ceilings below any state minimum sales price laws now in effect, including milk prices. The courts are permitted to override OPS rulings.

Wage controls ended immediately for farm workers, engineers, architects, certified public accountants and others earning less than $1 an hour.