Strike Control vs. Price Control

...Most economist* agree thst a satisfactory drive against inflation requires taxation as well a* price control Excessive war incomes exert prsssure upon prices which csn snd should he relieved in a large measure by taxation...

...But business and the farmers eventually win out...

...Do they know that the steel workers, steel management, and the stsel men who have gone to Washington from both the union and the companies, have done such a remarkable job that WPB is now talking of cut-backa in basic ingot production...

...Through the Little Steel Formula, wages were to rise fifteen per cent, to cover the cost of living increase which had occurred by September 1, 1942...

...I.abor must not strike for higher wages, but it is expected to bear cheerfully an increase in the normal tax rate from six ten per cent ia addition to t h e heavy surtax rates that it already • » » • • M the soroo time the war-eenipatts loophole, together wits) other tax loopholes, eoatkiiiT ContTsojsmaa w h o want tew and unfair taxes are ususlly also in f a v o r of allowing inflation to p r o - casd by not providing adequate pries and profit eentroia...

...The few crises w* hsve had because •f labor disputes have resulted from the failure of Congress snd business to keep their promises to labor...

...It can indeed he argued that wages increases are needed to reduce swollen war profits...

...2) Exceeeive war profit*- Profits before taxes have expanded enormously...

...no increase i a t o o normal tax rata of the persons I income lax above six nor c e n t; increases of tax rap** abovo t i e ttfiffff bracket of not taxable incosasv f o r tbxV s>bffte>msiit of tax revenue...

...It is a war-time technique of business to hold down wages by political ballyhoo...

...To prevent wartime labor d i s p u t e s over wages, we •soot have a four-cornered program relating to excess profits, taxes, wage* and prices...

...In other words, the War Production Board and the Army had made it perfectly plain to the steel workers that a short protest strike could have no ill-effects on the delivery of armament to the soldiers...

...la the case of the railroads, an Increase of ten per cent In pa* could easily be absorbed by the greatly expanded profits...

...Our war production has been fantastic: it has pumped war material to the ends of the earth as fast as we could build the ships to carry it, it has resulted in a plethora of aluminum, steel, copper, and what-not...

...The boys in the foxholes have supposedly gotten the idea that people back home are having lush pickings, drinking quarts of Scotch whisky, .and quitting work or striking whenever they please...

...ABOK'S promises of cooperation at the beginning of our participation in the war were sincere...

...Those who have tried to make wartime strikes and stoppages synonymous with treason are guilty of some of the most one-sided thinking that has ever been put forward in the name of "truth...

...3) Adequate l e g i s l a t i on for the renegotiation of war contracts and absorption of some of too excess profits through higher wages...

...These groups are now reaping the advantages of an inflation bloc in Congress, weaknesses in the excess profits tax, and the excessively regressive character of our Federal income tax rates...

...If the soldiers were kept informed sbout the sctusl ststs of slfsirs on the home front, they would see thst justice woald reside in linking wsges to the cost of living, not in the imposition of srhitrsry "sacrifice" merely for the sske of a Puritanism that must end by depressing civilian morsle...

...7QUALLY serious sre the regressive tendencies in *"* the tax changes proposed by Congress...

...Labor has not sabotaged the war by atrikes and demands for higher wages...

...It wouldn't have done the soldiers any good if the home folks had refused to drink orange juice or to eat three-course meal...

...There are good reasons for us to be suspicious of economic groups which take advantage of war conditions to fill their pockets...

...The only things needed to bridge the gap between soldier snd civilian worlds ars jast policies in Waahington, including a jaat news policy that will result ia truthful reporting of home front affaire to the boys in the foxholes...

...This is a prime example of a "government of men, not of law...

...The large labor unions are regarded as a serious menace to the wsr effort...

...Under-Secretary of War Patterson several weeks ago pointed out that millions of dollsrs of excess profits are being lost to the excess profits tax, due to the sixe of the wsr contracts and the limited effect of the tax...

...When John L. Ix-wia and the coal miners made trouble last spring, the soldiers weren't told that an inner-circle squabble in Washington was fundamentally to blame for dragging out the coal trvui"i "•*aic"|K in,i mr i<>ni double...

...The President needs vigorous support in his stand against Congresi on the matter of renegotiation...

...Although he may have exaggerated these dangers, they are great enough to warrrant an appreciable increase in taxation by Congre** in thi* session...

...This belief is not only prevalent at home, but has spread to the foreign fighting fronts, so that even the soldiers are now complaining about alleged labor racketeering in war time...

...If the soldiers will try to imagine what an eleventh-hour battle between Marshall snd Eisenhower over the Sicilian campaign could have done to our Mediterranean strategy they will get some inkling of the inner reality of the coal fight...

...ajjmieo...

...Do the soldiers know that 800,000 steel workers have stuck loyally to the job in spite of a rise in the cost of living far beyond what was expected when Phil Murray agreed to the "no-strike" formula' I don't know where the soldiers get their information...

...And who can blame them for threatening to counter lawless fore* majeure with the force majeure of a strike...

...Take our steel rate, for example...

...IF strikes develop which seriously impede war production, it will be due to three failures of business, farmers, and Congress...

...Use of the cost-plus basis in determining war contracts and the lack of adequate renegotiation legislation are largely responsible for the increases...

...Organised labor follows this rule...

...Secretary Morgenthau pointed out the dangers of inflation in his messages to the Wsy* snd Mssns Committee and the Senate Finance Committee last fall...

...Last year the nation produced some ninety billion dollars worth of consumers' goods in addition to virtually one hundred billion dollars worth of war material...

...After cooperation fails, the next step is fight for one's rights...

...Secretary Icke* battled with the War I.a-bor Board over the question of coal mine sovereignly, With Mr...

...In the early stages, when the scramble for labor begins, wages may rise faster than prices, at least for workers in war industries...

...If terrific aacrifices were necessary to sustain this volume of production, what civilian would not be willing to pull in his belt...

...Business wins out pri-mnrily because of its strategic position in the price-making process at a time when prices are undergoing rapid changes...

...Why aren't they getting the whole truth, a truth that would demonstrate the transcendent accomplishment of the American people...

...Profits after taxes were estimated at 8.5 billions in 1943—the highest on record...

...Do the soldiers realize that so much steel hss been made that the manufacture of some items for some civilian needs is sbout to be permitted...

...The Treasury states that increases occurred in spite of heavy additions to the corporation and excess profits tax rates...

...J) Closing of the major t a x loephslos...

...When labor considers that it has been forced to strike in wartime, it is pretty good evidence that the government itself is to blame...

...But he has messed up the problem of home front administration...

...There is a wide gsp betweeea the ten and a half billion increase thst Secretary Morgenthau recommended and the two billions that finally emerged from the Senate Finance Committee...

...While the President was busy on eversea* affairs...

...But just what did the stoppsges of Ohio steel workers amount to...

...Higher wages and longer hours lesult in increased total earnings...

...IT is perfectly true that many American* have been * living well while soldiers have been subsisting on C rations, foraged eggs and cocoa nut milk...

...they had been told, in effect, that ingot, slab and bloom stocks were in excess of what the war fabricating plants could use...

...The home front muddle has been mainly in Washington, and if the soldiers have a case it is against certain Congressmen, certain New Dealers, and certain bureaucratic representatives of big business...

...Instead of holding the line against further price inflation, ths cost of living hss risen twenty-Ave per cent above ths level of January 1, 1941...

...i m P % ' i i i ' i p i • ' s t e i d r s c y i i . t h e home f r o n t 1 1*m d o* tails most be worked out by the high contracting powers but t h e broad features can be sketched here...

...And the truth of the matter is that government itself has been utterly inept and tactless in its handling of the demands of miners, railroad and steel workers...

...A new covenant must bt mode with labor relating to these four matters If this covenant is kept, i t will guarantee the continuation of labe* peM* and w*M c o v e t s One.further...

...But if this idea has reached Naples, Algiers, and New Guinea, how did it get theret Why are the eoldiert being feji a elander...

...It wins also because, together with the farmers, it is usually able to "capture" important branches of the Federal Government...

...Inadequate price enforcement, profiteering by business, and the pressures of the inflstion bloc in Congress have all contributed to the rise...

...Acceptance of this formula was based on assurances from both business and Congress that prices and profits would not increase and that the rise in the cost of living would be limited to fifteen per cent...

...In the view of some, perhaps many, the home front is about to collapse because of labor disputes...

...Moreover, it is a "government of one man...

...And factory workers who would have been classified as "marginal" or "unemployable" in 1938 have kept the production lines going at a pitch far beyond that of 1929, or 1937...

...The following charge* may he made against them: (1) Inadequate price centre...

...Do the soldiers know about that...

...But what would the soldiers hsve civilians do...

...President Roosevelt has been a good war leader in most respects...

...But the rank and file of the people, including the rank and file of labor, have with few exceptions been backing the attack ever since Pearl Harbor...

...They include: ( 1 ) Adequate price control and adoption of s a b - sidy plans to aid in price control...

...Phil Murray and the steel workers hsd been informed that basic steel hsd been over-produced...

...In the ease of the steel industry, the profits of the companies could absorb auch sn increase in most instances...

...Neither of three promises hot been kept...

...3) Inefficient tear taswtten...

...In the case of the railroads a special board made a wage award...

...farther merinoes in corporation income and excess profits tax r a t e s ; not adovtiosu to taxatioa in this session of « engresa by I v e or « x billions...

...Gasoline and steel weren't available to the average civilian in any ponderable amounts, but food and clothing were...

...Wars provide great oppoi-tunities for shifts in the distribution of wealth...

...Price Control By William Withers A**oeiate 1'iufttmr ef Economic*, Queen* College IN recent months, the American people have become exceedingly etrike-eonscious, owing- to the successful wage-raising exploits of John t. Lewis and the attempts of railroad and steel workers to follow in his footsteps...

...In this effort it is immeasurably aided by the promotion of anti-strike attitudes and the woeful ignorance of most of us concerning current prices, wages and profits...

...Even this figure—provided by the United States Buresu of Labor Statistics—is thought by many to under its te the change in the price level since the outbreak of war...

...As a matter of fart, it would have done the soldiers harm, for it would have had a sapping effect on the health of home front workers...

...It is s natural tendency for those who sre denied the protection of the laws to resort to direct action...

...4) Definite recognition of the relstiensMp between wages and the cost of living to the extent of allowing s a g e s to rise to eover the increases which have orrnrred in l i v i ng c o s t s since January 1, 1941 IS LABOR UNPATRIOTIC...

...What Soldiers Don't Know OECRETARY of War Henry Stimson complains that the breach between soldiers and civilians is growing...

...The CIO Claims that the rise is 43 per cent...

...His method has been to appoint everlapping and competing boards and "czart," and the result is that no one knows whose word is final until the President himself, as Commander-in-chief, has intervened to settle matters...

...But during this period in which Americsn >var production was breaking new records, the civilian economy refused to collapse...

...They struck after U. S. Steel had announced the closing of the ingot-producing Penncoyd works near Philadelphia...

...Fed by "anonymous" warnings from Washington, persons whose own patriotism cannot be questioned are coming to identify "labor" as an entity that is willing to play fast and loose with our chances for quick success in the battles overseas...

...When the decision of a board of arbitration can be flouted, who can blame the railroad men for getting the idea that no machinery for the achievement of justice is available to them...

...Increase* In wages are paid out of profits before taxes...

...By John Chamberlain r~ | "*H ERE is a dangerous anti-labor mood growing f up in this country among groups that ought to know better...

...Certainly no union should interfere with critical war production even to prevent injustice...

...The men struck after four Republic Steel plants had shut down furnaces...

...But a double standard of reporting is obviously to blame for a lot of the anger in the foxholes...

...As the war progresses, inflation and excess profits divert the increased war income from workers to business and the farmers...

...Then Judge Vinson, the economic "stabilizer," stepped in to set the award aside...

...Farmers in their fifties, sixties and even their seventies have seen to it that no famine is threatening a nation at war...

...I.elmi, however, is generally unsuccessful in this struggle to benefit economically from war...

...I>ewis waiting in the wings and growing more and more impatient...