The Courier News from Blytheville, Arkansas on December 24, 1951 · Page 9
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The Courier News from Blytheville, Arkansas · Page 9

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Blytheville, Arkansas
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Monday, December 24, 1951
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Page 9
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MONDAY, DECEMBER 24, 1991 tL'l IHEVILXB (AMC.) OOOTHBR ?A01 Inflation Eased Off in 1951 After Big Start Prices Still Going Up, But Brakes AreOn By WILLIAM O. YARN' WASHINGTON, (AP)—Inflation's pinch on the public ,, pocketbook, which tightened Ijfiiat lightning pace after the first shot was fired in Korea, eased off in 1951. ' By year's end housewives watching the family budget weren't quite as concerned as they had been 12 months before. The brakes had been put on the rising cost of living. True, prices still ivere on the upgrade, but the pace hud been plowed. Living costs, as measured by the Bureau of Labor Statistics, hopped upward only about two per cent from the first of this year through November. This contrasted with an eight per cent jump from the Korean outbreak in June, 1950, through the rest of the year. Generally, throe major factors were credited In 1951 with check- Ing skyrocketing prices: - 1. Government controls applied for the first time with (he nation technically at peace. The big jest action was the general rfreeze of prices last Jan. 26, fol- Itiwed by numerous price orders that held Increases to a mini- mam. 2, Consumer resistance to buy- 1 fng as inflation moved the cost .of many goods above the average family income; and 3. A drop of raw material costs In many fields because of consumer resistance to purchasing? hlyh-prlced finished gorxls and because supply overtook de-ma nd. A speed-up in production after .shooting started In Korea hail boosted many Inventories far above normal. i Defense Spending Is Key • -Michael V. DiSalle, the government's chief price stabilizer, and other officials agreed the big test hinges - on the speed of defense spending. They said that if spending moves forward at an evenlj accelerating, pace, prices can bp held down. ; . At any rate, DiSalle said he is confident there will be no repiti- tion of the runaway inflation late .1950 that brought on the need j for direct controls this year. He said he believes the government's stabilization program can hold price ceilings "somewhere about their present "levels." " This program actually had Its beginning : with • the' Korean 'but- JUHreak. Prices started climbing and "5nongress began consideration of a defense production act in July, 1950. By- Sept, 8 It had become law. Truman Gets Control Power The act gave President Truman power to control prices, wages and materials. But It also contained a provision that voluntary controls should be tried before direct price controls were invoked. Through the' "Jail of 1950 the government set about trying to get voluntary agreements with industry not to raise prices. - 1 Mr. Truman chose DiSalle, then mayor of Toledo, Ohio, to become head of the new Office of Price Stabilization on Dec. 1, 1050 Di- Salle took office Dec. 12 and bsgan building an organization now numbering 12,000 employes. -'' Six days after he was sworn in, 'the first ceiling price regulation was Issued. This froze automobile prices at their Dec. 1 level and halted plans by the big auto manufacturers to raise prices. Voluntary Standards Tnfc next day ft set of voluntary , , . Michael V. I)lSal)e . . . Ihe bl? test hinges on the speed of defense spending ... to help the government hold the sued. Some major industries agreed price line. But the voluntary plan couldn't blanket the economy. By late January prices were still going up. On Jan. 23 the second price order was issued. This set hide prices back to their November. 1950. levels. " T onr.s later the government elec- rified the country by freezing most irlces at the highest levels they cached fronvDec. 19, 1950, through itablllittkm. fewoal Ffcue SUrtj OPS then w»» ready to embark on th» second phase. This entitled issuance of specific or tailored regulation* for many InduetriK during the spring and summer months. For others there Mtre temporary or interim regulations designed to correct inequities in prlce» under the general freeze. Borne of these orders brought slight, rollbacks. Only two months ago OPS entered the third and final phase—Issuance of tailored regulations In large numbers. These take specific problems of each industry into account in jetting ceilings. Whenever possible they fix dollars and cent* levels, but many call (or formula computation of prices. Committees of industry representative are consulted in writing the orders Congresa Is Blamed OPS officials said this third phasi should be well advanced by nex spring, completing the general sta bilization plan. They blame Con grass for a delay in getting tin third phase started. It was due tc begin last summer when the law makers engaged in lengthy debat over amendments to the control law. Thus wound up with some ma jnr charges as the Senate a n House overrode administration plee against amendments. The debate and changes prevent ed OPS from putting into effect o July 2 several of its major pric actions. These included the genera manufacturers' machinery, shoe an. 25. This general freeze was the irst step to halt the upward price iwcep. It was the (irst. phase of apparel, cotton textiles yarns These and orders fabrics affected stlon of the economy. WSgM. ' Stock Prkes Jump Livestock prices had jumped 2S ier cent from the Korean outbreak to Jan. 15. By -April 15 they had umpcd another 12 per cent. The [eneral freeze on Jan. 26 had frozen ceilings of meat packers who found ,hclr profits squeezed by rising cat:le prices. In May, OPS ordered a to per cent rollback in the prices slaughterers could pay for live cattle. Other reductions o( 4'i per cent each were scheduled for AUR. 1 and Sept, 1. Accompanying the last two cuts were to come reductions totaling about 10 cents a pound in beef prices to housewives, but these rollbacks never took pjace. OPS claimed the** orders aimed t price rollback*. It said Congress* eclaion to bar reductions coet con- umer* heavily. A particular tar- el of OPS Ire was the Capehart mendment. This compelled the ric* agency to allow manufactur- rs to take their pre-Korean prices nd add or subtract all increases decreases In costs through Jul> OPS had planned not'to allow In creases in labor costs alter last rtarch IS and to limit materials cost increases to Dec. 31, 1950 and March 18 cutoff, dates. It also dirtn 1 Igure on permitting any overhead cost Increases. Member* Differ DiSalle claimed the amendmen certainly meant -higher prices U consumers in months to come. Sen ator Capehart (R-Ind) and othe Congress members differed. The. claimed rollbacks could be effects under the amendment. In late lal OPS finally revised its price reguta tiorw to carry out thLs change the law. Although the controversy thai flared over thLs amendment was hot, the biggest battle of the year was over beef. That struck nearest the cost of living. In early spring DlEalle tagged the beef problem the decisive fight of control program. On the success of efforts to control beef prices, he said, hung success of the entire stabilization program—both prices and Congress also wiped out OPS' Read Courier News Classified in in : Word Battle Staged Represent!! lives of the bpe! dustry and DiSalle engaged running word battle over the The cattlemen contended controls would hamper production. They said production was the answer tn cheaper beef. DiSalle disagreed. He claimed lhat with all of the rollbacks beef still would be selling at about 125 per cent of parity — n price figured to fnve farmers n fair return for. what they tell iu relation to what they have to buy. Both sides took their battle to Conpri'ss in the bi^ mid-summer debate. The beef inrUiMry won out. The lawmakers amended the law to powfr to eontfol the Dumber of I cattle each *l»ught*rer could kill each month. OPS contended thla took away it* power to assure even distribution of meat and crippled 1U enforcement program *o as to give rise to black markets. Even after Congress killed the rollback*, cattle still didn't reach the market in slsable number* until late fall. Beef scarcities popped up In many areas. DtSalle vas bombarded with demands to abandon the beet control program. With White House backing, he held fast In November, market ings pickec up and beef became more plentiful but prices still remained high 700 Price ActEoru By the new year OPS will have Issued far more than 700 price ac tions of one kind or another, af feeling almost every segment of thi economy. By Dec. i, In 10 months of operation, more than 100 tailor ed regulations had been issued. As sistnnt OPS Director Edward P Phelps predicted this number woul reach 120 or more by early January And, by late spring, he said th number will be between 250 an 300, In the last weeks of the yea OPS Vjcgan the task of cutting bac 1 imd cattle and retail beef prices. The first 10 per cent cut was already In effe?t. nullify the scheduled Aug. Sept. 1 reductions in live .some ceiling prices nearer to leve" of market selling prices. Many tiie.se prices had Kone down becnus of declines in the cost of raw ma t?ri:'!s and increasing consumer re ::M:niLe against high prices, DiSaile explained the big aim w to reduce "some unrealistic cei injis to assure OPS could contr iairly and realistically in the eve: (hose commodities threaten to ris excessively in the future." JOYS OFVTHE SEASOK AND EVERY HAPPINESS IN THE NEW YEAR Alvin Hardy FURNITURE CO. merry Christmas Our wish for you, our friends/ I* that gentle Bells of Christmas echo throughout your homo all through this wondrous Holiday Season. May this be your... . Merriest Christmasl Sears Catalog Order Office Blyihevilie, Ark. standards for price control was is- At this foyouf Kuoa year, when everyday cares ire overshadowed by good fellowship and kind thoughts, we attend to our many friends onr sincerest holiday greetings. A Merry ChrisbnM and a very Happy New Ye*r1 Sherwin-Williams Co. PEACE ON EARTH There's so much more than expensive gifts and festive parties to make a Christmas merry! More than anything, it is the warmth and cheer of neighbors and friends who join in wishing you the hearty, sincere greetings of the Season. It is the spirit of brotherhood expressed by the Day itself . . . the hopes and aspirations of mankind for peace on earth, unto all men good will -- to which we would like to add our best wishes for a very Merry Christmas! Goodyear Service Store 410 W. Main Ph. 2492

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