Squeezes and Subsidies

Biggest victim of U.S. price-fixing is the huge and highly complicated business of feeding the people. This is the only industry whose major raw-material costs have been left completely out of control (except as the Government can keep the prices of a few items down by threatening to unload some of its surplus holdings). With selling prices tied tight and costs free to rise, food processors, wholesalers, brokers and retailers have been squeezed against OPA ceilings.

Biggest problem for Washington is whether to relieve the food business by boosting price ceilings or by holding prices down with subsidies. Washington has tried both: ceilings were punctured for canned fruit; subsidies were sought (but not yet finagled) for canned vegetables; meat subsidies were arranged by the Agricultural Marketing Administration to help keep small packers alive.

Biggest fight is brewing between OPA and food businessmen. OPA sees subsidies as the main hope for salvation of its price ceilings; business, though aware of the importance of control, sees less danger in common-sense ceiling adjustments than in the possibly political administration of subsidy payments.

Biggest question is where to get the money for price-control subsidies. So far Congress has refused to vote any, though it did let Jesse Jones use RFC money for "transportation subsidies" by which the Government pays the extra cost of shipping coal, gas & oil, sugar, by rail.

Even that billion-dollar till-tapper Jesse Jones knows there is not enough money lying around loose to take the squeeze off the whole food business. Last week he began scouting around Congress to test the chances of an open-faced subsidy bill. Washington guesses the annual cost of subsidies at $500,000,000 to $2,000,000,000. For the first three months of the new fiscal year OPA unofficially thinks just under $300,000,000 will be needed. But nobody knows how fast the need for subsidies will snowball as more and more costs slip out of line.

This file is automatically generated by a robot program, so reader's discretion is required.