Pressure Rising

Discussions last week which began with "Well, what should we do?" got lost in guesses and by-Gods. One of the most dubious guesses was the Administration's guess that it might be able to control prices by persuading people to save food, while it went ahead with its program of buying grain to feed Europe. Those were two birds flying in different directions which could not be brought down with the same stone.

The record of wheat prices in the past three months showed how one bird had flown. During July the price of wheat futures at Chicago rose from $2.12 in June to $2.35. Predictions of a bumper wheat crop had knocked the price off a little, but when reports of a bad corn crop came in, the wheat price soared again. The day the Paris conferees announced Europe's needs, it climbed to $2.66. Two weeks after Harry Truman announced the food-saving program, the price hit a high of $3.07.

During that time, the Government had purchased for export somewhere around 270 million bushels of grain. The President, a little hysterically, tried to make the grain speculators the villains (see BUSINESS). But there was no villain -- only the law of supply & demand.

The Government's plan to buy a total of 570 million bushels of U.S. grain for shipment had simply created an unbear able pressure.

That pressure, among others, lifted the gauge of inflation to a new high. This week, Interior Secretary Julius Krug described the situation in a report to the President. He said the U.S. had the resources to support the Marshall Plan (see Foreign Relations). But he added that the nation "cannot long underwrite the material deficits of other nations without serious impact upon its economy and its resources."

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