Worse Ahead

Prices were going up.

The housewives knew it, the indexes confirmed it, and the Administration admitted openly that it could not stop them. Cried President Harry Truman last week: "The tools Congress has given us to curb inflation ... are not good enough to do this job as it should be done."

The reason, said Truman, was that "scores of special interests have ganged up together for the purpose of securing special short-run advantages for themselves." Truman was making partisan hay out of a half-truth. Some special interests (e.g., meat) had wangled concessions in the controls bill. But the truth was that the Administration's price-control program had never been designed to really freeze prices rigidly. By his sweeping charge, Truman was blaming somebody else for every penny rise which his own agencies were planning to allow.

Reluctant Yielding. A better name for the Administration's program would be "administered inflation." Controls, the controllers explain, are designed to yield reluctantly to inflationary pressures.

Last week the newest monthly index showed a climb of 0.6%, its biggest jump in months. Rents and food were up; so was clothing.

Government economists warned that more serious inflationary pressures were building up. "The crest of inflation is some distance away," admitted Economic Stabilizer Eric Johnston. By next year, defense spending will be flooding into the economy at a rate of $50 billion a year. At the same time, metal supplies of consumer-goods industries will be cut back to 50% of their pre-Korea level. By midsummer, thinks Defense Mobilizer Charles Wilson, all that money jingling in U.S. jeans and a reduced supply of consumer goods' will create a $10 to $20 billion "inflationary gap."

New Pinch. Raw-material costs are rising. Last week the nation's railroads asked for a 7% rise in freight rates. And in the area of wages, where the Administration has yielded with the least reluctance, the seventh postwar round is already in the making. The C.I.O. steelworkers were talking about pay increases and benefits up to 15^ and 20^ an hour.

Truman, who asked for a tax bill double the $5,691,000,000 that Congress gave him, thinks the new taxes are not high enough to combat inflation. But to the ordinary citizen, the new tax rates are just one more item of rising costs.

This week, employers began withholding an additional 2% of salaries and wages. Because of the new excise taxes, cigarettes rose i-c- a pack, whisky cost 26-c- to 70-c- more a fifth. Taxes had gone up on mechanical pencils, cigarette lighters, gasoline, new cars, electric dishwashers, lawnmowers and skis. Already pinched by higher taxes and higher prices, the U.S. public has every reason to expect that worse is yet to come.

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