Since last May, ceilings have been set on nearly all commodities, rents services, except the exempted farm products. Installment buying, for example, has been effectively controlled.
Wages in certain key industries have been stabilized on the basis of the present cost of living.
But it is obvious to all of us that if the cost of food continues to go up, as it is doing at present, the wage earner, particularly in the lower brackets, will have a right to an increase in his wages. I think that would be essential justice and a practical necessity.
Our experience with the control of other prices during the past few months has brought out one important fact—the rising cost of living can be controlled, providing that all elements making up the cost of living are controlled at the same time. I think that also is an essential justice and a practical necessity. We know that parity prices for farm products not now controlled will not put up the cost of living more than a very small amount; but we also know that if we must go up to an average of 116 percent of parity for food and other farm products—which is necessary at present under the Emergency Price Control Act before we can control all farm prices—the cost of living will get well out of hand. We are face to face with this danger today. Let us meet it and remove it.
I realize that it may seem out of proportion to you to be over- stressing these economic problems at a time like this, when we are all deeply concerned about the news from far distant fields of battle. But I give you the solemn assurance that failure to solve this problem here at home—and to solve it now—will make more difficult the winning of this war.
If the vicious spiral of inflation ever gets under way, the whole economic system will stagger. Prices and wages will go up so rapidly that the entire production program will be endangered. The cost of the war, paid by taxpayers, will jump beyond all present calculations. It will mean an uncontrollable rise in prices and in wages, which can result in raising the overall cost of living as high as another 20 percent soon. That would mean that the purchasing power of every dollar that you have in your pay envelope, or in the bank, or included in your insurance policy or your pension, would be reduced to about eighty centsą worth. I need not tell you that this would have a demoralizing effect on our people, soldiers and civilians alike.
Overall stabilization of prices, and salaries, wages and profits is necessary to the continued increasing production of planes and tanks and ships and guns.
In my message to Congress today, I have said that this must be done quickly. If we wait for two or three or four or six months it may well be too late.
I have told the Congress that the administration cannot hold the actual cost of food and clothing down to the present level beyond October first.
Therefore, I have asked the Congress to pass legislation under which the President would be specifically authorized to stabilize the cost of living, including the price of all farm commodities. The purpose should be to hold farm prices at parity, or at levels of a recent date, whichever is higher. The purpose should also be to keep wages at a point stabilized with today's cost of living. Both must be regulated at the same time; and neither one of them can or should be regulated without the other.