Statement on Signing the Emergency Price Control Act.

The Emergency Price Control Act of 1942 is an important Weapon in our armory against the onslaught of the Axis powers.

Nothing could better serve the purposes of our enemies than that we should become the victims of inflation. The total effort needed for victory means, of course, increasing sacrifices from each of us, as an ever larger portion of our goods and our labor is devoted to the production of ships, tanks, planes, and guns. Effective price control will insure that these sacrifices are equitably distributed.

The Act, taken all in all, is a workable one. It accomplishes the fundamental objectives of setting up a single Administrator, and empowering him to establish maximum prices and rents over a broad field, to prohibit related speculative and manipulative practices, and to buy and sell commodities in order to obtain the maximum production. To make price and rent control effective, the Administrator is given adequate powers to license persons subject to the Act, to investigate and enjoin attempted violations, and to bring about the commencement of criminal proceedings against violators. Civil suits for treble damages by private persons provide an additional enforcement tool.

But a price control measure must fall far short of being a democratic instrument if it fails to surround the individual with safeguards against ill-considered or arbitrary action. This Act, while granting the Administrator broad powers, imposes upon him a responsibility of equal breadth for fair play. He must, so far as is practicable, consult with industry members before issuing price regulations, and must accompany each such regulation by a statement of the considerations upon which it is based. The provisions for adjustment assure flexibility in administration. Persons adversely affected by an order have a speedy and effective remedy in the Emergency Court of Appeals. The Administrator may proceed for the revocation of a license only through the courts. Finally, the Administrator is required to transmit quarterly progress reports to the Congress.

The farm program which has been developed since 1933 has set parity prices and income as a goal. There is nothing in this Act to prevent farmers receiving parity or a fair return. But I feel that most farmers realize that when farm prices go much above parity, danger is ahead. One of the best ways of avoiding excessive price rises, of course, is abundant production. And I hope agricultural prices can be maintained at such level as to give farmers a fair return for increasing production.

In giving my approval to this legislation, I am acting with the understanding, confirmed by Congressional leaders, that there is nothing contained therein which can be construed as a limitation upon the existing powers of governmental agencies, such as the Commodity Credit Corporation, to make sales of agricultural commodities in the normal conduct of their operations. In my Message to the Congress on August 25, 1941, disapproving the bill H. R. 5300, I pointed out the extreme disadvantages of any action designed to peg prices through the arbitrary withholding of Government-owned stocks from the normal channels of trade and commerce. I further pointed out that the Commodity Credit Corporation should be free to dispose of commodities acquired under its programs in an orderly manner, for otherwise it will be impossible to maintain an ever-normal granary, to protect farmers against surpluses and consumers against scarcity; and that to restrict the authority of this corporation would greatly increase its losses, nullify the effectiveness of existing programs, and by breaking faith with consumers be inconsistent with our present price control efforts.

I also should like to call attention to the fact that I am requesting the departments of the Government possessing commodities to make such commodities available to other departments in order to aid our war effort. This request, primarily, will affect the cotton stocks of the Commodity Credit Corporation and will permit such stocks to be utilized, directly or by exchange, in the production of war goods. Such transfers will be in addition to the quantities which are now available for sale. The request will also include grain and other commodities which may be needed by the departments concerned.

The enactment of price control legislation does not mean that the battle against inflation has been won. I have doubts as to the wisdom and adequacy of certain sections of the Act, and amendments to it may become necessary as we move ahead. Moreover, price control legislation alone cannot successfully combat inflation. To do that, an adequate tax and fiscal program, a broad savings program, a sound production program, and an effective priorities and rationing program, are all needed.

Finally, all bulwarks against inflation must fail, unless all of us—the businessman, the worker, the farmer, and the consumer —are determined to make those bulwarks hold fast. In the last analysis, as Woodrow Wilson said, "The best form of efficiency is the spontaneous cooperation of a free people."