THE NOME NUGGET
Published Monday, Wednesday and Friday by The
NOME PUBLISHING CO.
Nome. Alaska
Telephone: Main 125 P. O. Box 613
$1.50 PER MONTH $16.00 A YEAR
W. A. and EMILY BOUCHER.Editors
Entered as second class matter October 14, 1943, at the postoffice at
Nome, Alaska, under the Act of March 3, 1879.
Friday, May 17, 1946.
HIGHER PRICES
JT IS NOW acknowledged, even by those charged with
the task of keeping prices down, that it is sometimes
more important to get production than to hold prices
at fixed levels.
OPA Administrator Chester Bowles, although insisting
that price increases should be granted “very sparingly”
has gone on record with the statement that price con
trols should not stand in the way of higher production.
Moreover, he has promised greatest possible speed in
the handling of current and future price adjustment
requests.
Thus the theory that low prices can be set and held
in the face of rising labor costs and before mass pro
duction is achieved is beginning to give way before the
practical reality that manufacturers, however great
their sympathy with the low price ideal, owe a first
duty to themselves—to stay out of the ‘red’. They can
not be expected to produce goods without hope of
profit—or, at the very least, breaking even.
President Truman has, himself, appraised the intim
ate relationship between prices and production. “Pro
duction”, the President declared recently, is our salva
tion. Production is the basis of high wages and pro
fits and high standards of living for us all. Production
will do away with the necessity for government con
trols.”
Mr. Truman’s statement also recognized more clearly
than before the inextricable relationship between prices
and wages. It recognized that price control cannot be
retained without at least some measure of wage control.
Originally, OPA was set up to prevent soaring prices
which would have been inevitable durfng the war while
production of civilian goods was curtailed and demand
far exceeded the supply. By and large, it did a very good
job. Price levels in the United States rose less during
World War II than in the preceding conflict in spite of
terrific pressure.
During the war, however, costs in the form of wages
and services also were controlled. Now controls over
wages and services were also controlled, bmbmbmbm
wages and services have been relaxed. Indeed, wage
increases have been encouraged, with result that man
ufacturers’ costs since V-J day have gone up and up.
Present price controls are in some cases so muddled
that it actually is permissible to sell a piece of machin
ery for one price if used in one industry but at a higher
figure if used in another. The same applies to com
modities. •
Such inconsistencies are bound to work to the dis
advantage of industries which are not allowed to pay
the higher prices for the goods they need. With costs
rising faster than production, manufecturers cannot
be blamed for doing the best they can; that is, for sell
ing for the highest return which the law allows.
The first real break in the price line came with the
settlement of the steel strike. In granting the 18 Ms cent
per hour wage increase to steel workers recommended
by President Truman, steel producers were themselves
granted a price increase on steel averaging five dollars
per ton.
The boost in steel prices will be felt all the way
down the line in steel fabricating and by ultimate steel
users. Every steel user, if OPA really intends to elim
inate price impediments to increase production, now
ft* MtVepTOOCAT^ !
— — i
will be in line for price increases for his own products.
There are at least three other major fields where
price increases soon may be expected. These are the
fields of building materials, pulp and paper, and tex
tiles. Another serious question is how long nonferrous
metal production can be held up at present prices.
With acute shortages looming in all these groups,
OPA is now being urged to adopt a bolder attitude in
granting incentive price increases, wherever an indus
try can demonstrate that higher prices actually would
result in larger production.
Following the increase in steel prices, manufactur
ers of builders’ hardware and related items already
have been granted a price increase of ten per cent over
prewar levels.
The adjustment is defined as a reconversion increase,
the Office of Price Administration said, because pro
duction of these articles was“greatly curtailed” during
the war. The rise over October 1, 1941, prices was
allowed, it was stated, to compensate in part for in
creases in the cost of labor and materials since that,
time.
i
This ruling superseded an interim increase of ten
per cent granted last fall to manufacturers of certain
low and medium priced hardware items.
So far so good. BUT, ond it is a big but, OPA accom
panied the authorization for manufacturers price in
creases with another order restricting corresponding
price increases for wholesalers and retailers.
i
OPA stated that studies showed that the price in
i crease could be absorbed by jobbers and retailers and
i still return them gross margins realized in 1941, with!
1 enough room to cover any advances in operating ex- j
penses since 1944.
: j
This was softened somewhat by a promise that a re
view of the effect of the action on the distribution lev
i would be made “should data and factors not avail
j able now indicate a re-examination is necessary.” It was
I also stated that area adjustments would be made if stud
jies show that the patter of markups for sellers in any!
particular area “varies considerably” from the general
pattern.
j !
| No matter what the wording, the fact still remains!
that, although there has been some change of heart'
on the subject of getting production through incentive;
price increases for manufacturers, OPA is in no mood
to see price increases passed on to consumers. The
squeeze, in simple arithmetic, is being shifted from the
manufacturer to the wholesaler and retailer. In this
, country, that is. ^American Kvnnrtpr^1
Washington
News Letter
Interior Appropriations Bill
The Kenai Peninsula and the
Fortymile country will be opened
up to development of agriculture
and mining through road funds
approved by the House Approp
riations Committee in reporting
the 1947 Interior Department Ap
propriations bill to the House.
The committee allowed $600,0)p0
for neyv construction by the Al
aska Road Commission of a road
from Kenai Lake to Homer and
an appropriation of $37,500 fdf
surveying this road. Delegate
Bartlett, in applauding the appro
priation, stated on the floor of
the House that construction of
the road would enable “farmers
of that very promising agricul
tural area to get their products
to market at a reasonable cost
for the first time. It will fill a
great need.”
Delegate Bartlett also praised
the recommendation by the com
mittee of money for building a
road from Eagle to Tanacross
which would open one of the
oldest gold-mining areas of Al
aska. Construction funds were
approved for this road by the
committee in the amount of $420.-*
000 with an additional appropria
tion for survey work on this road
in the amount of $34,500.
The appropriation of the funds
for new construction and surveys
is hampered by a provision insert
ed in the bill stipulating contrib
utions by the Territory of one
dollar for every three dollars
spent by the federal government.
Delegate Bartlett, believing the
provision would be crippling
Alaska, has vigorously protested'
the provision and has offered an
amendment to strike it from the
bill, stating that the Legislature
has always contributed road funds
in proportion to federal contribu
tions in excess of contribution*
from several states, and has dont^
so according to its capacity.
Funds for hte Alaska Native
Service in the amount of $3,197.
308 represent a consolidation of
money previously under separate
items for education, medical re
lief and the reindeer service. The
committee highly praised the w&k
of Don C. Foster, general superin
tendent of the Alaska Native Ser
vice, in its report on the bill, as
being “particularly well qualified
to perform hte duties of his
fice ... he is doing so in an
exceptionally fine way, and mem
bers who know him have con
fidence that he will continue to
reflect credit upon himself and
the service.”
The Minfield Home near Jun
eau and its founder, Minnie Field
were especially commended by
the committee which urged that
the Indian Bureau extend aid an^
assistance to the orphanage so
that “ this splendid institution
will continue to be maintained
permanently on an efficient bas
is.”
Believing that veterans and
others desiring to homestead in
Alaska “should have the benefit
of prior investigations by quali
fied personnel”, the committee r^i
commended an appropriation of
$50,000 for the General Land Of
fice for surveys of areas in the
Territory which are suitable for
settlement.
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