National Affairs: Toot Suite

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The biggest news in Washington last week was that a House committee very nearly voted out a bill giving the President real wartime price controls. The bill lost by one vote—10 to 9. The man who almost succeeded in persuading the committee to meet the nation's crisis head-on was a tall, hunch-shouldered man in his 80th year — Bernard Baruch.

Glowering over his spectacles, Baruch arrived on Capitol Hill to give the Senate his recommendations for meeting the direst military crisis since Pearl Harbor. Adviser to Presidents and Congresses for more than a quarter of a century, he carried the outraged recollection that his counsel had too often been disregarded. In the past two years, Washington had brushed off his repeated advice that the U.S. get up off its hunkers and rearm itself. Many observers figured that Washington would go on brushing him off. Baruch, the ancient prophet, was out of date.

When he got to the capitol, Congressmen were debating Harry Truman's cautious program for partial mobilization

(TIME, July 31): it was as much as the President thought he needed—or as much as he thought he could get from Congress. But even for such controls as he asked, he seemed to be facing substantial opposition; some Republicans argued heatedly that his demands went beyond the necessities of the current crisis. Administration leaders anticipated a fight.

Then Baruch spoke in the high-ceilinged Senate caucus room before the Senate Banking & Currency Committee which was studying the President's proposed legislation. For three hours he testified, reading from a prepared statement, moving easily up & down the committee's table to catch their questions, waving a hearing aid in front of him like an antenna.

He thought the new tax bill should be at least twice $5 billion, that taxes should be "higher than a cat's back." As for the rest of the program—"There is one major fault which destroys much of its value. It does not go far enough."

Invitation to Inflation. Said Baruch: "Experience has taught us that when the Government steps into the market with such enormous demands requiring such quick priority, you must control all prices, including wages, rents, foods and other costs, eliminate profiteering and ration certain scarce essentials."

He demanded: "An overall ceiling across the entire economy, over all prices, wages, rents, fees and so on, with high enough taxes to prevent profiteering and to pay all defense costs, and an all-embracing, effective system of priorities."

Not only was the Truman program inadequate; it was dangerous, Baruch maintained. "Should this bill be enacted, without price control," he warned, "the Government may get what it wants, but with needless delay and ever-increasing prices. The public will be left to compete for the remainder—with the fattest pocketbook, not the greatest need, deciding who gets what is available. This bill, gentlemen, is an invitation to inflation . . .

"The gravest threats to the preservation of the American system today are not Government controls. They are military defeat abroad and further inflation at home."