the general level is nowhere halted. All business is done in anticipation of the fact that in a few months prices will be higher.

By imposing a general ceiling, however (and the people are ready to accept a general ceiling, are psychologically prepared to make any sacrifices that may be necessary in order to win the war), the general price level is brought to a definite halt and the entire country is put on notice that prices will not be allowed to rise above this ceiling. Then the people will know what the law is. Immediately you turn down the heat that drives buyers out on purchasing sprees-they can put off buying knowing that prices aren't going through the roof. Speculation is made more risky and the premium is removed from the hoarding of materials.

Let me point out, Mr. Chairman, that inflation, which the Senator from Ohio was talking about preventing, does not come about because of selected commodity price rises. Inflation is the product of a general price-level run-away, and we must call a halt to the rising general price level somewhere if inflation is to be prevented.

It is an elementary fact that the price of a commodity cannot be held below a ceiling unless the components of that commodity are likewise subject to ceiling control. No matter how much a price administrator might fume and fulminate, he could not hold down the price of automobiles unless he also held down the cost of steel in the motor, the tin in the body, the plastic, the nickel, the upholstery, and the wages of the labor which produces it.

A ceiling cannot be held upon the price of a commodity unless a ceiling is held upon the cost of the commodity. To attempt to do so would be like trying to impound the water of a stream by building an earthen dam only part way across it. The piecemeal method of price control is not only an ineffective way to control inflation-it is unfair. It would not be fair to place a ceiling over wages but leave the wage earner's cost of living free to skyrocket. Obviously, it would not be fair or workable to place a ceiling over the price of a producer's commodity but give him no safeguard as to the cost of that commodity. It would be equally unfair to place a ceiling over the price of a farmer's commodity, which represents his wage, but leave profits, wages, and the prices of things which the farmer must buy, free to rise. And the greatest injustice of all would be practiced upon the men in uniform, who must fight and win our war, if we allow everyone who stays at home to reap selfish gain and profit out of the war.

Senator BROWN. I want to ask you one thing: Were your amendments in the House in the form of substitutes to specific sections of the bill, or to the whole bill?

Representative GORE. It was in the form of a substitute bill. I do. not think you could amend piecemeal.

Senator TAFT. I think that bill ought to be embodied in our record. Senator BROWN. About how many pages does that bill consist of? Representative GORE. It is about the length of your bill.

Senator BROWN. I think it would be well to have your bill made a part of our record. The committee reporter will make it a part of the record.

(H. R. 6086 is here made a part of the hearing:)

[H. R. 6086, 77th Cong., 1st sess.]

A BILL To protect the national safety and security from the consequences of price and credit inflation, and for other purposes

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

TITLE I-SHORT TITLE, PURPOSES OF ACT, DEFINITIONS, AND OFFICE OF INFLATION

CONTROL

SHORT TITLE

SECTION 1. This Act may be cited as the Emergency Inflation Control Act.

PURPOSES OF ACT

SEC. 2. It is hereby declared that it is in the interest of the national defense and security and purposes of this Act are (a) to preserve the value of the national currency against the consequencies of price and credit inflation; (b) to stabilize prices, wages, rents, and salaries and to prevent speculative, unwarranted, and abnormal increases therein; (c) to prevent economic disturbances, labor disputes, burdens upon interstate and foreign commerce, interference with the effective use of the Nation's resources for defense, and impairment of national unity and morale, which would result from unwarranted increases in prices, wages, rents, salaries, and the cost of living; (d) to eliminate and prevent profiteering, hoarding, manipulation, speculation, and other disruptive practices resulting from abnormal market conditions or scarcities caused by or contributing to the national emergency; (e) to prevent prospects of increases in prices, rents, wages, and salaries from encouraging the accumulation and withholding of materials needed for national defense, and from impeding long-term commitments for production; (f) to assure that defense appropriations are not dissipated by excessive prices, wages, and salaries; (g) to obtain the maximum necessary production without undue profits to low-cost producers; (h) to protect persons with relatively fixed incomes, investors, and persons dependent on life insurance, annuities, and pensions, from undue impairment of their standard of living; (i) to prevent a post-emergency collapse of values, and the reappearance of price and cost disparities for farmers and other primary producers; and (k) to provide procedures for administration and review which will fairly protect the interests of those subject to this Act, without endangering the dominant public interest in the accomplishment of the foregoing purposes.

DEFINITIONS

SEC. 3. For the purposes of this Act

(a) “Person” means an individual, partnership, association, corporation, business trust, or any organized group of persons, or any receiver, trustee, or other legal representative of any of the foregoing, and includes the United States, any State or political subdivision thereof, or any Territory, District, or possession of the United States.

(b) "Article" means any article, product, material, or commodity.

(c) "Services" means any service, operation, or function performed otherwise than as an employee by a person (other than a State or political subdivision thereof) for any other person for compensation.

(d) "Labor" means any function performed by an individual as an employee of a person other than a State or political subdivision thereof.

(e) An article shall be deemed the "same" article as another article if it is identical in every respect with such other article.

(f) An article shall be deemed "similar" to another article if it is not the same article but is an article of the same kind and of the same or substantially the same quality as such other article.

(g) An article shall be deemed a "new" article if neither the same article nor a similar article was sold at wholesale during the base period.

(h) Services shall be deemed the "same" services as other services if they consist of the same or substantially the same operations or functions as such other services.

(i) Services shall be deemed "new" services if the same services were not performed during the base period.

(j) Labor shall be deemed the "same" labor as other labor if it consists of the same or substantially the same functions and duties as such other labor.

(k) Labor shall be deemed "new" labor if the same labor was not performed during the base period.

(1) "Dwelling accommodations" means living quarters rented or leased for the residence of one or more people.

(m) "Sale" means any disposition, exchange, lease, or other transfer, or any contract to do any of the foregoing, and "sell", "selling", "seller", "buy", and "buyer", shall be construed accordingly.

(n) "Sale at wholesale" of an article means (1) any sale of such article for resale by the buyer, or (2) in the case of a sale by the manufacturer, producer, or importer of such article for consumption or use by the buyer, such sale by the manufacturer, producer, or importer; except that wherever specific reference is made to a "sale at wholesale of an agricultural commodity", such sale shall be deemed to refer only to a sale of such commodity by the farmer who produced such commodity.

(o) "Price" means the consideration received or receivable in connection with the sale of an article or for the performance of services.

(p) "Wage" means the rate of consideration received or receivable for the performance of labor, whether in the form of wages, salary, or any other form. (q) "Rent" means (1) the consideration received or receivable for the lease of dwelling accommodations, or (2) the making of a lease contract for dwelling accommodations.

(r) "Ceiling" means the maximum price for which an article may be sold or which may be received for the performance of services, or the maximum wage which may be paid for labor, or the maximum rent for dwelling accommodations. (s) "Agricultural commodity" includes only an agricultural commodity in the form in which it is customarily marketed by farmers.

(t) "Base period" means the period November 24, 1941, to November 29, 1941, both inclusive.

(11) "Comparable" means substantially the same real, utility, and neighborhood value.

(v) "Administrator" means the Administrator of the Office of Inflation Control created by section 4 of this Act.

ADMINISTRATOR OF OFFICE OF INFLATION CONTROL

SEC. 4. (a) There is hereby created in the Executive Office of the President an Office of Inflation Control, which shall be under the direction of an Administrator, to be known as the Administrator of the Office of Inflation Control (in this Act referred to as the "Administrator"). The Administrator shall be appointed by the President, by and with the advice and consent of the Senate, and receive compensation at the rate of $10,000 a year.

(b) The Administrator may establish and utilize such advisory, regional, local, industry, or other groups or agencies, and utilize such voluntary and uncompensated service, as may from time to time be needed. The Administrator shall give due consideration to the recommendations of such groups, committees, or other agencies appointed under this section, and he shall utilize, insofar as practicable, local agencies to the end that compliance with the Act may be effectuuated.

(c) The Administrator may, subject to the civil-service laws, appoint such employees as he deems necessary in order to carry out his functions and duties under this Act, and shall fix their compensation in accordance with the Classification Act of 1923, as amended. Attorneys appointed under this section may appear for and represent the Administrator in any case in any court. In the appointment, selection, classification, and promotion of officers and employees of the Office of Inflation Control, no political test or qualification shall be permitted or given consideration, but all such appointments and promotions shall be given and made on the basis of merit and efficiency.

(d) The principal office of the Administrator shall be in the District of Columbia, but he or his duly authorized representative may exercise any or all of his powers in any place.

(e) The Administrator shall submit to Congress a quarterly report covering his activities for the preceding quarter and including such information and data, and recommendations with respect to matters covered by this Act, as he may find advisable.

TITLE II-PRICE, RENT, AND WAGE CEILINGS

PROHIBITED ACTS

SEC. 201. (a) It shall be unlawful, regardless of any contract, agreement, or other obligation, for any person knowingly to sell or deliver, or to buy or accept delivery of, any article at a price in excess of the ceiling applicable to such sale.

(b) It shall be unlawful, regardless of any contract, agreement, or other obligation, for any person knowingly to receive or pay, or to enter into any contract, agreement, or other obligation under which he is entitled or required, or under which he purports to be entitled or required, to receive or pay, for the performance of any services a price in excess of the ceiling applicable to such services.

(c) It shall be unlawful, regardless of any contract, agreement, or other obligation, for any person knowingly to pay for any labor a wage in excess of the ceiling applicable in respect of such labor.

(d) It shall be unlawful, regardless of any contract, agreement, or other obligation, for any person knowingly to pay or receive for dwelling accommodations, or enter into contract to pay or by which he is entitled to receive for dwelling accommodations, rent in excess of the ceiling applicable to such rent for such dwelling accommodations.

CEILINGS APPLICABLE TO SALES OF ARTICLES

SEC. 202. (a) Except as provided in subsection (b) and (c) and section 206, the ceiling applicable to the sale of an article by any person shall be—

(1) in case the sale is at wholesale and the article is the same article as an article sold at wholesale by such person during the base period, the lowest price at which it was so sold by such person during the base period; (2) in case the sale is at wholesale and the article is not the same article as an article sold at wholesale by such person during the base period, but is similar to an article so sold by such person during the base period, the lowest price at which such similar article was so sold by such person during the base period;

(3) in case the sale is at wholesale and the article is not the same article as, nor an article similar to, an article sold at wholesale by such person during the base period, the lowest price at which the same article was regularly so sold by any other person during the base period, or if the same article was not regularly so sold by any other person during the base period, the lowest price at which a similar article was regularly so sold by any other person during the base period;

(4) in the case of any article to the sale of which paragraph (1), (2), or (3) is applicable, such ceiling as the Administrator may prescribe pursuant to section 207. Any such ceiling so prescribed shall be in lieu of the ceiling applicable under such paragraph; and

(5) in the case of a new article, and in the case of any article to the sale of which paragraph (1), (2), (3), or (4) is not applicable, such ceiling as the Administrator may prescribe pursuant to section 207.

(b) Wherever reference is made in subsection (a) to the lowest price at which the same article or a similar article was sold during the base period, such price shall in no event be deemed to exceed the ceiling or maximum price, if any, in effect with respect to such same article or similar article under any regulation or order of the Administrator of the Office of Price Administration and Civilian Supply.

(c) The ceiling applicable to the sale at wholesale of an agricultural commodify shall in no case be less than the parity price therefor, as determined and published by the Secretary of Agriculture in accordance with other provisions of law.

CEILINGS APPLICABLE TO SERVICES

SEO. 203. (a) Except as provided in subsection (b) and section 206, the ceiling applicable to services performed by any person shall be

(1) in case such services are the same services as services performed by such person during the base period, the lowest price for which such services were so performed by such person during the base period; and

(2) in case such services are not the same services as services performed by such person during the base period (or in case such person did not perform any services during the base period), the lowest price for which the same services were regularly performed by any other person within the same county or parish, or within the same State if there be no such other person within the same county or parish, during the pase period.

(3) in the case of any services to which paragraph (1) or (2) is applicable, such ceiling as the Administrator may prescribe pursuant to section 207. The ceiling so prescribed shall be in lieu of the ceiling applicable to such services under such paragraph; and

(4) in the case of new services and in the case of services to which paragraph (1), (2), or (3) is not applicable, such ceiling as the Administrator may prescribe pursuant to section 207.

(b) Whenever reference is made in subsection (2) to the lowest price for which services were performed during the base period, such price shall in no case be deemed to exceed the ceiling or maximum price, if any, in effect with respect to such services under any regulation or order of the Administrator of the Office of Price Administration and Civilian Supply.

CEILINGS APPLICABLE TO WAGES AND SALARIES

SEC. 204. (a) Except as provided in subsection (b) and section 206, the ceiling applicable in respect of labor performed by an individual shall be—

(1) in case such labor is the same labor as labor performed, whether or not by him, for his employer during the base period, the highest wage paid by his employer during the base period, at the place of employment where such individual is employed, for the same labor to an employee with the same seniority rights and length of service;

(2) in case the same labor was not performed either by him or any other employee, for his employer during the base period, at the place of employment where such individual is employed, the highest wage paid for the same labor by any other employer within the same county or parish, or within the same State, if there be no such employer within the same county or parish, during the base period to an employee with the same seniority rights and length of service;

(3) in the case of any labor in respect of which paragraph (1) or (2) is applicable, such ceiling as the Administrator may prescribe pursuant to section 207. Any such ceiling so prescribed shall be in lieu of the ceiling applicable in respect of such labor under such paragraph; and

(4) in case such labor is new labor, and in the case of labor to which paragraph (1), (2), or (3) is not applicable, such ceiling as the Administrator may prescribe pursuant to section 207.

(b) The ceiling applicable in respect of any labor shall in no case be less than the minimum compensation prescribed therefor in or pursuant to any law of the United States, or of any State or political subdivision thereof, or of any Territory, District, or possession of the United States.

CEILINGS APPLICABLE TO THE RENT FOR DWELLING ACCOMMODATIONS

SEC. 205 (a) Except as provided in subsection (b) and section 207, the ceiling applicable to the rent for dwelling accommodations by any person shall be

(1) in case the dwelling accommodations are the same dwelling accommodations as the dwelling accommodations rented or offered for rent by such person during the base period, the lowest rent charged by such person for such dwelling accommodations during the base period;