Statement on Signing an Executive Order on Stabilization of Wages, Prices, and Salaries

The Executive Order I have signed today is a hold-the-line Order.

To hold the line we cannot tolerate further increases in prices affecting the cost of living or further increases in general wage or salary rates except where clearly necessary to correct substandard living conditions. The only way to hold the line 'is to stop trying to find justifications for not holding it here or not holding it there.

No one straw may break a camel's back, but there is always a last straw. We cannot afford to take further chances in relaxing the line. We already have taken too many.

On the price front, the directions in the Order are clear and specific.

All items affecting the cost of living are to be brought under control. No further price increases are to be sanctioned unless imperatively required by law. Adjustments in the price relationships between different commodities will be permitted if such adjustments can be made without increasing the general cost of living. But any further inducements to maintain or increase production must not be allowed to disturb the present price levels; such further inducements, whether they take the form of support prices or subsidies, must not be allowed to increase prices to consumers. Of course, the extent to which subsidies and other payments may be used to help keep down the cost of living will depend on Congressional authorization.

Some prices affecting the cost of living are already above the levels of September 15, 1942. All of these cannot be rolled back. But some of these can and should be rolled back. The Order directs the reduction of all prices which are excessively high, inequitable, or unfair. The Stabilization Act was not intended to be used as a shield to protect prices which were excessively high on September 15, 1942.

On the wage front the directions in the Order are equally clear and specific.

There are to be no further increases in wage rates or salary scales beyond the Little Steel formula, except where clearly necessary to correct substandards of living. Reclassifications and promotions must not be permitted to affect the general level of production costs or to justify price increases or to forestall price reductions.

The Order also makes clear the authority of the Chairman of the War Manpower Commission to forbid the employment by an employer of any new employee except in .accordance with regulations of the Chairman, the purpose being to prevent such employment at a higher wage or salary than that received by the employee in his last employment unless the change of employment will aid in the prosecution of the war.

It further calls the attention of all agencies of the Federal Government and of State and municipal authorities concerned with the rates of common carriers and public utilities to the stabilization program in the hope that rate increases will be disapproved and rate reductions ordered so far as may be consistent with Federal and State laws.

For some time it has been apparent that this action must be taken because of the continued pressure for increased wages and increased prices. I have heretofore refrained from acting because of the contention of the supporters of the Bankhead bill that under the Act of October 2, 1942, I had no authority to place ceiling prices on certain commodities at existing levels. My views on that question were set forth in my message of April 2, vetoing the Bankhead bill.

The Senate did not vote upon the question of passing the bill over the veto. Its author moved to recommit the bill to the Committee on Agriculture, stating that there were not sufficient votes to override the veto.

I am advised that weeks or months from this date the bill may be reported for consideration. I am also advised that in the history of the Congress no bill vetoed by a President and recommitted to a committee has ever become law.

I cannot wait to see whether the Committee at some future date will again report the bill to the Senate. I cannot permit a continuance of the upward-spiral of prices.

Some groups have been urging increased prices for farmers on the ground that wage earners have unduly profited. Other groups have been urging increased wages on the ground that farmers have unduly profited. A continuance of this conflict will not only cause inflation but will breed disunity at a time when unity is essential.

Under the Act of October 2, 1942, Congress directed that so far as is practicable, wages, salaries and prices should be stabilized as of the level of September 15. Under that direction inflation has been slowed up. Now we must stop it.

We cannot stop inflation solely by wage and price ceilings. We cannot stop it solely by rationing. To complete the job, Congress must act to reduce and hold in check the excess purchasing power. We must be prepared to tax ourselves more, to spend less and save more. The details of new fiscal legislation must be worked out by the appropriate committees of the House and the Senate. The executive departments stand ready to submit suggestions whenever the committees desire.

I am exerting every power I possess to preserve our stabilization program.

I am sure the Congress will cooperate.