Letter to the President of the Senate on the Defense Production Bill.

Dear Mr. Vice President:

I have been following with keen interest the progress of the Defense Production Bill which passed the House last week and is now being debated in the Senate. As matters now stand, I am much concerned about the outcome.

Two things seem to be happening. First, the powers for which I asked, on July nineteenth, in order to meet the immediate situation, are being whittled down in certain important respects. Second, it appears that the price and wage controls which the Congress proposes to add, may be so circumscribed by a host of detailed limitations and provisos as to confuse and hamper administration should it become necessary to invoke them.

It would be tragic if the Congress were to reject controls we need right now, while voting stand-by measures which could neither do the current job, nor be applied successfully to the contingencies which may arise.

Our chief problem now is to increase defense production, in an economy already running close to capacity, without bringing on inflation. Our aim should be to check inflation at its source. The production aids and credit controls which I have recommended to the Congress are vital for this purpose.

But these powers may not be granted in full. Control of commodity speculation, for example, has now been dropped from both Senate and House bills. Control over credit on existing housing has also been eliminated. Amendments now pending in the Senate would weaken the production features of the legislation. Actions of this sort tend to weaken the effectiveness of the whole program and bring us closer to the day when we might have to clamp down general price and wage controls.

If that were to happen we could ill afford to have an unworkable law on the books. Yet that is just what threatens to occur. In the course of debate on the bill, the Senate has been flooded with amendments to the price-wage provisions reported by the Banking and Currency Committee. These provisions were generally sound and workable, providing a flexible framework for whatever action might be required under future conditions. Unfortunately, some of the amendments offered from the floor are intended to assure some special treatment or privilege for a particular industry or commodity. Paradoxically, many of these provisos are carbon copies of amendments added to the last price control law in 1945 and 1946, in order to relax controls, as we neared the time of their final removal.

I am keenly aware of the difficulties which have confronted the Congress in attempting to speed action on this complex legislation. I know of the hard work and careful thought which the Banking and Currency Committee has put into preparation of the bill now before the Senate. I would not wish for a moment to detract from the caliber of the over-all result. It would undoubtedly be useful to have stand-by powers which were broad enough and flexible enough to work in any situation which might arise. But if many of these amendments are added to the Senate bill, its price-wage provisions will fail completely to meet that description. The enactment of inflexible, patchwork price controls would be a dangerous deception.

Therefore, it is my earnest hope that the Senate will reject the numerous special-purpose amendments proposed for the price control provisions of the bill. I would also urge strongly that the Senate approve the full range of powers recommended on July nineteenth.

Very sincerely yours,

HARRY S. TRUMAN

[Honorable Alben W. Barkley, the Vice President of the United States]