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Senator MAYBANK. I want to get the textile manufacturers and the Manufacturers Association, and you could get the Cotton Council. Mr. O'NEAL. Yes.

Senator MAYBANK. I do not want to delay this further.
The CHAIRMAN. Very well. We will provide a hearing.
Is that all?

We will recess until tomorrow at 10:30a.m.; and then, tomorrow, at that hearing, if the committee agrees to it, we will recess until April 12.

(Thereupon, at 4:30 p. m., a recess was taken until 10:30 a. m., March 31, 1944.)

96739-44-37

EXTENSION OF THE EMERGENCY PRICE CONTROL
ACT OF 1942

FRIDAY, MARCH 31, 1944

UNITED STATES SENATE,

COMMITTEE ON BANKING AND CURRENCY,

Washington, D. C.

The committee met at 10:30 a. m., pursuant to recess on yesterday, in Room 301, Senate Office Building, Senator Robert F. Wagner, chairman, presiding.

Present: Senators Wagner (chairman), Bankhead, Maloney, Radcliffe, Maybank, Taft, Butler, Capper, Buck, and Hawkes.

The CHAIRMAN. The committee will come to order. Mr. Wiggins, you are president of the American Bankers Association?

Mr. WIGGINS. Yes, sir, Mr. Chairman.

The CHAIRMAN. And you know that we are considering the question of extending for another year the Emergency Price Control Act?

Mr. WIGGINS. Yes, sir.

The CHAIRMAN. And its amendments, the Stabilization Act. You

are familiar with the act, I am sure?

Mr. WIGGINS. Yes, sir.

The CHAIRMAN. We are delighted to hear you.

Mr. WIGGINS. Mr. Chairman and gentlemen, I have rather a brief statement which I would like to read in the interest of saving your time.

The CHAIRMAN. Very well, proceed.

STATEMENT OF A. L. M. WIGGINS, PRESIDENT, AMERICAN BANKERS ASSOCIATION, HARTSVILLE, S. C.

Mr. WIGGINS. My appearance before this committee is as president of the American Bankers Association for the purpose of urging an extension of the Emergency Price Control Act of 1942.

The American Bankers Association is a voluntary association of 13,650 banks in the United States, which is 93 percent of all the banks who are doing a regular banking business such as to make them eligible for membership. Members of the association all pay annual dues and participate in the activities of the association. These banks employ approximately 275,000 people, and approximately 40,000,000 of the people of the United States are their customers.

Now, it is not the practice of the American Bankers Association to appear in behalf of or in opposition to national legislation unless it directly affects the banking business, and even in those cases in view of our wide membership with its diverse interests our action in appearing before Congress is limited to established policies of the association which have the general approval of its membership.

This bill which your committee now has before it comes within the scope of this limitation, for the welfare of the banks is at stake in the question before you, and our association has taken a position on this subject.

At its annual convention at Chicago in September 1941 the American Bankers Association adopted the following resolution, which I quote:

A policy of controlling inflation must include direct control not only over prices but also over the cost elements which are the cause of prices. Such control must be equitable. No pressure groups should be allowed to obtain unfair advantage over other citizens in a less favorable position to exert political pressure. We believe all of our people are prepared to cooperate in proposals which are fair and just to all, but we believe that complete cooperation is dependent upon the fairness and justice of the program adopted. There must be no exception; there must be equality of sacrifice.

And that concludes the resolution adopted in September 1941.

For many years the American Bankers Association has had an economic policy commission made up of representative bankers from all parts of the country. This commission has from time to time issued reports on economic subjects relating to banking. I might say that these reports in their draft form are submitted not alone to members of the economic policy commission but to a still wider list of representative members of the association, and in their final form may be considered representative of banking opinion.

In March 1943, something over a year ago, the economic policy commission issued a report entitled "The $100,000,000,000 budget and the banks" which reviewed the implication for banking of the largely increased national budget. I think I could do not better in setting forth banking opinion on the subject before you than to quote to you three paragraphs from this report which are headed, "The inflation threat," and I quote from that report:

The task before us requires not only great national effort, but also great national restraint. This huge spending program will pour into the hands of our people vast sums; the national income will be at new high levels. But civilian spending must be restrained because we cannot produce and import all the goods civilians would like. If spenders compete for a limited amount of goods they will drive prices sky high; in other words, we shall have inflation.

The inflation threat, the peril of unrestrained consumer spending, is being dealt with on several fronts:

(1) Price controls and rationing.

(2) Cuts in nonessential Government spending.

(3) Taxation.

(4) Bond sales to the people. (5) Other voluntary savings.

All of these forms of restraint are necessary and we are daily learning more about them, their uses and their limitations. Especially are we learning how hard it is to make laws and rules to restrain some people without inflicting undue and perhaps unnecessary hardships on others. Strongly intrenched pressure groups resist restraints. The administrator of the functions of rationing and price control needs every sympathy and every aid from patriotic citizens.

That concludes the report.

I am glad to report to you that the bankers of the country have been taking vigorous action with respect to the foregoing program as far as it lies within the banking field. They have given millions of hours of time of their staffs and spent millions of dollars in the sale of War bonds. And despite a serious manpower shortage, the bankers have taken over for the Office of Price Administration a huge task in handling ration coupons and tokens. In addition, the bankers of the country have been fostering a program for the encouragement of savings and deserve, I believe, some credit for a record of savings by the American people which is many times anything ever witnessed before and which has gone far to resist the forces of inflation..

We realize, however, that the fight against inflation has many fronts and our own work will be in vain unless every front is strong. At the moment, one of the most critical of these fronts is the one listed as No. 1 in the quotation I have just read-price control and rationing. I am here today to ask in behalf of the bankers that there should be no let-down in the necessary controls on that front. Price control and rationing are not pleasant; they are totalitarian in nature; they go across the grain of the American people. Their administration involves a thousand complex problems which, as a representative of the banking industry, I am not in a position to discuss. The single point I wish to make is that such controls are a necessary evil in time of

war.

No anti-inflationary program is effective without them. Now, it is the business of bankers to provide the people of this country with a mechanism for handling the money with which the business of the country is transacted. The threat of inflation is a threat to the value of this money. Such a threat is not a technical question or a financial question alone; it is a threat to the welfare of the people. Let me conclude by quoting again from a report of the Economic Policy Commission of the American Bankers Association issued in September 1943. While this report dealt primarily with international problems, the statement it makes as to the value of money is true both nationally and internationally, and I quote:

Ranking close to the hazard of war as an obstacle to human material progress is the changing value of money. When there is a question about the value of money, trade is disorganized, dormant, or feverish, as in Germany and central Europe after the last war and in France during the monetary troubles of the twenties and thirties. Especially is the advance planning on which a high level of employment so largely depends blocked by doubts of the value of money. The depression of the middle thirties certainly owed some of its severity to fears about money-about its gold value and about the goodness of bank deposits. Money and enterprise grew timid and went into hiding together.

In the welter of uncertainties which will surround us after the war it is essential, as has been said before, to reduce the areas of doubt, to fix the points of the compass. Only so can the people who want to plan, who want to trade, who want to provide work, go ahead with assurance. Currency value is one of the factors basic to decisions in business and government transactions.

Therefore, Mr. Chairman and gentlemen, in behalf of the American Bankers Association, I am asking for the extension of the Price Control Act of 1942 as one of the steps essential to the preservation of the integrity of the money in which the business of the country is transacted.

The CHAIRMAN. Thank you very much. Are there any questions? Senator BANKHEAD. Have you any amendments to propose?

Mr. WIGGINS. Senator, we feel that there are possible dangers in opening up what seems to us a Pandora's box, and I am quite sure everyone has many suggestions for changes they would like to see, but it is a question you gentlemen are much better prepared to answer than I, as to whether it would be wise to open up the subject or not. Therefore, we are merely sticking to the principle of extension of the over-all Price Control Act.

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