but we are very much alive to the problem, and we are going to produce something in that direction.

Senator DIRKSEN. Do you have your statement before you there? I wish you would look at that chart labeled "Wage Changes Before and Since Controls." Frankly, I do not believe that chart means a great deal, and I would like to see it spelled out a little bit. Your title is "Wage Changes Before and Since Controls." (See p. —.)

Now, I assume, No. 1, that that involves both voluntary changes by agreement between employer and employee, and wage changes that have been passed upon by your Wage Stabilization Board; is that correct?

Mr. PUTNAM. These are figures taken from the Bureau of Labor Statistics, average factory hourly earnings.

Senator DIRKSEN. What I am getting at is this: I do not believe that any of those agencies have ever submitted to this committee or the Congress a breakdown that would show essentially this type of information: One, the number of wage increases that have gone into effect by voluntary agreement. And, by that, I mean when Mr. Wilson was here in October of last year; he indicated then that there were probably some 6,000 cases pending before the Board. Now, I would like to see a tabulation of the total number of cases that have been processed, the number of workers involved, and the dollar amounts involved from February 1951 to December 1951; for, unless the thing is made specific, I do not think it means a thing.

Mr. PUTNAM. This is meant to show you how the thing has worked. Prices and wages have been controlled better than before. Wages have not gone up as they did in the previous period. But the thing you are asking for I am not sure that we can give you. We will give you facts that we have. But you must realize, that the Wage Stabilization Board attempts in its regulations to make them as much as possible self-administering so that there will not have to be any request at all for specific approval of an increase which comes within the regulations. For instance, if there has been an increase in the Consumer's Price Index, you can raise wages as much percentagewise as that increase without coming to the Board and asking them for permission. The Board would know only about the borderline or exceptional cases it had to pass on specifically. So they would have no record of the vast majority of the wage increases. They would have no record of them at all. We could only get them from the Bureau of Labor Statistics after they are compiled from what has happened.

Senator DIRKSEN. From the standpoint of your job, I think that would miss the point entirely. You are dealing here with inflation control, are you not?

Mr. PUTNAM. Yes, sir.

Senator DIRKSEN. Now, then, the thing that has bearing on inflation control finally is the additional amount of spending money that is pumped into the bloodstream of the country. Now, to express it in hourly earnings or percentages means nothing. I would like to see a dollar amount, an over-all aggregate dollar amount to indicate to what extent you have added to the spending stream of the country by permitting wage increases, or approving them under general policy, like that policy that was negotiated sometime last August that involved, I think, at that time, some 6,000 cases. Now, I have another thing in mind. I saw in the New York Times recently that the

Wright Aeronautical had a case pending before your Board. Maybe I misunderstood all the circumstances, but it was my general understanding that they had agreed upon a wage increase, and it came down here and you approved an increase a good deal larger than that which was agreed to around the bargaining table.

There is another case involving an aircraft plant which I will not name which is going to add greatly to the cost of airplanes.

I do not think we have an adequate concept of what you are doing in that Wage Stabilization Board, and how much money is being added to the spending stream.

I would appreciate it if you would put that in tabular form to insert in these hearings-what has been going on.

Mr. PUTNAM. I can only give you the totals from the Bureau of Labor Statistics. Most of them do not come through the Board at all. If every wage increase came through this Board, we would have thousands of people processing applications instead of a few hundred.

All the General Motors types of contracts provide for periodic costof-living adjustments which are allowable under our rules.

Senator CAPEHART. I think it is well to have what the Senator asked for, but on page 23 of the Economic Indicator, you will find that from December 1950 to December 1951, the increase of wages was $16 billion.

Senator DIRKSEN. But I am interested in a breakdown showing the processing of cases month by month since these controls went into effect, how much have you allowed, to what extent have you added to the inflationary spiral. Now, you can jutify, no doubt.

Mr. PUTNAM. There is no way for me to tell you how many we have allowed, because the Board will pass a general regulation saying that all employers and employees may, if they want to, agree on the wage increase equal to the increase in the cost of living. You do not have to go and report back, you do not have to ask permission. They allow that much of a wage increase, and we would have no way of knowing how many firms had done it and how many had not done it, except by general statistics, which we would get from the Bureau of Labor Statistics.

Senator DIRKSEN. If your statistics are in that nebulous state, some of the claims made in your statement would be difficult of substantiation.

Mr. PUTNAM. Just as we cannot tell you the price of everybody's individual commodity, but we can tell you from the Bureau of Labor Statistics what the cost of living has done. If we had to process every case, it would take an army, and that is why we have tried to make selfenforcing regulations, self-determined.

Senator DIRKSEN. I am thinking now of your last chart here labeled "Federal expenditures for major national security programs." pt. 2.)

(See

What was the source of the estimates that you used there, expressed in terms of billions by quarters, for 1950, 1951, and 1952, and projected for 1953-it shows it in billions of dollars? Now, then, what does it include? I will not ask you for an answer now.

Mr. PUTNAM. It is based, the first part, before the line, on daily Treasury statements, and the last part is Bureau of the Budget estimates.

Senator DIRKSEN. When you say "Treasury statements," is that limited to national security programs?

Mr. PUTNAM. Yes, it is.

Senator DIRKSEN. I wonder why you cannot take that chart and break it down to show what items, by categories, are included therein? Mr. PUTNAM. We would have to get it from the Bureau of the Budget, but I think we can get it.

Senator DIRKSEN. I think it should be done in detail. I am beginning to wonder what we are getting for this money that we are spending. You talk about security programs, and I am getting a little curious, and I think other people are.

Mr. PUTMAN. I would presume the Appropriations Committee had that all broken down.

Senator DIRKSEN. But it has to be tied in, of course, with your control program.

Senator ROBERTSON. Mr. Putnam, if wholesalers and retailers would agree to pass on to the ultimate consumer the exact amount of the excise tax, would you still want the Herlong amendment repealed? Mr. PUTNAM. It would probably not be nearly so important. Senator ROBERTSON. Well, maybe if we can get them to agree to do that, there are a number of excise taxes that are just passed on. The jewelery tax, for example. I do not think it has been the custom of automobile dealers to pyramid the tax. You pay for the car, you pay for the freight, and you pay so much tax.

Mr. PUTNAM. Certainly the pyramiding of the tax is one of the best examples of the reasons for repeal of the Herlong amendment. Senator ROBERTSON. If the wholesalers and retailers would agree to do that, do you think it would be fair and right, then, to extend the privilege of historic mark-up to all retailers instead of to just some of them?

Mr. PUTNAM. As a practical matter, in our regulations, we have generally given historic mark-ups to wholesaler and retailer. We would prefer the flexibility without being tied down.

Senator ROBERTSON. Here is the language of the Herlong amend

ment:

No rule, regulation, or amendment thereto shall hereafter be issued under this title which shall deny to sellers of materials their customary percentage margin over cost.

Now, I thought, and I think the members of our committee thought, that hereafter-after this time-retailers would get their customary mark-up, but you had a case in one of the chain stores on a regulation issued prior to this, and the OPS said, "Oh, no, hereafter means regulations issued hereafter, we won't give it to you, but we will give it to everybody else that we haven't regulated up to this time," so the practical effect of that ruling is that food distributors, for instance, are not under the Herlong amendment, because of that word “hereafter." If we can eliminate this issue of pyramiding excise taxes, we would be, in your opinion, striking that word "hereafter" out of the law?

Mr. PUTNAM. I would not like to see you strike anything out that would raise the cost of living. I am primarily-speaking for all America, both business and consumers-I am primarily the consumer's lobby, because I think business will be down here in force to speak

for itself. I have to be the consumer's lobby here before you gentlemen, because the poor consumers do not seem to have much of a lobby otherwise, I would like to see nothing done that is going to force us to increase the cost of living.

Senator ROBERTSON. But you come from an area that always stood for equal justice for all.

Mr. PUTNAM. I have always felt that, Senator.

Senator ROBERTSON. That is your personal platform.

Mr. PUTNAM. It is fair and equitable.

Senator ROBERTSON. You would not want to see some distributors have their customary mark-up and others not have it because we did not know how the court was going to construe the word "hereafter," would you?

Mr. PUTNAM. I would like to see everybody treated fairly and equitably, but I am still fighting for the consumer, because I think in all that list of witnesses you have in front of you the list the chairman spoke of-I did not look at the names on the list but I doubt if anybody is there representing the consumers.

The CHAIRMAN. Well, I would not know.

Mr. PUTNAM. I feel I must represent the consumers here. Senator MOODY. As I understand it, your position is you are for equal justice for all, including the consumers.

Mr. PUTNAM. That is correct.

Senator MOODY. In line with the question a moment ago by the Senator from Illinois, is there any difference in the inflationary effect, Mr. Putnam, between dollars that are pumped into the buying and spending streams by wages and dollars put into the stream by higher profits brought about by the Capehart amendment?

Mr. PUTNAM. If anything-and this would be just an opinion-I would say the higher profits had been more inflationary, because business has been trying to do so much expanding with them, which creates demands in the area that is tightest in our economy-machinery and the metals and those things are tightest whereas the consumer goods

Senator CAPEHART. I cannot let the statement of the Senator from Michigan go unchallenged, because he evidently is trying to misrepresent to this group, or he does not know the facts. Under the Capehart amendment they can only add their increase in costs to their preKorean selling price, and it has absolutely no relationship to profits whatsoever, and you know that, and you should so state, because they make no profit on the increase in costs.

Mr. PUTNAM. He did not ask me anything about the Capehart amendment.

Senator CAPEHART. Now, tell us whether or not

Mr. PUTNAM. Senator, I did not realize I was discussing with him your amendment at all. I thought we were discussing the general inflationary effect.

Senator CAPEHART. The question was is it more inflationary to do one thing, or inflationary with the additional profits that they make. Now, they make no additional profits over their pre-Korean price; is

that correct?

Mr. PUTNAM. No, quantities of industries do. They can come in under your amendment and make at least the same, but some are making a lot more.

Senator CAPEHART. The point is that they take their pre-Korean price, and they can only add the increased costs, and they make no profit on the increased cost; is that not correct?

Mr. PUTNAM. But many people's costs today are lower than they were on July 26.

Senator ČAPEHART. Is that correct? Is that the formula?

Mr. PUTNAM. That is the formula in the Capehart amendment. Senator CAPEHART. And they make no profit on their increased costs; is that correct?

Mr. PUTNAM. They pass the cost on.

Senator CAPEHART. If a man in pre-Korea was making a profit, under the Capehart amendment he is making no more profit after he gets his increase if he is showing a loss pre-Korea, and he adds his increased costs since pre-Korea, he is still showing a loss. Is that correct or not?

Mr. PUTNAM. But I still do not think it has anything to do with what the Senator was asking me.

Senator CAPEHART. Is that correct, or not? Is that the formula? Mr. PUTNAM. That is the formula, but maybe he has cut his costs since then. Maybe he has become more efficient. But all he has to do is show his costs went up as of July 26 of last year.

Senator CAPEHART. But the Capehart amendment in itself had nothing to do with it. A man may be in a loss position one month and in a profit position 6 months later, but you are trying to leave the impression that they make a profit on their increased costs, and they do not, and I do not think it is fair, and I do not intend to let it go unchallenged.

Senator MOODY. The way the law worked before the ceilings were put on was what was termed to be a fair and equitable way. We all know the system was changed by the complicated verbiage of the Capehart amendment.

Senator DIRKSEN. Before Mr. Putnam leaves, Mr, Chairman, will the head of the Rent Stabilization Board appear before the committee? The CHAIRMAN. No; the committee unanimously voted not to have any of the rent people.

Senator DIRKSEN. There will be no testimony on the rent situation? The CHAIRMAN. The committee voted to permit the real-estate people to present their complaints against the administration of the Board.

Senator DIRKSEN. I want the record to show it was not unanimous because I was not here to vote.

The CHAIRMAN. I will be only too glad to reconsider it. You know I do not believe in putting something over on anybody. We decided it was not any reason to have the rent-control people here, we have not got the time. You have seen the schedule.

Senator DIRKSEN. I was simply going

The CHAIRMAN. On Wednesday, March 19, Senator Capehart made this suggestion, Senator, that the Property Owners Association of America, the National Apartment Owners Association, the American Hotel Association, and National Association of Real Estate Boards testify in connection with the administration of the law.

Senator DIRKSEN. But they will have a chance to make their case so far as rent control is concerned?

The CHAIRMAN. I imagine they will.