I am particularly disturbed at the effect such thinking may have on production and employment.  If manufacturers continue to hold back goods and decline to submit bids when invited—­as I am informed some are doing—­in anticipation of higher prices which would follow the end of price controls, we shall inevitably slow down production and create needless unemployment.  On the other hand, there are the vast majority of American businessmen who are not holding back goods, but who need certainty about the Government pricing policy in order to fix their own long-range pricing policies.

Businessmen are entitled therefore to a dear statement of the policy of the Government on the subject.  Tenants and housewives, farmers and workers—­consumers in general—­have an equal right.

We are all anxious to eliminate unnecessary controls just as rapidly as we can do so.  The steps that we have already taken in many directions toward that end are a clear indication of our policy.

The present Price Control Act expires on June 30, 1946.  If we expect to maintain a steady economy we shall have to maintain price and rent control for many months to come.  The inflationary pressures on prices and rents, with relatively few exceptions, are now at an all-time peak.  Unless the Price Control Act is renewed there will be no limit to which our price levels would soar.  Our country would face a national disaster.

We cannot wait to renew the act until immediately before it expires.  Inflation results from psychological as well as economic conditions.  The country has a clear right to know where the Congress stands on this all-important problem.  Any uncertainty now as to whether the act will be extended gives rise to price speculation, to withholding of goods from the market in anticipation of rising prices, and to delays in achieving maximum production.

I do not doubt that the Congress will be beset by many groups who will urge that the legislation that I have proposed should either be eliminated or modified to the point where it is nearly useless.  The Congress has a clear responsibility to meet this challenge with courage and determination.  I have every confidence that it will do so.

I strongly urge that the Congress now resolve all doubts and as soon as possible adopt legislation continuing rent and price control in effect for a full year from June 30, 1946.

(b) Food subsidies.

If the price line is to be held, if our people are to be protected against the inflationary dangers which confront us, we must do more than extend the Price Control Act.  In September we were hopeful that the inflationary pressures would by this time have begun to diminish.  We were particularly hopeful on food.  Indeed, it was estimated that food prices at retail would drop from 3 to 5 percent in the first six months following the end of the war.

In anticipation of this decline in food prices, it was our belief that food subsidies could be removed gradually during the winter and spring months, and eliminated almost completely by June 30 of this year.  It was our feeling that the food subsidies could be dropped without an increase to the consumer in the present level of food prices or in the over-all cost of living.