Extracted text

OCR Page 1 of 19
213 THOUGH FIFTH DRAFT WAGES AND PRICES ARCITIVES RECORDS AND On August 18, 1945 -- four days after the surrender of 9599 Japan -- I issued en Executive Order which laid down the guiding 1 policies of your Government during the transition from war to peace. Briefly stated these are: First, to assist in the maximum production of civilian goods. Second, as rapidly as possible to remove government controls and restore collective bargaining and free markets. Third, to avoid both inflation and deflation. Those are still our policies. One of the major elements determining whether or not we shall succeed in carrying out those policies is the question of wages and prices. If wages go down substantially, we face deflation. If prices go up substantially we face inflation. We must be on our guard, and steer clear of both of these vital dangers to our security. What happens to wages is important to all of us -- even to those of us who do not work for wages. It is important to business not only because wages represent an important item in the cost of producing goods, but because unless people generally earn enough wages they cannot buy the products of industry. What happens to wages is also important to the farmer. For the income he earns depends a great deal on the wages and purchasing