(2 of 2)
Last week the Defense Advisory Commission, whose price-hawk is Economist Leon Henderson, met 17 pulp & paper men (including Richard J. Cullen, president of vast International Paper & Power Co.) in Manhattan, got an agreement for no further rises. Both sides agreed on one important fact: total U. S. pulp-producing capacity is enough for all needs, except for a few specialties. Then, said the Commission, there is no excuse for carrying pulp prices higher. Pulpmen agreed that further price changes should result "only from actual changes in basic costs." Blamed for the pulp squeeze by both sides were "psychological factors"—i.e., hysterical forward buying.
To other economists besides Leon Henderson, the precedent set by this meeting made good sense. For there is no real necessity for rigid price-fixing in any industry until it is working at full capacity (as in Germany, where all prices are controlled). Significant was a sentence in the Defense Advisory Commission's release last week: ". . . It is upon an adequate supply that the country must rely principally for price stabilization."