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FOUR: Several lesser, but still important bodies will be set up.
A Committee on the Health Services Industry will advise the Pay Board and Price Commission on how to adapt wage and price standards to doctors' fees and hospital charges. A Committee on State and Local Government Cooperation will advise on wage standards for public employees. An Interest and Dividends Committee of high Government officials, headed by Federal Reserve Chairman Arthur F. Burns, will try, presumably by jawboning, to persuade bankers to hold down loan rates voluntarily and corporate executives to hold down dividend payouts. Nixon will also ask Congress for standby authority to set legal ceilings on interest.
FIVE: A Service and Compliance Administration will handle enforcement.
This administration will really be the Internal Revenue Service wearing a second hat; it will be staffed by 3,000 IRS agents working out of 360 field offices around the country. They will investigate complaints of pay or price violations by the big companies and unions that report to the Pay Board and Price Commission. The agents will also spot-check the books of small companies in order to make sure that they are complying with the national wage and price guidelines as well as with the tax laws.
The chairmen of the Pay Board and Price Commission will have authority to seek injunctions and fines against violators big or small; such cases will be prosecuted by the Justice Department. The fine for each violation will be $5,000. That is not as small as it sounds. A machine-tool maker, for example, could conceivably be fined $5,000 for every tool shipped at a higher price than the Price Commission proposes to allow.
SIX: Connally's Cost of Living Council will sit atop the whole structure.
The COLC will stay out of day-to-day administration and will not hear any appeals from the decisions of the Pay Board and Price Commission. Connally says, though, that it will "review" the standards set by the various boards, commissioners and committees to see that they are "in balance" with each other and show real promise of cutting the inflation rate in half by the end of next year. Just what the word review may mean has been left deliberately vague, apparently in order to give Connally maximum scope in guiding the decisions of the other bodies without explicitly threatening their independence.
This whole structure reflects the often-voiced and bitter reminiscences of Richard Nixon, a veteran of World War II Office of Price Administration, which deployed a bureaucratic army of price inspectors across the country. In contrast to the OPA, the number of employees of the new mechanism will be fairly small.