Control of Living Costs

Report Outline
Concern Over Steady Rise in Living Costs
Debate on Causes of Current Inflation
Attempts to Curb Wage-Price Spiral
Special Focus

Concern Over Steady Rise in Living Costs

Costs of living in the united states have been mounting steadily for a year and a half. The consumer price index compiled by the Bureau of Labor Statistics touched a new high in July for the eleventh consecutive month. The rise began, after three years of relative stability, in March 1956 and has been interrupted since then only by a slight decline in the one month of August 1956. The advance since the spring of 1956 now amounts to a full five per cent.

When the index figures for July were announced on Aug. 23, Senate Majority Leader Lyndon B. Johnson (D-Texas) warned that the mounting cost of living might “well become the dominant issue on the American scene,” Democratic National Chairman Paul M. Butler, announcing the appointment on Sept. 12 of an Advisory Committee on Economic Policy, said the high cost of living would be one of the first problems considered by the newly formed group. Butler blamed living cost increases on “the mistaken economic policies and fiscal mismanagement of the Republican administration.”

The administration itself made a dramatic anti-inflationary move on Sept. 13. Treasury Secretary Anderson announced the creation that day of a new advisory group of officials headed by President Eisenhower and including Anderson, Federal Reserve Board Chairman William Mc-Chesney Martin, Jr., Raymond J. Saulnier, chairman of the President's Council of Economic Advisers, and Gabriel Hauge, the President's special economic assistant. The group is to consult on the “financial aspects” of the upward price movement. Its formation gives the administration's anti-inflation planning top-level prestige and will have the special advantage, observers predict, of bringing the President and the Federal Reserve chairman into contact at frequent intervals.