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Office Correspondence

Chairman Eocles




Subject: Price Decontrol Board

Richard A» Musgrave

Most of the provisions under the new Act are aimed at expediting the decontrol process* The distribution of functions is
as follows t
Decontrol Board
The functions of the Board are*
(1) With regard to livestock* milk, cottonseed, soy beans and
grains (or products processed in substantial part from
these materials)t No price ceilings shall apply prior to
August 21, I9I4.6, but these commodities shall again be subject to ceilings unless the Board recommends to the contrary* Hearings to determine such action will start on
If the Board does not recommend reapplication of ceilings
as of August 21, it may do so at a later date* The conditions under which the installment of ceilings can be
recommended are set forth in very general terms, including
the public interest11*
(2) With respect to poultry eggs and tobacco (or products processed therefrom) 1 No ceilings shall apply prior to August 21, 19i+6, but the Board may recommend reintroduction
of ceilings on these products after that date*
(3) With regard to other commodities, the Board is concerned
with decontrol only* It takes no initiative but merely
reviews petitions for decontrol submitted to it* It has
nothing to do with adjustments of ceilings but only with
their removal*

(a) If petitions for decontrol have been submitted
to OPA or Agriculture and have been denied, the
Board reviews and makes a final decision* This
decision must be reached with ttthe utmost expedition"#
(b) If OPA or Agriculture wish to reinstitute ceilings on decontrolled products, the Board must
sanction this*


Chairman Eccles

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The Board may determine reestablishment of subsidies to
commodities under (1) if ceilings have been reapplied*
The Board has thus the initiative in recontrolling commodities mentioned under (l) and (2)* It is a final authority for
decontrol where such decontrol has been requested by an Industry
Advisory Committee but denied by OPA or Agriculture, without however taking the initiative for such action* Also, the Board has
general control over the subsidy program*
Department of Agriculture
The Secretary of Agriculture each month shall certify
to OPA which agricultural commodities shall be continued under
ceilings and which shall be decontrolled or be given ceiling adjustments # These certifications are not subject to review by
OPA which merely carries out the prescribed policies or by the
Decontrol Board* Action by the Decontrol Board is needed only
where ceilings are to be reinstituted on decontrolled commodities
or petitions for decontrol are denied by the Secretary of Agriculture*
Agricultural commodities are defined broadly to include
food or food products ^processed, or manufactured in whole, or substantial part from any agricultural commodity*1* This means that
livestock as well as meat prices are subject to control by the
Department of Agriculture—I suppose this also includes a substantial part of the control of food prices in restaurants*
The Price Administrator fulfills the same function with
regard to non-agricultural commodities as does the Secretary of
Agriculture for agricultural commodities* No ceiling shall be
maintained after December 31* 19^6, unless the Administrator has
found the commodity in question to be "important in relation to
business costs or living costs11* Ceilings shall be removed whenever t!supply balances demand11* A new price formula based on I J .
industry profits plus cost increases since then is prescribed*
OPA is instructed to adjust ceilings to comply with the new formula and an Industry Advisory Committee may apply to the Administrator for such adjustments, in which case the Administrator is
to make the necessary adjustment within 60 days or deny it* If
no OPA action is taken within this period, the Industry Advisory
Committee may petition the Emergency Court of Appeals which may
require the Administrator to make an adjustment within 30 days#


Chairman Eccles

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Summary of Procedure
Decontrol may result from* t
(a) Decision initiated by Department of Agriculture (for
agricultural commodities) or OPA (for other commodities)* No agreement by the Board is required* The
Department of Agriculture or OPA may take such action
on the basis of a petition by an Industry Advisory Committee* The Department of Agriculture or OPA shall
hold hearings within 10 days and issue a statement within 15 days thereafter explaining why the petition has
not been granted* At any time within 30 days thereafter the Industry Advisory Committee may petition the
Price Decontrol Board to review the matter* The Board
is to act with wutmost expedition11*
Recontrol may result fromi
(a) Decision by the Decontrol Board with regard to commodities under (1) and (2) #
(b) Recommendation by OPA and Department of Agriculture with
approval of the Decontrol Board with regard to other
Ceiling adjustments may result from*
(a) Initial action by Department of Agriculture for agricultural commodities or OPA for other commodities*
(b) Action by these departments upon petition by an Industry
Advisory Committee, or if denied upon instruction by the
Emergency Court of Appeals*