View original document

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.



A* F . H INRICH S, Acting Commissioner

The General Maximum Price Regulation

Bulletin 1So. 87 9

For sale by the Superintendent o f D ocum ents, U . S . Governm ent Printing Office

W ashington £ 5 , D . C.


Price 1 5 cents

Letter o f Transmittal

United States Department o f Labor,
Bureau o f Labor Statistics,
Washington, D . C ., June 1 0 , 1 9 4 6 .
T h e Secretary o f L abor :

I have the honor to transmit herewith a report on the General Maxi­
mum Price Regulation of the Office of Price Administration, which presents
an analysis of one of the most far-reaching o f the wartime price regula­
tions of the Federal Government. As the principal mechanism fo r control
o f prices for many commodities for a considerable period, the regulation
was a major influence in stabilizing the cost of living as well as industrial
prices during the war.
This report is one of a number of bulletins prepared by the Prices and
Cost of Living Branch of the Bureau of Labor Statistics, dealing With
problems related to prices and cost of living during the war. As the official
price-collection agency of the Federal Government outside the field of
agriculture, the Bureau has undertaken this series o f reports, comprising
the history of wartime prices, as a part of its program to maintain a con­
tinuous anaylsis o f the impact o f prices and price structures on the
economy o f the United States.
These studies are prepared by individual staff members under the
general direction o f the Chief o f the Branch, and, as a rule, have been
extensively circulated for use by the legislative and administrative
branches of Government at the time when the issues to which they relate
were under consideration. This report, covering the period from the
autumn o f 1941 through 1943, was prepared in 1944-45 by Doris P. Rothwell
o f the General Price Research and Indexes Division o f the Bureau
o f Labor Statistics.
A. F. Hinrichs, Acting Commissioner .
Hon. L. B. Schwellenbach,
Secretary o f Labor .


Chapter I.—Introduction ..........................................................................


P a r t I.— H ist o r y

Chapter 2.—Background o f the General Maximum Price Regulation


Situation in the fall of 1941................................................................
Nature o f existing price control........, .............................................
Controversy regarding the proper method o f control...................
Example of C an a da .............................................................................
Influence o f Pearl Harbor...............
Emergency Price Control A ct............................................................
Pressures on price level in February-March 1 9 4 2 .....................
Trend o f prices ...................................................................................
Inadequacy of existing price control ..............................................


Chapter 3.—Provisions o f the General Maximum Price Regulation..


Limitations of the Emergency Price Control A ct..........................
Determination o f ceiling ..................................................................
March freeze .................................................................................
Progressive pricing formula .....................................................
Record-keeping and posting ............................................................
Licensing ...........................................................................................
Penalties ...........................................
Provisions for adjustm ents................................................................


Chapter 4.—Amendments and subsequent regulations.........................


Amendment to the Emergency Price Control A c t .................. .
Amendment o f the General Maximum Price Regulation...............
Removal of commodities from the General Maximum Price
Regulation .................................................................. *................
Subsequent regulations .............................................. , ....................
Designed to meet specific industry problems . ........................
Other freeze dates ...........
Formula regulations ............... , ................................................
Dollars-and-cents c e ilin g s ...........................................................


P a r t II.— A p p r a is a l

Chapter 5.—Direct and indirect violations ...........................................


Open violations ................................
Black markets .....................................................................................
Hidden violations ...................................................................
Extras, discounts, and concessions...........................................
Quality deterioration ..................................................................
Discontinuance of cheaper lines and services.........................
Changes in channels of distribution...................................



Chapter 6.—Difficulties o f administration............. ...............................


Enforcement ...................................................................
Educational problem ...................................
Complexity ...........................................................................................
Latitude for independent interpretation..........................................
Other special p ro b le m s ......................................................................
Alternatives in April 1942.....................................


Chapter 7.—Economic limitations ...........................................................


Limitations in co v e r a g e ......................................................................
Inadequacy o f supplementary measures to control inflation........
Inequities o f price relationships ........................
Existing abnormalities in March 1942................................ . . .
Development of the distributive squeeze..................................
Conflicts with other objectives.........................................................
Production versus price control..............................................
Equitable versus stable prices.................................. ................
Lack o f quality control........................................................................


Chapter 8.—Economic accom plishm ents................................................


Price movements .................................................................................
Rate o f increase since May 1942..................................................
Controlled versus uncontrolled prices......................................
Comparison, with W orld W ar L ..................................................


Chapter 9.—Conclusion ................................................. ...........................


Appendix.—Detailed tables:
Table 1.—Percentage changes in posted average retail ceiling
prices o f foods covered by the General Maximum Price
Regulation, from October 13, 1942. to December 15, 1 9 4 2 ....
Table 2.—Unit labor cost in selected manufacturing industries,
1939-45 ...........................................................................................
Table 3.—Indexes o f wholesale prices, controlled and un­
controlled ......................................................................................
Table 4.—Indexes of wholesale prices o f foods, controlled and
uncontrolled .................................................................................
Table 5.—Percentage changes in wholesale prices for ^elected
periods ...........................................................................................
Table 6.—Percentage changes in consumers’ prices fo r selected
periods ..........................................................................................
Bibliography ............................................................................... ................


Bulletin N o . 87 9 o f the
United States Bureau o f Labor Statistics

Chapter 1 .—Introduction
The General Maximum Price Regulation was issued on April
28, 1942, by. the Office o f Price Administration as an emergency
measure to prevent, insofar as possible, further price increases dur­
ing the war. Simple in concept, but complicated in practice, it sub­
stituted an absolute freeze o f price relationships at a given date
for the pricing mechanism o f an unregulated economy. The regu­
lation entailed many problems o f administration and enforcement,
as well as continual adjustment o f inequities.
Because o f its wide coverage, the regulation was one o f the
most important o f all OPA measures. This report analyzes the
conditions which necessitated its issuance and the effectiveness o f
the regulation in meeting the purpose fo r which it was issued.
The report is presented in two parts. Part I—History— con­
sists o f three chapters, the first o f which discusses the develop­
ments leading to the regulation and in particular contrasts condi­
tions in the fall o f 1941 with those in the^ spring o f 1942. The
second chapter deals with the actual provisions o f the regulation
and the third, with the relevant subsequent developments. Part
II—Appraisal— contains the writer’s evaluation o f the regulation,
based upon an analysis o f its limitations and accomplishments,
and the movement o f prices before and after issuance o f the regu­
lation. It also contrasts the regulation with other means o f price
control and considers whether or not other measures might nave
been equally effective or more practicable in the emergency.


Part I .—History
Chapter 2 .—Background o f the General Maximum
Price Regulation
The forces leading to the wartime price advance in the United
States were actually set in motion in August 1939 when Germany
invaded Poland. Wartime price rises gained momentum with the
initiation o f the American Defense Program in 1940, but it was
not until the Japanese attack on Pearl Harbor compelled our
active participation in the war that they reached the alarming prortions which resulted in the issuance o f the General Maximum
ice Regulation on April 28,1942.


Situation in the Fall o f 1941
Although the outbreak o f hostilities in Europe led to an
increase o f 6 percent in wholesale prices in the United States by
the end o f 1939, this advance was largely speculative1 and confined
to specific commodities. Prices receded by August 1940 to a. level
only 3 percent above August 1939. By this time, however, the
recession had run its course, and prices turned upward under the
influence o f huge Government orders for armaments, lumber,
and other war goods for the defense program, which was initiated
in June 1940.
Until the first quarter o f 1941, price increases were confined
largely to primary markets and particularly to articles immedi-ately affected by defense orders, such as textiles and scrap metals.
In February 1941 consumers’ prices were only 2 percent above
August 1939, according to the Bureau o f Labor Statistics index of
consumers’ prices. In the same period prices in primary markets,
as measured by the Bureau o f Labor Statistics wholesale price
index o f about 900 commodities, had risen 7% percent. By Febru­
ary 1941, however, the cumulative effects o f the American Defense
Program were becom ing evident. Government expenditures fo r war
had increased from 2 hundred m illion dollars monthly in July 1940
to 1 billion dollars in May 1941. Business was boom ing; employ­
ment and pay rolls were higher; consumers’ purchasing power
had increased greatly. Everyone— industrial buyers, distributors,
retailers, and even the general public—was building up inven­
tories. The Lend-Lease Act was signed March 11, 1941, and in
March 1941 there began a series o f wage increases in m ajor
industries (cotton manufacturing, coal, steel, and autom obiles),
which would further raise costs and purchasing power. Conse­
quently, between February 1941 and the attack on Pearl Harbor
W artim e Prices, Part I.—August 1939 to Pearl H arlor, b y John M. Blair and
M elville J. Ulmer, under the direction o f Saul Nelson (U. S, Bureau o f Labor Statistics,
Bulletin No. 749, W ashington, 1944).


in December 1941, price increases became more widespread and
more marked. Wholesale prices in November 1941 were 23 per­
cent above August 1939 and consumers’ prices 12 percent.
Nature o f Existing Price Control
The inherent dangers to price stability were recognized at an
early date. In June 1940 an Advisory Commission was appointed
to the newly reorganized Council o f National Defense which had
functioned during W orld W ar I. Those appointed were: W illiam
S. Knudsen, in charge o f industrial production; Edward R. Stettinius, Jr., industrial materials; Sidney Hillman, labor; Chester
Davis, agriculture; Ralph Budd, transportation; Harriet Elliott,
consumer protection; and Leon Henderson, price stabilization.
Since most industries were operating far below capacity at
the inception o f the defense program, the early activities o f the
Price Stabilization Division were concerned largely with the exoansion o f supply to meet increasing Government and civilian
needs fo r goods. As factory operations increased toward capacity
and the pressure o f supplv became apparent, however, definite
action was necessary to curb price advances. Inform al agreements
were arranged, after consultations with the industries, to prevent
speculative price advances, as early as the fall o f 1940. Among
products which were inform allv controlled in this_ way were
copper, lead. zinc, aluminum, tungsten, steel, pig iron, nickel
scrap, coke, lumber, w ood pulp, farm implements, machine tools,
cotton cloth. w ool, glue, and carnauba wax.23
In addition to informal arrangements, the Price Stabilization
Division issued maximum price schedules, “ to be enforced bv
publicity and the voluntary cooperation o f industry.” * The first
o f these schedules, issued February 17, 1941, covering second­
hand machine tools; was follow ed in the next 8 weeks by similar
schedules fo r aluminum scrap and secondary aluminum ingot,
zinc scrap and secondary slab zinc, iron and steel scrap, and bitu­
minous coal. On April 11,1941. as a result o f the acceleration of
the price advance beginning in Februarv. the President established
the Office o f Price Administration and Civilian Supply, with Leon
Henderson as Administrator, “ to take all lawful steps necessary or
appropriate in order to prevent price spiralling, rising cost o f
living, profiteering, and inflation.” *
In spite o f the great increase in the duties o f the Price Admin­
istrator, this action did not increase his powers. He was com ­
pelled to rely upon publicity and public opinion fo r enforcement
o f price regulations.4* This could not insure complete compliance.
Efforts to prevent price rises fo r automobiles, fo r example, were
abandoned temporarily because o f the defiance o f one large manu­
2 First Quarterly Report fo r the Period Ended A pril 30, 1942 (Office o f Price
Adm inistration, W ashington, 1942), p. 5.
3 Idem, p. 7.
4 Progress o f Price Regulation to September 1942, by Saul Nelson (In Monthly
Labor Review, October 1942, p. 664).

The types o f measures initiated by the Office o f Price Admin­
istration and Civilian Supply to stabilize prices were outlined in
the First Quarterly Report under five general classes— suggestions
and warnings, fair price requests, “ freeze” letters, voluntary
agreements, and form al ceiling regulations.5 By August 1, 1941,
percent o f the total wholesale value o f manufactures, min­
erals, and imports lied been brought under inform al control and
an additional 10 percent under form al control.5
Since the Office o f Price Administration and Civilian Supply
was established without specific statutory authority it was handi­
capped greatly by the lack o f power to impose penalties for viola­
tions o f maximum price schedules. It became clear by the summer
o f 1941, that the pressures upon prices required m ore forceful
price control. Largely as a result o f heavy Government expendi­
tures for war, incom e payments to individuals had mounted
rapidly. Consumer expenditures had reached an annual rate o f
78 billion dollars in August 1941, compared to 65 billion dollars
before the start o f the defense program. The fact that price ad­
vances were not more serious was due to a great expansion o f out­
put. The Federal Reserve Board’s index o f industrial production,
adjusted for seasonal variation, increased from 123 percent o f its
1935-39 level in June 1940 to 167 percent by August 1941.
Controversy Regarding the Proper Method o f Control
The President o f the United States, on July 30,1941, recogniz­
ing the threat o f price inflation, requested legislative action to
strengthen the price control mechanism. Although a bill, later
termed the Emergency Price Control Act, was immediately intro­
duced in both houses o f the Congress, final action was delayed
until January 30, 1942.
One basic issue which was discussed time and again through­
out the 4 months o f hearings before the Banking and Currency
Committee o f the House o f Representatives was selective price
control versus a general ceiling. The central figures in the con­
troversy were Bernard Baruch, Chairman o f the W ar Industries
Board in W orld W ar I, advocate o f a general ceiling, and Leon
Henderson, Administrator o f the Office o f Price Administration
and Civilian Supply, advocate o f selective price control as pro­
posed in the act. Although a general freezing o f prices and wages
had been considered as early as the fall o f 1940, most economists
appeared to be opposed to such drastic action at that time. Be­
cause o f the uneven progress o f the defense program in the early
stages, selected price and wage increases were considered desirable
to stimulate output and make optimum use o f available resources.8
In the spring o f 1941 opinion still generally favored selective price
* First Quarterly Report fo r the Period Ended A pril 30, 1942 (Office o f Price
Adm inistration), p. 9.
e Some Aspects o f Price Control and Rationing, by W . W . Rostow (in Am erican
Econom ic Review, September 1942, Princeton, N. J .). (Condensation o f rem arks and dis­
cussion at the annual m eeting o f the Conference on Price Research at the National Bureau
o f Econom ic Research, May 8,1942.)
7 Price Control in Outline, b y Don D. Humphrey (in Am erican Econom ic Review ,
December 1942).

Mr. Baruch, speaking in the fall o f 1941 from his experience
during W orld W ar I, was strongly opposed to “ piece-meal” price
fixing. He argued fo r a comprehensive general ceiling “for every
price in the whole national pattern,” including “ rents, wages, in­
terest rates, commissions, fees—in short for every item and serv­
ice in commerce” 8 as o f “ some date on which normal operation o f
the law o f supply and demand can be said to have controlled
prices.” 9 He maintained that, “ since every price is a resultant o f
the combination o f all other prices it is both unjust and imprac­
tical to regulate one segment o f the industrial fabric while exempt­
ing or providing special concessions fo r other segments.” 10 In his
opinion, the goal o f price control should be the maintenance o f a
stable, balanced relationship between all prices, one which could
best be achieved by freezing relationships determined under nor­
mal supply and demand conditions. He felt that fixing prices in a
piece-meal fashion courted trouble and invited evasions. An im­
possible situation would develop when manufacturers* prices are
fixed while costs remain uncontrolled. Either ceilings are violated
or manufactm'ers cease operations because o f declining profits.
During the First W orld W ar it was found necessary continually
to extend controls to new items and new levels o f distribution.
(Up to the date o f the armistice, fully 70 percent o f the aggregate
value o f commodities included in the Bureau o f Labor Statistics
wholesale price index had been brought under form al or inform al
control.) In addition Mr. Baruch believed that a general ceiling
would prove less o f an administrative problem than piece-meal
price fixing. Under a general ceiling, he argued, there would be
less need fo r adjustment o f ceilings to correct inequalities than
under selective price control. Paradoxically, proponents o f the
selective plan used die same argument to support the opposite
Mr. Henderson conceded that a general ceiling was best from
a strictly technical standpoint. Nevertheless, he feared the enor­
mity o f the administrative problem involved, especially in view
o f his relatively small staff, saying that freezing all prices “ looks
to me an almost impossible administrative task to be begun at
once.” His theory was that if prices o f basic commodities, m ajor
semifabricated products, and ipajor manufactured articles were
effectively controlled, the pressure for price advances o f other
items, especially at later stages o f production, would be substan­
tially reduced. He felt that price inflation could be prevented by
ceilings, adequately enforced, on as few as 75 to 100 items.
Among so-called “ price-determining” articles11 fo r which ceilings
8 Taking the Profits Out o f W ar, b y Bernard M. Baruch (New York, 1936), p . 997.
9 Hearings before the Committee on Banking and Currency, House o f Representa­
tives (77th Cong.) on H.R. 5479, superseded by H.R. 5990, a B ill to Further the National
Defense and Security b y Checking Speculative and Excessive Price Rises, Price Disloca­
tions, and Inflationary Tendencies, and fo r Other Purposes, W ashington, 1941-1942.
10 Hearings before the Committee on Banking and Currency, House o f Representa­
tives (77th Cong.) on H.R. 5479, superseded by H.R. 5990 (pp. 996-997).
u Progress o f Price Regulation to September 1942, b y Saul Nelson (M onthly Labor
Review, October 1942, pp. 664-665).

would be established were such key commodities as steel, copper,
flour, lumber, and cotton grey goods, for which standard specifi­
cations could be written. Most of these commodities were pro­
duced by a relatively small number o f manufacturers, so that
there would be little need for the policing o f thousands o f smaller
firms which would have been required under Mr. Baruch’s plan.
In particular, Mr. Henderson opposed inclusion o f wage ceil­
ings in the price control law because o f the diverse problems
entailed and because be foresaw public resentment against regi­
mentation o f wages. Mr. Henderson was supported in his opposi­
tion by Isador Lubin, Commissioner o f Labor Statistics, who
Price increases that occurred up to August 1941 cannot be attributed to
the cost of meeting wage rates. Selling prices rose in advance o f wage
rates. The prices which have advanced most are for commodities that are
least affected by labor costs. In general, selling prices have risen more
than was necessary to cover the cost of wage advances, and, in fact, by
enough to cover the cost of all probable wage increases in the immediate

Dr. Lubin maintained further that price ceilings would lim it
wages indirectly, that wage increases might result in increased
efficiency and therefore reduce unit labor costs, that a wage in­
centive would be desirable to divert workers into defense jobs,
that ceilings on wages would be complicated, and that voluntary
agreements between workers and employers were preferable to
rigid government control. His view was shared by many.18 In fact,
one o f the strongest objections to Mr. Baruch’s recommendation
was the belief that the public, in this period before the attack on
Pearl Harbor, would not support such drastic measures. Mr. Hen­
derson even then recognized that future events might force a
reversal o f this viewpoint. In his testimony he said:
I could conceive o f a situation where, if we got as deeply Immersed
as England, that the bill w e have here would be highly inadequate, even
for commodity price control.1*

Example o f Canada
In further support o f his position that complete control o f
all prices should not be attempted, Mr. Henderson cited the expe­
rience o f other countries, all o f which began price control with
only partial price fixing. Although Canada’s W artime Prices and
Trade Board was given the power to control prices o f necessaries
in September 1939, it was not until August 1941 that the power
was expanded to cover prices o f all goods and services, including
final authority over prices fixed by controllers o f the Department
o f Munitions and Supply and the W artime Industries Control
12 Hearings before the Committee on Banking and Currency, House o f Representa­
tives (77th Cong.) on H.R. 5479, superseded by H.R. 5990 (p. I t41).
13 Progress o f Price Regulation to September 1942, by Saul Nelson (M onthly Labor
Review, October 1942, p. 665).
14 Hearings before the Committee on Banking and Currency, House o f Representa­
tives (77th Cong.) on H.R. 5479, superseded by H.R. 5990 (p. 875).

Board.18 During the first 2 years o f the war, Canada relied upon
control o f supply, and price regulations were issued sparingly and
only as such action became unavoidable.10
Canada’s general ceiling order was not announced until Oc­
tober 18, 1941,1
9and did not becom e effective until December 1.
It applied to all goods and services, except exports and military
purchases, as well as to wages and rentals. It established each
seller’s maximum price as his highest selling price between Sep­
tember 15 and October 11,1941, for items o f the same kind and
quality. Provisions fo r a wage bonus o f 25 cents a week fo r each
increase in the cost o f living o f 1 percent above August 1939, al­
ready in effect fo r war industries, were extended to all industries.18
This order invoked considerable discussion in the United
States, where hearings on the price control bill were still in prog­
ress. In the month o f October 1941 the index o f wholesale prices
o f the Dominion Bureau o f Statistics was 29 percent above its
August 1939 level, but this advance was only 6 percent greater
than the advance over the same period in the United States.1* It is
curious, therefore, that at the particular time when Canada aban­
doned its selective price control policy in favor o f a general ceiling,
which was later to becom e the m odel fo r the General Maximum
Price Regulation, the United States, after prolonged consideration,
adopted the selective type o f price control.
Canada was by that time “ econom ically prepared” and “ psy­
chologically ready2”—in Mr. Henderson’s words.** . The country
was actually at w ar; taxes were far higher than in the United
States; profits were diminishing; wages in war industries were
already tied to the cost o f living. Forty-four percent o f Canadian
production was devoted to war purposes compared to 15 percent
at that time in the United States. It was felt that administrative
problems in Canada could not be,as great as in a country o f the
size o f the United States and, moreover, that Canada’s W artime
Prices and Trade Board was better staffed and equipped to cope
with a suddenly expanded program than its United States counter­
part, the Office o f r a c e Administration and Civilian Supply.^ Fur­
thermore, Canada had relied upon selective price control in the
early stages o f her war program, when presumably some price
increases were desirable to encourage increased production. It
was thought, therefore, that the Canadian action by no means
contradicted the desirability o f continuing selective price control
in the United States.
Orders in Council, P.C. 2516, P.C. 3968, and P.C. 6834; The W artim e Prices and
Trade Board Regulations, September 3, 1939, Decem ber 5, 1939; and August 28, 1941
(Ottawa, Canada).
is W artime Controls in Canada, Department o f Munitions and Supply, March 9,
1942 (Ottawa, Canada) p. 5 ; and W ar-Tim e Control o f P rices,'b y Kennedy W . Taylor (in
Canadian W ar Econom ics, Toronto, Canada, 1941).
17 Broadcast b y Bight Hon. W . L. Mackenzie King, M.P., Prim e M inister o f Canada,
October 18, 1941.
is Orders In Council, P.C. 8253; W artim e Wages and Cost o f Living Bonus Order,
October 24,1941; and P.C. 8527, The Maximum Prices Regulations, November 1,1941.
19 New York Tim es (New Y ork), November 9, 1941.
20OPA Release, PM 1421 (W ashington), October 22, 1941.

Influence o f Pearl Harbor
The attack on Pearl Harbor altered the whole American econ­
om y. In the President’s budget message to Congress on January
7, 1942, Government expenditures for war were estimated at 53
billion^ dollars fo r the fiscal year ended June 30, 1943, as against
24 billion dollars fo r the fiscal year 1942. The message indicated
the eventual concentration o f at least one-half o f national produc­
tion on the war effort, compared with about one-fifth at the time
o f the message. According to the First Quarterly Report o f the
Office o f Price Administration, this fact alone spelled^ the end o f
selective price control, for it was obvious that productive capacity
would be fully utilized, scarcities would spread from consumer
durable goods to “ virtually every type o f product,” and expanded
incomes would invite increased demand fo r a declining volum e o f
civilian goods.
Emergency Price Control Act
The Emergency Price Control Act o f 1942, signed by the
President January 30, 1942, gave to the Office o f Price Adminis­
tration statutory power to stabilize prices and rents and authority
to punish violators. The Price Administrator was authorized after
proper investigation and consultation to establish “ fair and equit­
able” maximum prices, but was directed to give consideration to
prices prevailing between October 1 and October 15, 1941. Price
schedules already issued were expressly continued in force.
Special limitations were placed upon his powers with respect to
agricultural commodities. Ceilings could not be fixed below the
highest o f the follow ing levels as determined by the Secretary
o f Agriculture:
(1) 110
(2) the
(3) the
(4) the

percentum of the parity price . . . ;
market price . . . on October 1, 1941;
market price . . . on December 15, 1941; or
average price . . . during the period o f July 1, 1919, to June

In addition, ceilings could not be established for articles man­
ufactured wholly or substantially from agricultural commodities
below a price which would reflect to producers the highest o f these
four levels.2
3 Moreover, ceilings were subject to the approval of
the Secretary o f Agriculture.28
Policy on wages was expressed in these words:
It shall be the policy o f those departments and agencies o f the Gov­
ernment dealing with wages (including the Department o f Labor and its
various bureaus; the War Department; the Navy Department; the War
Production Board, the National Labor Relations Board, and the National
Mediation Board, the National War Labor Board, and others heretofore or
hereafter created) within their limits of authority and jurisdiction to
21 Emergency Price Control Act o f 1912, see. 3 (a ). (P u blic, No, 421, 77th Cong., 2d
sess.), W ashington, 1912.
22 Idem , sec. 3 (c).
23 Idem , sec. 3\e)»

work toward a stabilization of prices, fair and equitable wages, and cost
o f production.

Four principal methods o f enforcement o f price regulations were
provided in the act: Criminal proceedings, injunctions and com ­
pliance orders, licensing, and suits for treble damages.23
Pressures on Price Level in February-March 1 9 4 2
In the first quarter, 1942, it was evident that drastic price rises
threatened and that piece-meal price fixing would no longer suf­
fice. As a result o f expanding war production, employment in
manufacturing industries had increased one-third since August
1939, hourly earnings had increased one-quarter, and income pay­
ments to individuals one-half. Corporate profits before taxes were
up 171 percent, and corporate profits after taxes 91 percent. Gov­
ernment expenditures fo r war had increased from less than 200
million dollars in July 1940 to 2 billion dollars in January 1942
and 3 billion dollars in March 1942. Monthly expenditures o f 6
billion dollars by the end o f 1942 were in prospect.24 The first
wave o f wage increases beginning in May 1011— together with
overtime pay, upgrading o f workers, and other factors— had
raised average hourly earnings in factories 11 percent between
May .1941 and March 1942. Since wage contracts were tradition­
ally renewed in the spring, it was felt that a second wave o f wage
increases to meet the increase in the cost o f living since the spring
o f 1941 was immiment.25
Coupled with these inflationary demand factors were pros­
pects for greatly reduced supplies o f consumer goods. Output o f
civilian goods, which had risen about 25 percent from August 1939
to August 1941, began to contract about that time. Curtailment
orders were issued fo r many durable goods, such as automobiles,
refrigerators, vacuum cleaners, and others. By March 1942 civil­
ian consumption had been reduced by 8 percent from its level in
August 1941 and further shrinkage in civilian supplies was antici­
pated with the conversion o f 50 percent o f national production to
war goods.2®
The impact o f increasing demand and decreasing supplies
gives rise to what has been termed the “ inflationary gap,” the
difference between civilian purchasing power and the supply o f
goods and services available for civilians. In early 1942 the
amount o f this gap fo r the calendar year 1942 was estimated at
17 billion dollars.22
Trend o f Prices
These.conditions in the American econom y o f early 1942 re­
sulted in an accelerated rate of price increases in sharp contrast
23 Emergency Price Control A ct o f 1942, sec. 3 (e). (P ublic, No. 421, 77th Cong., 2d
sess.), W ashington, 1942.
24 First Quarterly Report fo r the Period ended A pril 30,1942- (Office o f Price Adm in­
istration), pp. 23-29.
25 Idem , p. 29.
27 Idem , p.218.
Idem,, pp..27.

to the steady but slower advance up to the time o f the attack on
Pearl Harbor. By March 1942, the Bureau o f Labor Statistics
index o f the prices o f 28 basic commodities was 66 percent above
its August 1939 level, the comprehensive wholesale price index
30 percent, and the consumers* price index 16 percent. (See Appen­
dix tables 5 and 6.) These price advances closely-paralleled in
scope and timing those which occurred during W orld W ar I.*®
Furthermore, the rate o f increase had' been much greater since
December 1941, despite the extension o f selective controls. Between
August 1939 and November 1941 the average monthly rate o f
increase was 0.9 percent for wholesale prices and 0.4 percent for
consumers* prices compared with 1.4 and 0.9 percent, respectively,
between November 1941 and March 1942. Not only were the price
advances greater but they extended over a wider field. At the
wholesale level they no longer were confined to individual com ­
modities or even to industrial goods needed fo r direct war use. The
greatest increases in wholesale prices after August 1939 were for
farm products, foods, and textiles (all consumer goods), having
risen, respectively, 69 percent, 43 percent, and 43 percent, by
March 1942. The spread o f price increases to the retail field was
particularly alarming; in the 3 months from December 15,1941,
to March 15,1942, consumers* prices as a whole rose 3% percent,
foods 5 percent, and clothing 8 percent. From February to March
retail price increases were widespread, particularly fo r clothing
and housefurnishings.
The behavior o f commodities under price control contrasted
sharply with that o f commodities not controlled. According to an
OPA analysis,®* the Bureau o f Labor Statistics wholesale price
index rose 17 percent as a whole from April 1941 to March 1942;
uncontrolled commodities in the index, 20 percent; commodities
subject to form al control, only 1.5 percent; and commodities sub­
ject to inform al control, 16 percent. Furthermore, two items,
petroleum and automobiles, accounted for most o f the advance
fo r commodities inform ally controlled. Omitting these two com ­
modities, this portion o f the index •was highly stable. The effec­
tiveness o f selective price control, the purpose o f which might be
deemed the control o f relative prices rather than o f the general
price level, was expressed in these words:
Selective price control has been strikingly successful in stabilizing
those prices upon which controls were imposed, once the action was

Inadequacy o f Existing Price Control
Price increases for uncontrolled commodities were respon­
sible for a continued rise in the general price leveL In December
1941 only 13.3 percent o f the value o f commodities in the Bureau2
28 Progress o f Price Regulatiou to September 1942, b y Saul Nelson (M onthly Labor
Review, October 1942, pp. 660-663).
29 The Effectiveness o f Selective Price Control (D ivision o f Research, Price Analysis
and Review Branch, Office o f Price Adm inistration, W ashington, May 1, 1942).
30 The Effectiveness o f Selective Price Control (D ivision o f Research, Price Analysis
and Review* Branch, Office o f Price Adm inistration, W ashington, May 1, 1942), p . 1.

o f Labor Statistics wholesale price index was under form al con­
trol and 14.7 percent under inform al control. Although immediate
steps to extend selective price control were taken after the United
States entered the war, by March 1942 only one-third o f the Bureau
o f Labor Statistics index was under form al and one-eighth under
inform al control.*1
The need for m ore decisive action on a broad scale was evi­
dent. During the period up to the declaration of war, the estab­
lishment o f ceilings fo r the relatively few items which actually
had experienced rapid price increases had seemed the most prac­
ticable method o f price control. As expressed by OPA,82 “ when
the commodities requiring price control were limited in number,
price control could be limited in scope” ; and again, “ the defense
program produced an uneven pressure on prices and called for
selective price control.”
By early 1942, however, the pace o f advances was too rapid
to admit o f further extension o f selective controls. Commodities
already controlled at wholesale represented largely basic m ajor
products which required a minimum o f separate simple sched­
ules; those still uncontrolled included numerous items o f lesser
individual importance (though o f equal aggregate value), and
many highly fabricated articles requiring com plex ceiling orders.
Control at retail presented even more perplexing problems— mil­
lions o f sellers, a great variety o f products, and complicated local
differences. It also should be remembered that the OPA staff was
still inexperienced, having been expanded from 529 on July 1,
1941, to 1,500 on January 31,1942, and to 3,711 on April 30,1942.**
Furthermore, according to OPA, “ the legal formalities surround­
ing the transition to a statutory basis, including republication o f
the prestatutory price schedules and setting up o f legal procedures
for complaint and appeal, slowed down the pace o f form al action.”
Because o f the accumulating pressures on the price level and
because o f the “ extremely difficult mechanical and administrative
problems” involved in extending price control to the remainder
o f the economy on a piece-meal basis, “ selective price control had
to yield to a general ceiling.” 8* Possibly this decision was also influ­
enced by the doubtful outlook fo r effective monetary and fiscal
policy in the spring o f 1942.** Accordingly, on April 28, 1942, fo l­
lowing the example o f Canada, the Office o f Price Administration
issued the General Maximum Price Regulation (hereinafter re­
ferred to as “ GMPR” ), after discussions and consultations with
industry representatives which had been begun early in April.3
31 First Quarterly Report fo r the Period ended A pril 30,1942 (Office o f Price Adm in­
istration), p. 24.
32 Facing the Price Problem (D ivision o f Research, Office o f Price Adm inistration,
Washington, A pril 23, 1942), pp. 34 and 36.
33 Second Report o f the Office o f Price Adm inistration Covering the Operations o f
the Office between May 1 and July 31,1942, House Document No. 891 (77th Cong., 2d sess.),
Washington, 1942 (p. 88).
34 First Quarterly Report fo r the Period ended A pril 30, 1942 (Office o f Price Ad­
m inistration), pp. 24 and 30.
35 The Tactics o f Retail price Control, b y John Perry M iller (in Quarterly Journal
o f Economics, Boston, August 1943, p. 498).

Chapter 3 .—Provisions o f the General Maximum
Price Regulation
This regulation, together with a companion order on rents,
gave force to one o f the points in President Roosevelt’s seven-point
campaign to keep down the cost o f living, which was outlined in
his- message to Congress on April 27,1942, and his “ fireside chat”
to the American people the next day. Briefly, the regulation set
the ceiling for each seller as the highest price charged in March
1942 to the same class o f consumer. It became effective on May
11,1942, for manufacturers and wholesalers, on May 18,1942, fo r
retailers, and on July 1, 1942, for services. Its terms were not
applicable to any items covered by other price regulations.
Limitations o f Emergency Price Control Act
Planned as “ an absolute ceiling over virtually everything that
Americans eat, wear, and use,” 1 certain exceptions, which were
seriously to limit its effectiveness, were enforced by the terms o f
the Emergency Price Control Act and others were made for ad­
ministrative or practical reasons. Among the exceptions were
commodities such as advertising, newspapers, books, magazines,
m otion pictures, wages, com mon-carrier and public-utility rates,
insurance, and real estate, all o f which were excluded because o f
the definition o f “ com modity” in the act.2*4 Of such especial signifi­
cance that they were later to require amendment o f the Emer­
gency Price Control Act and extensive use o f subsidies to hold
down the cost o f living were unprocessed farm products and cer­
tain foods, exempted because the act did not permit control o f
agricultural commodities until their prices had attained a level
substantially above “ parity.” 2
Possibly o f equal importance was the exemption o f wages.
Exclusion o f wages from GMPR was necessitated by the terms o f
the act.* Moreover, Mr. Henderson’s opposition to control o f
1 First Quarterly Report fo r the Period ended A pril 30, 1942 (Office o f P rice Adm in­
istration), p. 36.
2 Sec. 302(c), Em ergency Price Control Act o f 1942 (P ublic, No. 421, 77th Cong., 2d
“ The term ‘ commodity* means com m odities, articles, products, and m aterials (ex­
cept m aterials furnished fo r publication by any press association or feature service,
books, magaziues, m otion pictures, periodicals and newspapers, other than as waste or
scrap), . . . Provided, That nothing in this act shall be construed to authorize the regu­
lation o f (1) com pensation paid by an em ployer to any o f his em ployees, or (2) rates
charged b y any common carrier or other public utility, o? (3) rates charged b y any
person engaged in the business o f selling or underwriting insurance, or (4) rates charged
by any person engaged in the business o f operating or publishing a newspaper, periodical,
or magazine, or operating a radio-broadcasting station, a m otion-picture or other theatre
enterprise, or outdoor advertising facilities, or (5) rates charged fo r any professional
ft Sec. 3, Emergency Price Control Act (P ublic, No. 421, 77th Cong., 2d sess.):
“ (c) No maximum price shall be established or maintained fo r any com m odity
processed or m anufactured in whole or substantial part from any agricultural com mod­
ity below a price which w ill reflect to producers o f such agricultural com m odity a price
for such agricultural com m odity equal to the highest price therefor specified in sub­
section (a).**
4 Sec. 302(c), Emergency Price Control Act o f 1942 (P ublic, No. 421, 77th Cong., 2d

wages by the Price Administrator was expressed repeatedly in the
hearings on the price control bill. That wages were not effectively
controlled until a much later date entailed serious problems for
price control. Rising wages exerted continual pressure on the
price level and compelled numerous upward adjustments o f
Commodities exempted for practical or administrative rea­
sons included highly seasonal articles, such as fresh fish, and
objects o f art, for which it would be difficult to determine fair
prices; primary raw materials, such as timber, prices o f which
are controlled indiriectly by ceilings at later stages o f production;
and commodities covered by other OPA regulations. Sales under
certain conditions were also exempted for practical reasons: Food
prepared and sold for consumption on the premises, used personal
effects when sold at auction or by the owner, used business sup­
plies not acquired for the purpose of sale, sales fo r philanthropic
purposes, processed farm commodities or pelts and furs o f wild
animals when sold by farmer or trapper, provided the total sales
did not exceed $75 in any one month. Provision was also made
for later exemptions, including sales to the Government, under
supplementary regulations.
Determination o f Ceiling

The reasons fo r the selection of the month o f March 1942
were not necessarily restrictive. Some other base period might
have proven equally effective. As expressed in the Statement o f
Considerations which accompanied the General Maximum Price
Regulation, “ the selection o f one base period rather than another
is a matter for reasonable administrative determination.” It was
felt that a period as near as possible to the date o f issuance o f the
regulation would cause the least disruption o f business activities
and the fewest administrative difficulties. Considerable time was
needed, howeyer, fo r thoughtful consideration o f the problems
entailed and fo r consultation and meeting with trade groups.
Furthermore, there were indications that some price increases had
been made deliberately during March and April in anticipation o f
broader price control. The plan for a general retail freeze was
openly discussed in the press in early April.® The net result o f
these considerations was the selection o f March 1942, despite the
provision in the Price Control Act that maximum prices reflect,
insofar as practicable, the level o f prices between October 1 and
October 15,1941. It was not expected that absolute equities could
be realized in this first step; in fact it was stated that—
Supplementary regulations which cannot practicably be analyzed sepa­
rately at this time, may establish prices closer to October 1 prices as
5 See, fo r exam ple, W all Street Journal (New Y ork ), A pril 2, 1942, and Journal o f
Commerce (New Y ork), A pril 6, 1942.
6 Statement o f Considerations Involved in the Issuance o f the General Maximum
Price Regulation (Office o f Price Adm inistration, W ashington, 1942),


098255— JO

A calendar month was selected because records o f so many busi­
ness concerns are maintained on that basis.
Although the price structure in early 1942 was admittedly
imperfect, it did represent relationships during a period o f vir­
tually full employment. It was alleged, m oreover, that “ more
nearly than at any time during the last decade, today’s price
structure approaches the balance that is required fo r the econom y
to function efficiently.” 78
9 The justice o f this contention is sup­
ported by an analysis® o f the March 1942 price structure by Don
D. Humphrey. Chief o f the Price Analysis and Review Branch,
Research Division, Office o f Price Administration, along the lines
suggested some years ago by Gardiner Means* study o f “ adminis­
tration dominated” and “ market dominated” prices.® Mr. Hum­
phrey’s conclusion was that the depression-created spread between
sensitive and insensitive wholesale prices had virtually disappeared
by March 1942 and that prices had reached both the level and
horizontal balance o f predepression days.
Although simple in concept, the definition o f the “ highest
price charged in March 1942” required lengthy explanation in
Bulletin No. 1— The General Maximum Price Regulation, and in
Bulletin No. 2—W hat Every Retailer Should Know About the
General Maximum Price Regulation. An attempt was made to
anticipate all contingencies and to regulate against all possible
evasions o f the intent o f the order. Nevertheless, as w ill be seen
later, noncompliance with OPA regulations may have been caused
as much by confusion as by w illful violation.
In contrast, Canada’s entire “ Maximum Prices Regulations,” 10
which was the m odel fo r the United States order, was only three
pages long and the definition o f maximum prices only one page.
This brevity was attained in part by greater reliance upon the
obvious intent o f the regulation. Thus, in connection with the
determination o f maximum prices fo r goods not sold in the base
period on the basis o f prices for similar goods, it is stated—
In any case in which the question arises as to the lawful price for any
such goods or services the onus o f proving the existence and extent o f any
relevant and substantial similarity or dissimilarity alleged by the seller
or supplier shall be upon him.
7 Facing the Price Problem (D ivision o f Research, Office o f Price Adm inistration,
A pril 23, 1942), p. 38.
8 Price Control in Outline, b y Don D. Humphrey (in Am erican Econom ic Review,
Decem ber, 1942),
9 See Structure o f the Am erican Economy (National Resources Committee, Wash­
ington, June 1939, p. 389), This study showed a high degree o f correlation between the
frequency and magnitude o f price change. Commodities included in the BLS wholesale
price index were classified into 5 groups, A, R, C, D, and E, w ith those showing the
few est changes in group A (adm inistration-dom inated) and those showing the most
frequent changes in group E (m arket-dom inated). Price indexes on a 1926-29 base for
the year 1932 and fo r March 1942 are com pared below fo r these groups:
Number o f monthly
changes In price,
Jan. 1926 - Dec. 1933
Group A ................................................
Group B .............
Group C ................................................
Group D ............................................
Group E ............................
io Order in CounciJ, P.C. 8527, November 1, 1941,

W holesale price indexes
(1926-29 = 100)
March 1942

The United States regulation, in contrast, attempts a rigid defini­
tion o f “ similar” commodities and services, as follow s:
One commodity shall be deemed “ similar” to another commodity, if
the first has the same use as the second, affords the purchaser fairly
equivalent serviceability, and belongs to a type which would ordinarily
be sold in the same price line. In determining the similarity o f such com­
modities, differences merely in style or design which do not substantially
affect use, o r serviceability, or the price line in which such commodities
woujd ordinarily have been sold, shall not be taken into account. One
service shall be deemed “ similar” to another service if the first has the
same use and purpose as the second and belongs to a type which would
ordinarily be sold for the same or substantially the same price.

The determination o f the ceiling price rests upon what has
been called the “ progressive pricing form ula,” a series o f alterna­
tive methods each o f which in turn theoretically precludes the use
o f those which follow . Thus, if possible, the highest price charged
in March means the top price for which the same article was
delivered during March 1942; if no delivery was made, the highest
offering price in March 1942. Many articles, however, were not
sold in March 1942. If the same article was not delivered or
offered fo r sale in March, the maximum price is successively the
highest price fo r the most similar article delivered in March, or
offered fo r sale in March. Frequently no similar article was sold
in March. In such cases the maximum price is the highest price
charged by the most closely competitive seller o f the same class.
For new articles which cannot be priced under any o f the above
methods, manufacturers (under the original provisions) must
apply to OPA fo r maximum prices; wholesalers and retailers may
calculate their own maximum prices by adding the margin on the
fastest-moving comparable com modity o f the same general classi­
fication to the replacement cost o f the new item. Customary allow­
ances, discounts, and other price differentials must be continued
in all cases.
Record-Keeping and Posting
The regulation included certain record-keeping and price­
posting requirements. All sellers were asked to keep base period
records and to prepare lists o f all items sold in March 1942 show­
ing the highest prices charged as well as customary allowances
and discounts. Retailers were required to display ceiling prices on
items designated in the regulation as cost-of-Uving commodities so
as to be “ clearly visible” to the customers. Although this require­
ment was expected to aid enforcement, its purpose was largely
psychological, to show the consumer “ (1) that his cost o f living
is not rising and (2) that the retailer is perform ing an important
role in the battle against inflation on the home front.” 11 It was a
part o f OPA’s program to “ sell” price control to the American
public.' There was no assurance that posted prices were the legal
Bulletin No, 2 : W hat Every Retailer Should Know About the General Maximum
Price Regulation (Office o f Price Adm inistration* W ashington, May 1942),

ceilings and there is little evidence that posting o f GMPR ceiling
prices contributed materially to the enforcement o f the regulation.
As w ill be steen later, some retailers raised their posted prices, as
convenient. Moreover, the burden o f record-keeping and posting
caused considerable irritation and a certain lack o f cooperation.
All wholesalers and retailers were required to register their
establishments with OPA and were automatically licensed by the
OPA to sell commodities or s e r v ic e s covered by the regulations.
Penalties for infraction o f the regulation were those provided
in the Emergency Price Control Act and consisted o f criminal
proceedings, civil suits, revocation or suspension o f licenses, and
suits for treble damages. One feature o f the regulation was that
both buyer and seller were adjudged guilty of violation in cases
o f sales* above ceiling. This later made it difficult fo r OPA to
obtain reports (from buyers) o f violations o f regulations.
Provisions for Adjustments
Since the GMPR was deemed an emergency measure, numer­
ous adjustments were anticipated. In particular it was recognized
that the normal tendency for retail prices to lag behind whole­
sale prices, wholesale behind manufacturers’, and prices o f fin­
ished goods behind those o f raw materials, would cause maladjust­
ments. Provision for the alleviation o f the resultant squeeze
between costs and selling prices was specifically included in the
regulation under section 4, as follow s:
If the maximum prices established for any commodity under the
provisions o f this regulation fail equitably to distribute returns from the
sale at retail o f such commodity among producers, manufacturers, whole­
salers, and retailers, the Price Administrator will by supplementary regu­
lation establish such maximum prices for different classes o f sellers, or
fix such base periods for the determination o f their maximum prices, as
will insure that each such class o f sellers shall receive a fair share of
such return.

It was the intention o f OPA that, as in Canada, such adjust­
ments would be made backward rather than forward, i.e., “ by
rolling back the squeeze.” The Statement o f Considerations ac­
companying the regulation contains this statement: “ One thing
should be clearly understood. Retail prices will not be increased.
. . . Adjustments may be made. . . . But the ceiling w ill not be
punctured.” It was proposed to accomplish this in several ways:
by compelling manufacturers, wholesalers, and retailers to absorb
appropriate parts o f the squeeze, by effecting economies in manu

factoring and distribution, and Anally, if necessary, by the use o f
Government subsidies.12
In addition to section 4, which deals specifically with toe
retail squeeze, section 18 o f toe regulation, known as toe ‘’hard­
ship” clause, outlines a procedure foi* adjustment o f inequities at
the retail level, both for an individual merchant whose maximum
prices were abnormally low in relation to his competitors’, and
for groups o f retailers whose maximum prices were low in rela­
tion to prices at other levels o f distribution. Section 19 provides
for petitions for other adjustments.

Chapter 4. —Amendments and Subsequent
Very soon it became evident that issuance o f the General
Maximum Price Regulation had halted only temporarily toe up­
ward movement o f prices. Reference was made in OPA’s second
report o f operations to toe continued rise o f wholesale prices and
the cost o f living and to “ toe basic weaknesses in toe program to
control prices,” by which was meant the agricultural limitations
o f toe Emergency Price Control Act, failure to stabilize wages and
incomes, and failure to institute adequate taxation, savings, and
other fiscal programs to reduce consumers’ purchasing power,
none o f which, it w ill be noted, were inherent in the General
Maximum Price Regulation.1*
In the third quarterly report it was stated:
In spite o f the General Maximum Price Regulation, the outlook for
inflation control at the close o f the summer was very bleak. Although
the prices brought under control by the GMPR were held firmly, the
prices, which, b y reason o f the limitations o f section 3 o f the Emergency
Price Control Act, could not be controlled continued to rise, indeed at an
accelerating ra te.. . . Only immediate stabilization could prevent a resump­
tion of the wage-cost spiral, which had been temporarily halted b y tne
GMPR in May.14

Amendment to the Emergency Price Control Act
The urgency o f toe situation resulted in passage o f toe amend­
ment to the Emergency Price Control Act by Congress on October
2, 1942, in response to toe President’s message to Congress on
September 7. This action, o f m ajor importance in the battle
against inflation,, made possible both a. broad extension o f price
control and the stabilization o f wages. The original provision in
toe Price Control Act prohibiting ceilings on agricultural com ­
modities below 110 percent of. parity was amended to permit toe
12 First Quarterly Report fo r the Period ended A pril 30, 1942 (Office of: Price A d­
m inistration), pp. 44-46.
13 Second Report o f the Office o f Price Adm inistration, covering the operations o f
the Office between May 1 and July 31,1942 (House Doc. No. 891, 77th: Cong., 2d sessi),_p. 3.
. 14 Third Quarterly Report fo r the Period ended October 31, 1942 (Office or Price
Adm inistration, W ashington, 1943), p . 1.

establishment o f ceilings either at parity or the highest market
price between January 1 and September 15,1942, whichever was
higher. In regard to wages, the President was authorized to sta­
bilize wages and salaries insofar as practicable at the level o f
September 15, 1942.
The President’s Executive Order o f October 3,1942,* creating
the Office o f Econom ic Stabilization, with form er Supreme Court
Justice James F. Byrnes as Director, was an even more farreaching move. It specifically directed (1) the Secretary o f Agri­
culture and the Price Administrator jointly to stabilize agricul­
tural prices and (2) the National W ar Labor Board, wages, insofar
as practicable at the level o f September 15, 1942. Significantly,
the 100 percent o f parity regulation was interpreted to mean
parity less benefit payments. The order directed the Price Admin­
istrator to determine price ceilings so that “ profits are prevented
which in his judgment are unreasonable or exorbitant.” It also
authorized the use o f subsidies either to insure maximum produc­
tion or to maintain ceiling prices. Actually, although it was not so
used, it set up the machinery fo r the control o f all financial
transactions as well as the sale o f all goods and services. The.Di­
rector o f Econom ic Stabilization was ordered to formulate "com ­
prehensive national econom ic policy relating to the control o f
civilian purchasing power, prices, rents, wages, salaries, profits,
rationing, subsidies, and all related matters—all fo r the purpose o f
preventing avoidable increases in the cost o f living.” Immediately
follow ing the President’s order, the OPA, on October 5, 1942,
placed poultry, butter, cheese, evaporated milk, eggs, wheat flour,
corn meal, onions, navy beans, and oranges under control at
wholesale and retail by a new price regulation, raising the propor­
tion o f foods controlled at retail from 60 to 90 percent.*4
Amendment o f the General Maximum Price Regulation
During the first months o f operation under the regula­
tion, three m ajor limitations o f the general freeze technique be­
came “ clearly manifest” . These were well expressed by OPA as
follow s:
1. Since all prices in March 1942 did not bear a normal relationship
to one another, the GMPR had the effect o f freezing dislocations in the
price structure.
2. Some m ajor items o f cost—primarily labor and agricultural com­
modities—were not controlled or were inadequately controlled, and
increases in these costs pressed against the ceiling prices, squeezing the
trade badly in many cases. In addition, OPA authorized increases in raw
material prices which had similar effects. The squeeze necessitated many
adjustments that absorbed much o f the time o f the Office.
3. Almost insurmountable difficulties o f administration w ere en­
countered in those cases where market practices are complex and the
commodity is subject to a large measure o f variability. In addition, pricing
8 Executive O rder N o. 9250 (W a sh in gton ), O ctober 3 , 1942.
4 T hird Q uarterly R eport to r the Period ended October 31, 1942 (O ffice o f P rice
A dm in istration ), p . 2 .

methods and extent o f coverage under the GMPR sometimes were not
clearly understood b y the seller, and caused unintentional violations.5

Revision o f the regulation in regard to specific commodities
or conditions o f sale was required frequently. At the end o f 1943,
there had been issued 59 amendments, 15 supplementary regula­
tions, 476 amendments to supplementary regulations, 625 orders
under section 1499.3(b) o f GMPR authorizing maximum prices,
24S orders under section 1499.18(b) and 190 under section
1499.18(c) o f GMPR adjusting maximum prices, and 185 orders
under supplementary regulations.
Some o f these actions were o f m ajor importance. Revised
Supplementary Regulation No. 1 contains all the exemptions o f
commodities from the General Maximum Price Regulation. W ith
its 39 amendments up to the end o f 1943, it filled about 20 pages
in “ OPA Service,” voluminous loose-leaf compilation o f all OPA
regulations. Similarly, Revised Supplementary Regulation No. 11
lists all the services exempt from GMPR, which totaled 138 by the
end o f 1943. Am ong the commodities and services exempted by
these supplementary regulations were: imported silk waste, cotton
m ill wastes, sales o f all waste materials up to the level o f the in­
dustrial consumer; zinc, lead, and tin industrial residues; anti­
m ony ore and concentrates; jewel bearings; certain machines
manufactured under subcontract; greenstuffs used fo r Christmas
decorations; sales by nonprofit agencies o f articles manufactured
by blind persons; dead or fallen animals; services covered under
Maximum Price Regulation No. 165; etc.
Of particular significance was Supplementary Regulation No.
4, originally issued on May 13,1942, which deals with the exemp­
tion of military commodities. Despite the example o f Canada,
which had exempted military commodities from its “ Maximum
Prices Regulations” (see Order in Council, P.C. 8527), and the
opposition o f military procurement agencies, OPA had hoped
that, at the time GMPR was issued, it could exercise effective price
control over military procurement. It soon recognized, however,
that “ the General Maximum Price Regulation was not well suited
to the pricing o f most m ilitary equipment.” ® Military equipment
must be produced to rigid but changing specifications and its pro­
duction must not be impeded by inadequate pricing. The Army,
Navy, Maritime Commission, and other Government procurement
agencies maintained that higher prices to marginal producers
must be permitted, if necessary. Because o f these considerations,
section 9 o f the regulation had provided fo r the exclusion o f “ sales
to the United States or any agency thereof o f such commodities
or in such transactions as may be specified by supplementary
regulations issued under this section.” Under Supplementary
Regulation No. 4, “ developmental” and “ secret” contracts with
the Government, “ emergency purchases,” and sales to the Govern­
ment o f a comprehensive list o f finished goods, including combat*6
. . . * Fourth Quarterly Report fo r the Period ended January 81, 1943 (Office o f Price
Adm inistration, W ashington, 1943), p . 33.
6 Second Report o i the Office o f Price Adm inistration, p. 39*

items, foods, and clothing, were exempted from GMPR. OPA re­
tained control over raw materials and semifabricated articles, but
by use o f subsidies, as in the case o f metals, or by other means,
military articles have been exempted from price control by OPA,
wherever necessary. In September 1942, OPA agreed to delegate
responsibility to the military services for price control over purely
military items purchased by them but reserved the right to resume
such responsibility if prices of military goods were not effectively
controlled. This extensive exemption o f military items, as w ill be
seen later, exerted an inflationary pressure on prices in other seg­
ments o f the econom y through the medium o f demands fo r higher
In sharp contrast to the numerous exemptions from GMPR
were the few items subsequently brought under the regulation.
In conform ity with OPA’s general policy o f superseding -GMPR
as rapidly as possible, new items were usually brought under price
control immediately by specific regulations.
Modifications o f maximum prices under GMPR are made
under Supplementary Regulation 14. The revised regulation in­
corporating all the provisions o f the original supplementary regu­
lation and its numerous amendments, and including 70 additional
amendments, takes up over 175 pages in OPA Service. Modifica­
tions o f maximum prices were made frequently in terms o f spe­
cific dollars-and-cents ceilings. For convenience, maximum prices
for milk and milk products and bread and bakery products are
contained in separate Supplementary^ Regulations 14A and 14B,
respectively. Supplementary Regulation 14A. alone requires 100
additional pages in OPA Service.
Many o f the amendments to GMPR were simply clarifications
o f definitions or terms o f the original regulation. Others ex­
empted sales o f certain commodities or services from control, and
as such have been incorporated in Supplementary Regulations 1
and 11. Three amendments, however, are o f m ore general im por­
tance. Amendment No. 10 extended to manufacturers and whole­
salers the same opportunity originally accorded retailers o f ob­
taining relief from GMPR ceilings in case o f hardship and also
facilitated the procedure for obtaining such relief. Amendment
No. 33, effective November 4, 1942, represented a change in OPA
policy regarding adjustments. Formerly OPA had devoted con­
siderable time to the adjustment o f maximum prices fo r individ­
ual sellers and, up to the date o f this amendment, had already
processed “ thousands” o f applications under Paragraph 1499.18
o f the regulation.7 By this amendment OPA gave warning that
m ajor emphasis in the future would be on regulations or adjust­
ments o f general application only, and that after November 30,
1942, adjustment o f maximum prices for an individual' seller
would be made in exceptional cases only, hi the same vein was
Amendment No. 54, which granted manufacturers the same
privilege already accorded wholesalers and retailers o f determin­
7 Statement o f Considerations, Amendment No. 33, General Maximum Price Regu­
lation (W ashington), November 4, 1942.

ing maximum prices fo r a new product not sold by them or by
their competitors in March 1942 on the basis o f cost plus the
mark-up on a comparable commodity. Originally manufacturers
had been required to apply to OPA for approval o f specific prices.
Removal o f Commodities From GMPR
W ithin 6 or 7 months after May 1942, individual regulations
replaced GMPR to a great extent.8 Most o f the commodities cov­
ered by the 123 specific regulations issued between August 1,1942,
and January 31,1943, for example, had originally been controlled
by GMPR.® OPA’s Directory o f Commodities and Services, cor­
rected through March 15,1943, shows clearly the degree to which
GMPR had at that time already been superseded by specific regu­
lations. The tabulation which follow s, arranged according to
organizational division in the Office o f Price Administration,
shows that, out o f m ore than 5,000 commodities listed, only 1,400
were governed entirely by GMPR as o f March 15, 1943, 1,650 by
specific regulations, and 2,000 partly by GMPR and partly by
specific regulations. In only a few sectors, notably chemicals and
drugs and nonferrous metals, were appreciable proportions still
under sole control o f GMPR. In some fields, such as machinery,
petroleum, rubber, building materials, sendees, and consumer
durable goods, only negligible proportions remained solely under
N u m b er o f c o m m o d ity item s listed , b y O P A organisational bra nch1

OPA organizational branch

A ll

A ll branches: Total ....................................
Grocery products .........................................
Sugar, tobacco, and dairy products..........
Meats, fish, fats and o ils...............................
Cereals, feeds, and agricultural chem icals
Petroleum ' ......................................................
Solid fuels ......................................................
Chemicals and d r u g s .................... ...............
Machinery ......................................................
Paper and paper products...........................
Rubber ...........................................................
Building m aterials ........................................
Nonferrous metals ......................................
Iron and steel ...............................................
Lumber ...........................................................
Textiles, leather, and apparel:
Prim ary products ..................................
Manufactured articles ..........................
Service trades ................................................
Consumer durable goods ............................ 1,018
Transportation ...............................................











2 29










1 Source: D irectory o f Commodities and Services, Office o f Price Adm inistration
(W ashington), 1943.
2 Including one item controlled by inform al agreement.
8 Price Control in Outline, by Don D. Humphrey (in Am erican Econom ic Review.
December 1942).
» Fourth Quarterly Report fo r the Period ended January 31, 1943 (Office o f Price
Adm inistration), pp. 4 and 33.
698255— IO'—4

Subsequent Regulations
Specific regulations issued subsequently to GMPR can be
classified for convenience into four general types, often used in
combination in a single regulation: (1) Those retaining the
March 1942 freeze date, but designed to fit particular industry
problems, (2) those having base dates other than March 1942,
(3) form ula or cost-plus regulations, and (4) specific dollarsand-cents ceilings, including Nation-wide as well as “ community”
ceilings. A detailed discussion o f these regulations is not possible
within the scope o f this report, but a few illustrative examples
may suffice to emphasize the principles involved.10

Certain peculiar characteristics o f the service trades required
their removal from GMPR on June 23, 1942, just prior to the
effective date o f control, and their inclusion under Maximum
Price Regulation 165, effective July 1, 1942. Many services are
not standardized, many are seasonal, and many are o f the “ custombuilt” variety, fo r which there are no established prices. The
most important element o f cost fo r most services, i.e., wages, was
not controlled. Accordingly, retaining the March 1942 base date,
sellers were permitted to determine their ceiling prices using the
same component charges as in the base period, adjusted for regu­
lar seasonal variations. A special provision was made fo r applica­
tion fo r ceiling adjustments because o f cost increases up to April
27,1942. In view o f administrative difficulties, the requirement o f
posting ceiling prices fo r cost-of-living services was omitted.

The most important examples o f regulations subsequent to
GMPR, providing for base dates other than March 1942, can be
found in foods, particularly those commodities brought under
control by authority o f the October 2, 1942, amendment to the
Price Control Act.- Thus, prices o f these items were “ frozen” for
60 days under Temporary Maximum Price Regulation 22 at the
level o f September 28 to October 2, 1942, and continued at this
level under Maximum Price Regulation No. 280 pending further
study. A few regulations, such as Maximum Price Regulation No.
177— Men’s and Boys’ Tailored Clothing, issued July 6, 1942, and
Maximum Price Regulation No. 153—W om en’s, Girls’ and Chil­
dren’s Outerwear Garments, issued May 23, 1942, provided for
base periods earlier than March 1942. Both o f these, however,
could also be classified under the next or foim ula type o f regu­

This form ula type is o f many varieties. Basically, ceilings are
determined by adding certain margins to cost. The margin may
10 For a com plete- discussion o f the regulations issued from A pril 30 to July 31,
1942, see Second Report o f the Office o f Price Adm inistration •77th Cong., 2d sess., House
Doc. No. 891), Appendix A , pp. 91-192.

be the individual seller’s normal margin or, more commonly, as
the program developed, a fixed margin specified in the regulation.
Cost price might be current replacement cost or cost during a
specified base period. In some cases, sellers are permitted to add
specified increases in raw material or labor costs to base period
costs. In the case o f Maximum Price Regulation No. 177, for
example, specified percentages could be added to base period
prices to cover increased material and labor costs. In the case o f
Maximum Price Regulation No. 153, as amended on June 9,1942,
manufacturers were permitted to add their customary- margin in
the base period to current replacement costs. Most extensive use
o f margin or cost-plus regulations was in foods, principally be­
cause o f the problem o f rising costs, which makes effective control
by the freeze technique impossible.

Probably the most desirable method o f price control, wher­
ever practicable, and certainly the most readily enforceable, as
will later be seen, is the establishment o f specific dollars-andcents ceilings, alike fo r all sellers. Obviously, however, such ceil­
ings presuppose detailed and painstaking investigation, inconceiv­
able at the time o f issuance o f GMPR. Dollars-and-cents ceilings
represented the ultimate goal o f OPA policy. The second quarterly
report officially expressed “ the desire o f the Office to substitute
specific dollars-and-cents ceilings wherever possible fo r the freeze
technique o f the GMPR.” 11 In November 1942, Henderson stated:
“The end we seek is a simple manageable system o f controls,
where possible, in dollars-and-cents terms and which both buyers
and sellers can readily understand.” 12
The development and extension o f “ specified dollars-and-cents
prices, as distinguished from base-period and cost-plus or formula
prices,” was emphasized in OPA’s quarterly reports beginning
with the report for the period ended January 3 1 ,1943.1* Although
this program was initiated shortly after the the issuance o f GMPR
and extended broadly during the fourth and fifth quarter opera­
tions o f OPA, it received m ajor impetus under the President’s
“hold-the-line” order o f April 8,. 1943,14*which was accompanied
by a statement o f the Director o f Econom ic Stabilization that
dollars-and-cents ceilings would shortly be issued for many
items.18 During May and June 1943 alone, 67 regulations were
issued setting specific dollars-and-cents ceilings fo r the Nation as
Second Report o f the Office o f Price Adm inistration covering the operations o f
the Office between May 1 and July 31,1942 (77th Cong., 2d sess., House Doc. No. 891). p . 95.
, „ 12 Address hy Leon Henderson, Adm inistrator, Office o f Price Adm inistration,
before the S t Louis Chamber o f Commerce, Jefferson H otel, S t Louis, Mo., Novem ber 12.
1942. (OPA Release No. 1118, W ashington, 1942.)
is Fourth Quarterly Report fo r the Period ended January 31, 1943 (Office o f Price
Adm inistration), pp. 34-36.
F ifth Quarterly Report fo r the Period ended A pril 30, 1943 (Office o f P rice Adm in­
istration, House Doc. No. 302, 78th Cong., 1st sess., W ashington, 1943), pp. 1-4.
Sixth Quarterly Report fo r the P eriod ended June 30, 1943 (Office o f P rice Admin­
istration, W ashington, 1943), pp. 1-7.
14 Executive Order No. 9328 (W ashington), A pril 8, 1943.
15 Fifth Quarterly Report fo r the Period ended A pril 30, 1943 (Office o f Price A d -,
m inistration, House Doc. No. 302, 78th Cong., 1st sess., W ashington), p. 1.

a whole or fo r broad geographic areas. In addition to these regu­
lations, a “ community ceding” program was inaugurated early in
May. Under this program, dollars-and-cents maximum prices had
been established at retail, by the end o f June, on about 1,000
grocery items in about 200 m ajor cities.14 These ceilings were cal­
culated and set, fo r four types o f retail outlets, by district OPA
offices on the basis o f cost data furnished by local suppliers, using
the allowable wholesale and retail mark-ups set in existing food
Sixth Quarterly Report fo r the Period ended June 30, 1943 (Office o f Price Ad­
m inistration), pp, 2-4.

Part BE.—Appraisal
Chapter 5 .—Direct and Indirect Violations
Open Violations
Enforcement o f OPA regulations has been difficult because
“ facilities for enforcement have never been equal to the task,” 1
and in the case o f GMPR there also were inherent difficulties
which prevented adequate enforcement.
Legitimate ceilings under GMPR were indefinite and individ­
ual, and base period records not readily accessible. Posting Jof
ceiling prices does not guarantee their legality. P roof o f violation
consequently was difficult. Comprehensive statistics are not avail­
able to show the degree o f compliance, but unpublished records
o f the Enforcement Division o f the Office o f Price Administration
show that nearly 3,000 complaints o f violations o f GMPR were
received per month between November 1942 and March 1943.
Moreover, an OPA report, discussing the increase in the cost o f
living between May 1942 and May 1943, acknowledged the exist­
ence o f “ many flagrant violations.” 23
One form er OPA official, writing in the Quarterly Journal o f
Economics, described “ a general lack o f compliance with the
letter and even the spirit o f the law” and a tendency o f a large
number o f retailers to follow the principle o f “ mark-ups as usual”
rather than ceilings o f GMPR or other regulations.2 Many small
shopkeepers made no pretense o f determining March 1942 ceil­
ings, but simply calculated a profitable selling price and stamped
“ ceiling price” on the price ticket. Some proof o f this tendency
may be gleaned from the results o f an extensive survey o f food
prices which showed advances in posted ceiling prices, during the
latter part o f 1942, although no increases had been granted by
OPA. Average ceiling prices on October 13, 1942, and December
15,1942, were compared fo r 27 foods covered by GMPR on both
dates. These averages were not strictly comparable because the
number o f stores was not identical on the two dates. It is sig­
nificant, however, that the number o f items fo r which average
ceilings increased was much greater fo r small independent stores
than for chains and supermarkets, and the size o f increase ap­
peared to be smaller fo r chains and supermarkets, as shown in
the follow ing figures.
1 F ifth Quarterly Report fo r the Period Ended A pril 30, 1943 (Office o f Price Ad­
m inistration), p . 52.
2 One Year o f Retail P rice Control (May 1942-May 1943), P rice Control Report No.
15 (Office o f Price Adm inistration, W ashington, 1943).
3 The Tactics o f Retail Price Control, b y John Perry M iller (In Quarterly Journal
o f Econom ics, August 1943, p . 507).



All stores ....................... ......................
Small independent s t o r e s .................
Medium size independent s to r e s ....
Large independent stores .................
Chain stores ........................................
Supermarkets ......................................

Number o f

Number o f

Number o f
o f 1 percent
or more




Trade papers, which have reported over-ceiling transactions
in many commodities, have been both reticent and oblique in
making accusations o f violations o f GMPR. This makes all the
m ore significant those reports which have appeared and also
makes not untenable the assumption that outright violations of
GMPR were relatively more widespread than were reported for
other more specific regulations.
The Retail Merchants Association o f Detroit found by query
in 1942 that only 42 percent o f its 27,000 members were com ply­
ing completely with GMPR rules. Many o f them had no records
o f March 1942 prices and others could not understand the rules.
Twenty-one percent o f the Detroit stores said they were not com ­
plying in any part.4*6 OPA discovered in the fall o f 1942 that 50
percent o f 10,000 grocery stores investigated were not com plying
with price regulations.® Of these, 40 percent represented m inor
violations, largely failure to post prices, and 10 percent, violations
serious enough to require legal action.
Between April 27 and May 1, 1943, OPA, at the request o f
President Roosevelt, made a survey o f food prices in 230 mining
communities in Pennsylvania, W est Virginia, Kentucky, Illinois,
Indiana, and Alabama, ranging from a population o f 300 to 12,000,
the purpose o f which was to determine the degree o f compliance
with OPA food regulations.® Prices were checked in 475 stores,
o f which 100 were company stores and 65 were chain stores, and
which represented 70-75 percent o f food sales in these communi­
ties. The foods checked were confined to those covered by three
regulations (Nos. 238, 268, and 336), namely, coffee, fats and oils,
processed foods, fresh fruits and vegetables, poultry, dairy prod­
ucts, and pork products. Maximum Price Regulations 238 and
268 were margin regulations under which ceiling prices were
determined by adding a specified margin to the actual cost to the
retailer, and Maximum Price Regulation No. 336 on pork prod­
ucts contained specific dollars-and-cents ceilings. The survejr did
not attempt to check the degree o f compliance with GMPR, but
the evidence indicates that nonconform ity with GMPR might have
been even greater than with the three regulations checked. Viola­
tions o f mark-up regulations occurred in Pennsylvania and West
Virginia for about 40 percent o f the items checked. Compliance
with specific dollars-and-cents ceilings was markedly better. It
was estimated that actual prices on the commodities checked
4 W all Street Journal (New Y ork), Decem ber 24, 1942,
» Business W eek (New Y ork), Novem ber 14, 1942.
6 OPA Release No. 2472 (W ashington), May 10, 1943.

averaged 5 percent above ceiling prices. The survey also disclosed
substantial noncompliance with the provisions for posting prices.
The follow ing table shows the results:
O PA su rvey o f food -p rice violations, April-M ay


Illinois and Indiana ........................
Illinois and Indiana ........................
Kentucky ............................................
Kentucky ......................................
Kentucky .......................................... <
Pennsylvania ......................................
Pennsylvania ...............................

................... .........................

West V irginia .....................................
West Virginia ....................................
W est Virginia .....................................


Number o f

238 & 268


specified States

Number o f

o f viola­

Chief among recommendations made as a result o f the survey
was that specific dollars-and-cents ceilings be substituted on all
foods for existing form ula regulations as rapidly as possible.
There was also evidence that violations o f price ceilings for
clothing were even more numerous than fo r food.7* An OPA
investigation o f 300 chain stores selling clothing disclosed viola­
tions in 40 percent o f the stores. Violations in small independent
stores would probably have been even higher.
Black Markets
In addition to outright violations o f ceilings in over-thecounter trade there was the continuing problem o f black markets,
which multiplied with scarcities. Those fo r gasoline and meat,
for example, were com m on knowledge. Other examples were
cotton wash fabrics,® zippers,9 nylon hose,10 liquor,11 second-hand
furniture,12 and hardware and tools.13 Countless other illustra­
tions could be cited.14*1
6In February 1944, Chester Bowles estimated
that “ between 3 and 4 percent o f the average cost o f all food is
due to black market operations” .18
7 Sixth Quarterly Report fo r the Period ended June 30, 1943 (Office o f Price Admin­
s Daily News Record (New Y ork), May 27, 1943.
o Idem , March 26, 1943.
io Journal o f Commerce, February 4, 1943; Daily New's Record, September 23, 1942.
n W all Street Journal (New Y ork), May 13, 1943.
12 New York Tim es (New Y ork), November 6,1942.
13 Hardware Age (New Y ork), A pril 15, 1943.
14 Linings (D aily News Record, October 28, 1943); mattresses, blankets, and com­
fortable covers (Journal o f Commerce, May 21, 1943); rayon yarn (Journal o f Commerce,
March 26, 1943, November 1, 1943); potatoes (Journal o f Commerce, May 5, 1943, New
York Tim es, May 19, 1943); butter (New York Times, January 27, 1943); watches (New7
York Tim es, March 20, 1943); coal (W ashington Post, W ashington, D. C., January 27,
1943); beds and hedsprings (New York Tim es, A pril 15, 1943); hops (Journal o f Com­
m erce, November 9, 1943); used photographic equipment (Business W eek, October 31,
1942); second-hand farm machines (Journal o f Commerce, January 28, 1943; OPA Release
No. 1409, W ashington, D. C., January 5,1943); spruce and hardw oods (Com m ercial Bulletin,
Boston, Mass., November 28, 1942).
16 Address by Chester Bowles, Adm inistrator, Office o f Price Adm inistration, at the
New York Times H all, February 29, 1944 (New York Tim es, March 1, 1944).

An interesting analysis o f black-market tricks was made by
the magazine Business Week, which pointed out that “ there have
been observable black markets in every rationed commodity* plus
a lot o f unrationed ones.” According to this analysis, black-market
operations in food follow a ten-point pattern (two points are
omitted from the follow ing listing because they refer to evasion
o f rationing rules rather than price ceilings):
(1) Plain bootlegging or hijacking—that is, routing o f foods through
non-normal channels so as to evade price and rationing rules.
(2) Use of tij)s and prizes.
(3) Combination purchases o r combination sales.
(4) Classifying a commodity erroneously—that is, describing an
ordinary hen as a prize chicken or potatoes intended for the table as
seed potatoes.
(5) Classifying a purchaser erroneously—that is, labeling a locker
holder as a cooperative farmer or a grocer as an institutional user.
(6) Short-weighting the purchaser, a very common practice.
(8) Upgrading—that is, labeling a grade B product as Grade A.
(9) Use o f tw o sets o f books to cover illegal sales.16

Bidden Violations
The above listing includes a number o f indirect violations,
sometimes called “hidden price increases,” as opposed to open
violations. Commonly, although the prices are ostensibly con­
stant, they cover a smaller quantity o f goods or goods o f poorer
quality or less serviceability, resulting in higher costs “ per unit
o f satisfaction.” In some fields, e.g., textiles and clothing,17 such
increases were so widespread as to minimize the benefits o f price
control. The Bureau o f Labor Statistics and the Office o f Price
Administration devoted considerable attention to the problem o f
reflecting hidden increases in price indexes, but the nature o f the
violations does not permit adequate quantitative measurement.18
For purposes o f the Bureau o f Labor Statistics consumers’ price
index, experienced agents price goods according to rigid specifica­
tions and where changes in quality occur, they attempt to price a
product whose quality is equivalent to that o f the original article
priced. Nevertheless, a special committee o f the American Statisti­
cal Association, on the basis o f an exhaustive analysis undertaken
at the request o f the Bureau o f Labor Statistics, concluded:
We believe that consumers’ goods and services, in the aggregate,
have since 1939 suffered some loss of quality that is not reflected in reio Business W eek, June 26, 1043.
it See Effects o f Rising Cost on Quality o f W earing A pparel, b y Laura Mae Brown
(in Monthly Labor Review, February 1941), and Recent t ’.innres in. the Character o f
Civilian Textiles and Apparel, by the same author (in Montuly Labor Review , K<;>tem ber 1943).
The follow ing footnote is carried regularly on m onthly consumers* prices releases:
“ The index only partially shows the wartim e effects ,f changes in quality, avail­
ability o f consum er goods, etc. The President’s Committee on the Cost o f Living lias
estim ated that such factors, together w ith certain others not fu lly measured b y the index,
w ould add a m aximum o f 3 to 4 points to the index fo r larg * cities between January 1341
and September 1944. I f sm all cities were included in t! e national average, another %
point w ould be added. I f account is also taken o f continued deterioration o f quality and
disappearance o f low -priced merchandise between Scptem ler 1944 and September 1940,
the over-all adjustm ent fo r the period January 1941 to Septem ber 1945 w ould total
approxim ately 5 points. As merchandise o f prewar quality and specifications com es back
into the markets and the Bureau is able regularly to price it again, this adjustm ent
factor w ill gradually decrease and finally disappear.’9

ported prices. No dollar value can be put on this loss. In large part it is
an intangible and unmeasurable element o f the war. Consumers cannot
be compensated fo r it. The cost-of-living index takes incom plete account
o f it.19

Later a technical advisory committee, under the chairman­
ship o f W esley C. Mitchell, which was requested by the President’s
Committee on the Cost o f Living to render an independent opinion
on the index, concluded:40
Extensive quality deterioration has occurred in the items covered b y
the index. Most o f it is the direct result o f the shortage o f materials and
labor, w hich, in turn, resulted from the w ar . . . W e know no satisfactory
w ay o f measuring changes in “ real prices” —that is, the prices o f a given
quantity o f utility, usefulness, or service . . . Although the direction o f
quality change is usually obvious, its magnitude in price terms is not,
even to individual consumers.

Some lowering o f quality has been caused by wartime scar­
cities or higher costs o f labor and materials. Thus, restrictions on
use o f fats and oils in soap manufacture forced greater use o f
linseed oil, resulting in poorer quality soap.41 The W ar Produc­
tion Board’s limitation on the use o f w ool compelled the elimina­
tion o f all-wool blankets and clothing. In certain cases o f this
kind OPA has concurred in the inevitable price increase. Among
such was the order which permitted a reduction in the number o f
sheets in tablets made o f newsprint, to compensate fo r an increase
during 1943 o f $8 per ton in the ceiling price o f newsprint.44 An­
other example was a ruling to the effect that where the butterfat
content o f ice cream was reduced 2% percent or less, no change
in the March 1942 ceiling had to be made.44 F or the most part,
however, OPA ruled that corresponding reductions in price must
be made for reductions in quality, serviceability, or services.
For convenience o f discussion, these indirect violations were
classified by one writer into four main groups: (1) extras, dis­
counts and concessions, (2) quality deterioration, (3) discontinu­
ance o f cheaper lines and services, and (4) transportation costs
and changes in channels o f distribution.44

The classification “ extras, discounts, and concessions” includes
a great variety o f indirect price increases, as indicated in the fol­
lowing listing, which is not necessarily com plete: Discontinuance
or lowering o f customary discounts, discontinuance or lowering o f
commissions, elimination o f customary differentials to different
classes o f purchasers, extra charges in the form o f “bets,” bribes,
tips, gifts, kick-backs, cash payments on the side, or fictitious
quantity estimates, charges for delivery or other services not for­
merly perform ed or form erly performed free, charges for ficti-1
19 An Appraisal o f the U. S. Bureau o f Labor Statistics Cost o f Living Index, by a
Special Committee o f the Am erican Statistical Association (in Journal o f the American
Statistical Association, Boston, Mass., Voi. 38, Decem ber 1943, pp. 387-405).
20 Report o f the Technical Committee appointed b y the Chairman o f the President’s
Committee on the Cost o f Living, June 15, 1944.
21 Journal o f Commerce, May 28, 1943.
22 OPA Release No. 3599 (W ashington), Decem ber 7, 1943.
23 OPA Release No. 1780 (W ashington), February 23, 1943.
24 Indirect Price Increases, b y M elville J. Ulmer (in Monthly Labtir Review, No­
vem ber 1942).

tious legal o r brokerage services, charges fo r goods not actually
delivered, pyramiding o f mark-ups through dummy jobbing con­
cerns, etc.
Many persons were alleged to have violated GMPR by exact­
ing an extra charge fo r paper cups in which soft drinks and re­
freshments are served, when no such charge had been made in
March 1942.2
78 In liquor, for which substantial discounts from list
price were customary prior to GMPR, the list price tended to be­
com e the suppliers’ ceiling.8® In October 1942, it was reported
that stores “ gladly” purchased, at 10 percent off list price, textile
housefurnishings on which they form erly obtained 26 to 37 per­
cent discount.27
The follow ing table,28 expressing quantitatively the effect o f
some indirect prices o f this type, is o f interest, even though the
items shown were covered by regulations other than GMPR:
Effect o f indirect price increases on actual prices paid by consumers o f
specified steel products1
Percent o f change in—
Item end date




W ithdrawal o f “ concession” — reinforcing steel
bars (V/j" round), W ashington, D. C.
August 1939 to December 1941...........................

+ 13



W ithdraw al o f discount— standard steel pipe,
August 1939 to Decem ber 1941..........................




New extra charges fo r size, processing, and head­
ing—steel w ire, Philadelphia.
August 1939 to February 1942............................




W ithdrawal o f “ concession** and increase o f extra
charge—cold-rolled steel strip, New York City.
August 1939 to June 1942.....................................




W ithdrawal o f “ concession** and discount and im­
position o f new extra charge—cold-rolled steel
strip, Toledo.
September 1939 to A pril 1942.............................




i Computed from dr.ta collected in a special field study by the Bureau o f Labor

The device o f “ bets” or other cash payments on the side was
used in lumber,293
*2 textiles,89 furniture,81 lamps,82 and foods.88 In
addition, it was noted for other items not covered by GMPR.84 A
25 Drug Topics (New Y ork), Decem ber 28, 1942.
26 New York Tim es, March 21, 1943.
27 Daily News Record (New Y ork), October 7, 1942.
i 28 in £ii’ect Price ^ creases,
M elville J. Ulmer (in Monthly Labor Review, November. 1942).
29 Am erican Lumberman (C hicago), March 20, 1943.
30 Daily News Record, A pril 7, 1943; Journal o f Commerce, June 7, 1943; Daily
News Record, June 24, 1943.
s i Journal o f Commerce, Decem ber 11, 1942.
32 Trade Clip Sheet 694 (W ashington), July 30, 1943.
33 Journal o f Commerce, Decem ber 18, 1942.
84 K raft paper (Com m ercial Bulletin, February 6, 1943); waste paper (Comm ercial
Bulletin, June 26, 1943); toys (New York Tim es, March 29, 1943); meats (New York Tim es,
January 2, 1943, January 6, 1943); crude petroleum (W all Street Journal, June 15, 1943).

similar device is the fictitious quantity estimate. A farm er, faced
with dire need fo r corn, purposely overestimates the quantity o f
corn in a neighbor’s bin which he intends to purchase.**

Hidden price increases as a result o f quality deterioration
are a less insidious form o f violation, because they are not cumu­
lative in nature. They were most marked fo r nonstandard, style
merchandise, where they are difficult to detect. Quality deteriora­
tion takes a variety o f form s: upgrading, shortweighting, less
workmanship, defective workmanship, reduction in weight,
changes in style or design, use o f substitute or inferior grades and
materials, blending with less expensive grades o r materials, reduc­
tion in the amount o f materials used, decrease in the length o f the
guarantee period, combination sales at higher prices, forced pur­
chase o f an unwanted com m odity as a condition fo r sale o f a
scarce com modity, etc.
One noticeable failure o f GMPR was inability to control
prices o f new products. Many retailers exceeded their March
prices on the pretext that the merchandise was not comparable
to that previously sold. Under Amendment No. 54 “ new” products
could be priced by adding the mark-up on a comparable commod­
ity to the cost o f the new article. Abuse o f this privilege was
particularly prevalent fo r liquor,86 but it was also reported for
other goods, fo r example lumber *Tand lamps.** In the case o f lug­
gage, unwarranted increases occurred under GMPR because o f
this loophole and a specific regulation was issued to curb them.**
Upgrading and shortweighting were com mon, particularly
following serious shortage conditions.3
40 The practice in butcher
stores o f weighing in large amounts o f fat and bone with meats
became very prevalent.41 In many cases, in changing from one type
o f container to another, manufacturers and distributors reduced
the size o f container without lowering the price, as fo r chem­
icals and drugs.423
4 Whiskies, packed in bottles holding a fifth o f a
gallon, were sold at prices as nigh as or higher than those form erly
charged for a quart size; 85 proof whisky was sold at prices weft
above those form erly charged for 100 proof.4*
Poorer workmanship, and poorer or skimpy materials, etc.,
have been most noticeable in textiles. This has been due in large
part to the fact that quality rather than price competition is cus­
tomary in this indusry. Clothing and textile products sell at certain
generally accepted levels or “ price lines.” W om en’s dresses, for
example, ordinarily sell fo r $5.95, $6.95, $7.95, $10.95, $14.95, and
35 Chicago Journal o f Commerce (Chicago), June 8, 1943.
scO PA Release No. 1164 (W ashington), November 23, 1942; New Y ork Tim es,
May 12, 1943.
37 Commercial Bulletin, July 31, 1943; Am erican Lumberman, March C, 1943.
38 Trade Clip Sheet 694 (W ashington), July 30, 1943.
39 OPA Release No. 3290 (W ashington), October 11, 1943.
40 Southern pine (OPA Release No. 3760, W ashington, Decem ber 31, 1943); corru­
gated waste paper (Com m ercial Bulletin, February 6, 1943, May 22, 1943); eggs (Journal
o f Commerce, July 20, 1943); potatoes (W all Street Journal, May 20, 1943); and butter
(Journal o f Commerce, July 8, 1943).
41 CIO News (W ashington), A pril 19, 1943; PM (New Y ork), Novem ber 10, 1942.
42 Journal o f Commerce, January 11, 1943.
43 New York Tim es, May 12, 1943.

$16.95; men’s street shoes for $2.98, $4.00, and $5.00. Normally,
quality changes are made within relatively narrow limits to main­
tain these price lines. During the war period, however, drastic
quality changes (by altering fiber content or weave and other
means) were frequently necessary.** To mention two specific
examples: Manufacturers o f men’s woven underwear shorts low ­
ered the thread count o f the material without lowering the price;4
tests by Consumers Union showed an average deterioration o f 20
percent (or a 25 percent price rise) in men’s white broadcloth
shirts between 1941 and 1944, owing to poor construction and
inspection, and to a 10 percent reduction in thread count and ten­
sile strength, in addition to a 20 percent rise in actual prices.4*
Quality deterioration was by no means confined to style mer­
chandise. In April 1943, John W . McClure, secretary o f the Na­
tional Hardwood Lumber Association, warned against the “ grow­
ing disregard o f grading standards” in lumber because o f pressure
o f costs against ceiling.47 Similar complaints were made o f coke,48
scrap iron,49* coal,39 and steel,51 all o f which were covered by
specific regulations.
Because o f difficulty in buying finished products, some whole­
salers and retailers manufactured their own products, frequently
in a makeshift fashion, with shoddy or second-hand materials and
sold them at handsome- profits. This practice was noted for
radios, refrigerators, furniture,525
3 electric heaters,58 and mat­
Food and Drug Administration inspectors detected much
quality deterioration in foods. Coffee has been m ixed with roasted
cereal. Dried grass has been sold as tea. Imported spices have been
mixed with 20-25 percent cornstarch. Canned sardines “ packed in
pure olive oil” have been found packed in corn oil or cottonseed oil.
Saccharine has been substituted fo r sugar; cornstarch has been
used instead o f egg in prepared baking mixes. In egg macaroni
the standard 5Vz percent egg content has been reduced to 2 percent
and the yellow coloring supplied by a coal tar dye. Instead o f the
usual vegetable oils, mayonnaise and salad dressings have been
made with mineral oils, which act as laxatives.55 Containers, for­
merly filled to the brim, have been partially filled, syrups have
been diluted, and jar sizes o f jam s and jellies have been reduced.56
Changes in the size, weight, and quality o f candy bars were
numerous. One leading candy company was found guilty o f re­
ducing the weight o f its bars without reducing its prices by the
United States Circuit Court o f Appeals at Kansas City, Mo., in
44 Hecent Changes in the Character o f Civilian Textiles and A pparel, b y Laura
Brown W ebb (in Monthly Labor Review, September 1943).
45 Daily News Record, October 8, 1942.
4« Consumer Reports (New Y ork), February 194*1.
47 Southern Lumberman (Nashville, Tenu.), A pril 15, 1943.
48 Daily Metal Trade (Cleveland), January 27, 1943; Am erican Metal Market (New
Y ork ), June 3, 1943.
49 D aily Metal Trade, Decem ber 16, 1942.
so Business W eek, December 12, i942.
si Steil (Cleveland), December 7, 1942.
52 Business W eek, April 3, 1943.
53 WPB Release No. 2467 (W ashington), February 6, 1943,
54 Furniture W orld, July 8, 1943.
55 W ashington News (W ashington), May 20, 1943.
so OPA Release No. 1C95 (W ashington), November 8, 1942,

May 1943. Seven other candy companies actually obtained OPA
permission to reduce weights 10 to 30 percent or to raise prices,
or both.®7 Tests by Consumers Union indicate that 19 out o f 20
candy bars tested in 1939 and again in 1943 shrank so in size that
a 23. percent hidden price rise resulted. Actually the increase in
cost ranged from zero to 78 percent.58
Another form o f evasion is the “ tying-in” sale, one in which
the buyer is required to purchase a less-desired and, possibly,
slow-selling item to obtain a scarce commodity in great demand.
The sale o f a com m odity which is scarce and under price control
is linked with the sale o f an exempt item or one on which the
profit margin is greater. This practice was reported repeatedly
fo r coffee prior to rationing.5® It has also been noted in connec­
tion with cosmetics,80 flashlight batteries,81 popular brands o f
chewing gum and candy bars,02 nylon hosiery.88 and other items.68
One o f the most curious illustrations is that o f a sale o f a live pig,
exempt from price control, in conjunction with a used com
picker, at a combined price greatly in excess o f the ceiling price o f
the picker plus the market value o f the pig.85

A very noticeable phenomenon of the war econom y has been
the discontinuance o f cheaper lines o f services. This has been due
in part to greatly increased demand for higher priced merchandise
by consumers possessing more spending money than ever before.
It has, however, been fostered by the desire o f businessmen, under
the pressure o f rising costs and fixed ceiling prices, to reap the
larger profits norm ally obtained from higher priced goods.
This trend has been noticeable in .clothing. Indicatively,
Buyers Informant, directory o f coat and dress manufacturers in
the important New York market, listed only 37 manufacturers o f
coats to retail between $5.75 and $7.98 in the fall o f 1942, and none
in the spring or fall o f 1943, compared with 108 in the spring o f
1942. F or women’s cotton dresses to sell at $1.29, the spring 1942
listing o f 20 manufacturers had dwindled to one in July 1943.88
Fanned by increasing, consumer resentment, the condition
became so apparent in late 1943 that positive action was taken by
Econom ic Stabilization Director Vinson to increase the produc­
tion o f “ low-end” goods. The W ar Production Board was directed
to initiate plans for increasing production o f scarce consumer
goods, particularly low-cost items, and OPA to permit minimum *6
67 Business W eek, May 22, 1943.
68 Consumer Reports, A pril 1943.
6© Journal o f Commerce, October 14, 1942; New Y ork Tim es, O ctober 17, 1942.
eo Journal o f Commerce, November 9, 1942.
6i OPA Release No. 2784 (W ashington), July 9, 1943.
«2 New York Tim es, A pril 28, 1943.
68 OPA Release No. 1769 (W ashington), February 23, 1943.
64 Sheer rayon hosiery (D aily News Record, October 19, 1942); meats (PM, Novem­
ber 10, 1942; Journal o f Commerce, July 1, 1943); butter (New Y ork Tim es, January 11,
1943) ; potatoes (New York Tim es, June 6, 1943); copper and brass scrap (D aily Metal
Reporter, New York, N. Y ., March 12. 1943); sherbet and ice cream (OPA Release No.
2502, W ashington, D. C., May 14, 1943); fresh vegetables (Journal o f Commerce, No­
vem ber 12, 1943); autom obiles (New York Tim es, May 17, 1943); m illfecds (Northwestern
M iller, M inneapolis, Minn., May 12, 1943).
es Chicago Journal o f Commerce (C hicago), January 27, 1943.
«o Business W’cek, September 25, 1943.

price increases if necessary fo r operation o f the W ar Production
Board’s production programs.97 The trend to higher priced shoes,
accentuated under shoe rationing,98 resulted in OPA action mak­
ing shoes retailing at $3 or less per pair ration-free fo r 3 weeks,
January 17 to February 5, 1944." W oolw orth stores were selling
an increasing number o f items above the $1 price.6
*0 This trading8
up tendency also was noted for many yard goods and housefurnishings, e.g., furniture,71 rayon yard goods,72* and towels.78
Included under this classification, in addition to elimination
or reduction o f stocks o f low profit items, are elimination o f
cheaper services such as “ wet wash,” elimination o f special serv­
ices or “ frills,” such as gift wrapping, and extra shopping hours,
increased self-service operations, reduced assortments o f styles
and sizes, etc.
The discontinuance o f retail “ frills” was instigated by OPA
as the first m ove in a “ Retailers’ Econom y fo r Victory Plan,”
chiefly because o f the manpower problem. Among frills which
could be discontinued were deliveries o f small packages, sales on
approval, acceptance o f returned goods, gift wrapping, lay-away
and will-call privileges, free telephone calls, free concerts, instruc­
tion classes, style shows, store decorations, air-conditioning.747
Decrease o f services and increase o f self-service operations
have been rather general in both food and department stores.
Among stores which have experimented with such operations are
R. H. Macy & Co., New York; L. Ramberger & Co., Newark; Goldblatt Bros., Chicago; W illiam F ile n e ’ s, Boston; the Emporium;
San Francisco; and the W . T. Grant chain stores.78 According to
a survey o f about 5,000 independent grocers in New York by the
New York State Food Merchants Association, only 40 percent o f *
the members were planning to continue operations under the
old credit and delivery method.79

In some cases added costs result from changes in channels of
distribution or methods o f transportation. For products sold on a
delivered basis, producers have shewn preference fo r nearby con­
sumers in order to save freight charges, and in certain cases such
as waste paper and coal-tar derivatives, OPA has permitted addi­
tional freight charges in order to correct a serious supply prob­
lem in distant areas.77 Sometimes a shift in base point will result
in greatly increased costs to the buyer.77
67 W all Street Journal, Decem ber 15, 1943,
68 New Y ork Tim es. March 10, 1943 and June IS, 1943.
60 OPA Kelease No. 3824 (W ashington), January 17, 1914.
70 W all Street Journal, June 17, 1943.
71 New York Tim es, A pril 11, 1943.
72 Daily News Record, February 6, 1913.
78 D aily News Record, February 17, 1943. Other exam ple 4 are dom estic fiber rug’;
(Journal o f Commerce, May 12, 1943); drapery fabrics (Journal o f Commerce, October
15, 1942); tufted spreads (Journal o f Commerce, August 18, 1943); curtains (Journal o f
Commerce, June 30, 1943).
74 OPA Release No. 1157 (W ashington), Novem ber 25, 1£42.
75 W all Street Journal, May 21, 1943.
76 New York Tim es, September 5, 1943.
77 Indirect Price Increases, b y M elville J. Ulmer (in M onthly Labor Review , No­
vem ber 1942).

Reference has already been made to indirect price increases
through pyramiding o f mark-ups, a practice more prevalent under
mark-up regulations than under GMPR. It has been noted for
underwear78 and some foods,79 as well as other items not covered
by GMPR.80 Other devices, reported fo r fresh produce,818
2are split­
ting shipments to obtain premiums allowed for less-than-carload
lots, and making truck deliveries in order to qualify fo r the legal
mark-up allowed service jobbers.

Chapter 6 .—Difficulties o f Administration
There were many practical problems o f administration and
enforcement under GMPR. Among them were public information
and education; the large number t>f sellers; lack o f adequate
records; difficulty o f proving violations; complexity o f the regula­
tions; ambiguity o f some o f the provisions; latitude for individual
interpretations; the need fo r thousands o f individual adjustments;
pricing o f new commodities, seasonal commodities, and others
not sold in the base period; the pricing o f style and custom-built
merchandise; etc.
It has been seen that OPA’s inadequate enforcement staff, as
well as the nature o f GMPR ceilings, made enforcement o f the
regulation difficult. No real attempt was made to com pel rigid
adherence. OPA efforts Were concentrated on securing voluntary
compliance. The provision in the regulation making both buyer
and seller guilty o f violation in all cases o f sales above ceiling level
was not the aid to enforcement which had been anticipated.
Buyers were unwilling to complain o f overcharges fo r fear o f
forfeiting sources o f needed supplies.
Experience has shown on ly too clearly that, w ith occasional and
insignificant exceptions, the great mass o f potential evidence o f violations
contained in the m illions o f daily retail purchases by individual consumers
throughout the country is not brought to the attention o f the enforcem ent
authorities o f this office.s-

OPA found, moreover, that the penalties fo r violations pro­
vided in the Emergency Price Control Act were cumbersome and
too drastic for the mass o f m inor retail infringements, and urged
simplified penalties, such as small fines. In addition, they re­
quested the right to make test purchases as evidence o f violation.
As a result—
7$ Journal o f Commerce, July 26, 1943.
79 Journal o f Commerce, A pril 16, 1943.
so Fresh fish (OPA Release No. 2949, W ashington, August 23, 1943); w ork clothing
(D aily News Record, July 9, 1943); casein (OPA Release No. 2699, W ashington, June 16,
1943); citrus fru its (Business W eek, May 22,1943).
81 Business W eek, January 15, 1944.
82 Fifth Quarterly Report fo r , the Period ended A pril 30, 1943 (Office o f Price Ad­
m inistration), p. 54.

Enforcem ent o f the General Maximum Price Regulation . . . was o f
necessity lim ited largely to various key wholesale com m odities, where
a strategically aimed enforcem ent campaign could achieve far-reaching
results. Also, in the hope o f producing an exemplary effect among retail
sellers generally, suits were instituted against a small number o f the m ore
flagrant retail violators. No systematic enforcem ent program could be
developed, however.2

Considerable success in securing voluntary com pliance was
achieved through the use o f “price panel assistants/’ volunteers
assigned to local boards. As o f March 1, 1944, there were 39,000
o f these volunteers. Their duties, a compromise between educa­
tional and policing wQrk, were to furnish information and other­
wise to assist the merchants in their particular localities in under­
standing OPA regulations and periodically to check compliance on
selected items. In one city, where form erly 36 percent o f all sales,
had been made above ceiling, 30 days’ intensive effort reduced this
figure to 3 percent.®
Educational Problem
The educational problem posed by GMPR was form idable
even for manufacturers and wholesalers, but particularly so for
retailers. According to the Census o f Retail Trade, there were
1,770,355 retail stores in 1939. Unfortunately Ihere is no national
roster o f retailers; and it is difficult to maintain such a list because
o f the frequency with which small retailers open or close their
businesses. Listing these numerous small stores located in every
community and crossroads o f the country would be difficult no
matter what the form o f control used. In addition, adequate ex­
planation o f the provisions o f GMPR proved fo be a difficult un­
dertaking. This was attempted by a campaign o f local group
meetings in the summer o f 1942 and by issuance o f elaborate
question-and-answer press releases. A great deal o f time and
energy was expended in refinement o f the regulation. As order
follow ed order, the great number o f amendments, supplementaiy
orders, and interpretations led to confusion and to a lesser degree
o f freedom o f the businessman to make normal changes in the
conduct o f his own affairs.
Probably on no other count has the criticism o f GMPR been
so severe or so bitter as on the ground o f the com plexity and con­
fusion o f its provisions. Trained economists, form er OPA offi­
cials, and practical businessmen alike have protested the seem­
ing triviality and the impracticability o f many o f its provisions.
Even OPA ofticallv attested to the complexity o f GMPR which
arose from the desire fo r absolute equity. As one form er OPA
official phrased it:
F ifth Quarterly Report fo r the Period Ended A pril 30,1943 (Office o f Price Adm in­
istration), pp. 51-55.
a Address by Chester Bowles, Adm inistrator, Office o f P rice Adm inistration, at the
New Y ork Tim es H all, February 29, 1914 (New Y ork Tim es, March 1, 1944).

Comprehensive price freezing is at best extrem ely hard to enforce.
The im practicability o f the particular plan w hich was adopted, how ever,
together with the inordinately obscure and unnecessarily com plex lang­
uage o f the regulations, and the frequency with w hich they w ere amended
and even basically m odified in principle, added greatly to the difficulties
o f securing com pliance.4*

Another official wrote:
Only persons thoroughly trained in Marshallian econom ics could
have been responsible fo r this beautifully logical but painfully im practical
set o f price rules. They im ply the existence in fact o f a high degree o f
substitutability and a definable pattern o f normal price regulations. The
author is inform ed that a group o f lawyers claim the credit for much
o f the refinement.1

In November 1942, Henderson outlined a “ new offensive,”
the first tenet o f which was the replacement o f much o f GMPR
(and other regulations) by simpler, more definite ceilings.6
Latitude fo r Independent Interpretation
Necessarily, under the terms o f the Regulation, considerable
latitude remained for independent judgment, find compliance
rested largely upon the integrity o f the seller. Under the pressure
o f scarcities and narrowed profit margins, reliance upon honesty
proved inadequate, particularly for nonstandardized items. More­
over, maximum prices were a matter o f individual determination,
frequently on the basis o f information not readily available. Many
small stores had only fragmentary records o f the March 1942
base prices.
Many o f the pricing rules were indefinite. The concepts o f
“ similar” commodities, “ comparable” commodities, and “ most
closely competitive seller o f the same class” were subject to indi­
vidual interpretation, especially for items differing in style, brand,
or design. On page 14 o f Bulletin No. 2, W hat Every Retailer
Should Know About the General Maximum Price Regulation, a
“ similar” article o f a “ competing” retailer was defined in part as
one “ which was sold by the competing retailer at the same price
or in the same price line as he (the retailer determining his price)
would have sold the article being priced had he carried it during
March.” Stated simply, this meant whatever the retailer thought
his own price should be. Simply to find out a com petitor’s most
nearly comparable product was impractical, and to determine the
max?mum March price o f the item was even more impractical.
Moreover, except for identical items actually sold and deliv­
ered in March 1942, the seller really had a choice o f conflicting
pricing methods. Although in theory the progressive pricing for­
mula specified the conditions under which each method was to be
used, in practice it allowed the seller considerable independent
judgment. If, according to his own interpretation, a wholesaler
4 Price Freezing under the Office o f Price Adm inistration, b y V ictor Abramson
(Am erican Econom ic Review, December 1942, pp. 760-761).
The Tactics o f Retail Price Control, by John Perry M iller (in Quarterly Journal
o f Econom ics, August 1943),
6 Address by Leon Henderson, Adm inistrator, Office o f Price Adm inistration, Statler
Hotel, Boston, November 19, 1942 (in Journal o f Commerce, November 20, 1942).

or retailer could not price an article under the “ same” or “ similar”
commodities rules, ne could determine his maximum price by
applying the percentage mark-up on a “ comparable” com modity
to the replacement cost o f the article to be priced. As expressed
by one writer, a “ seller may obtain almost any mark-up by judi­
cious selection o f a similar item under section 2 or o f a compar­
able com m odity under section 3 (a ).” T
Other Special Problems
There were also other special problems. W ith its freeze at
March levels, GMPR was obviously inappropriate for pricing sea­
sonal commodities such as agricultural insecticides and fungi­
cides, summer wearing apparel, and fur garments. Special regu­
lations, Maximum Price Regulations Nos. 144, 142, and 178,
respectively, were issued fo r pricing such items under special
Commodities not sold in March 1942 presented another prob­
lem. Because o f style changes, many articles of clothing to be
priced under GMPR were not identical with those sold in March
1942 and had to be priced under the “ similar” commodity ruling.
Fall clothing naturally was not sold at all in the base period and a
special regulation. Schedule No. 153, was issued, providing a costplus pricing form ula.
Alternatives in April 1 9 4 2
In this connection a question arises as to the alternatives in
April 1942. W ould some other method of price control have been
m ore feasible at that time? No attempt will be made to judge
whether or not adequate fiscal policies, promptly applied, would
have been effective in arresting the inflation spiral. The question
is simply whether or not, under the conditions then existing, an­
other type o f price control would have been possible in the spring
o f 1942, and if possible, whether it would have been more effective.
When we consider other known form s o f price control— se­
lective, cost plus a percentage mark-up, cost, plus a dollars-andcents mark-up, freeze at primary levels, specific dollars-and-cents
ceilings— we must conclude that the general freeze was most
practicable under the circumstances. Selective price control was
found by actual experience to be inadequate to cope with rapidly
changing war conditions. A system o f price control based upon
cost plus normal percentage or dollars-and-cents mark-ups, super­
imposed upon the existing pattern o f selective controls, would
have exercised very little restraint on prices, because wages and
many materials were uncontrolled. Such a system, without se­
lective controls, would have furnished almost no control at all.
Establishment o f specific dollars-and-cents ceilings, specific mark­
ups, or extensive selective controls would have been inconceivable7
The Tactics o f Retail Price Control, b y John Perry M iller (in Quarterly Journal
. o f Econom ics, August 1943, p. 501).

in the emergency because o f the laborious investigation such
controls require.
Finally, although a general freeze below the retail level would
have had the merit o f greater simplicity, control at the retail level
was plainly needed. Tremendously expanded purchasing power, in
the face o f prospectively lower civilian supplies, would have
touched off a sharp rise in prices, while huge profits at the retail
level would have made enforcement o f primary ceilings impos­
sible. A general freeze at primary levels, coupled with margin
control at retail, would have been inequitable because it would not
have distributed the inevitable squeeze. Moreover, it would have
led to concentration on higher priced goods, a result which was
delayed under GMPR. W e must therefore agree with one writer
that “ any other alternative would have been administratively im­
possible” in the spring o f 1942.®

Chapter 7 .—Econom ic Limitations
Limitations in Coverage
Appraisal o f GMPR requires careful consideration o f two
basic exemptions, i.e., agricultural commodities and wages, both
o f which were im plicit in the terms o f the original Emergency
Price Control Act. Their importance Cannot be denied. They
have been at once the root o f many o f the problems arising from
the General Maximum Price Regulation, necessitating gradual
replacement by other regulations, and a m ajor factor in the con­
tinued advance in the general price level. It is remarkable, in view
o f their importance, that GMPR proved as effective as it did.
Agricultural commodities are the raw material fo r a large
proportion Of the finished articles o f commerce. In their raw state
they have a weight o f 17 percent o f the wholesale price index o f
the Bureau o f Labor Statistics, based on 1941 values. Together
with foods and textiles, m ajor groups derived from agriculture,
they comprise 44 percent o f the Bureau o f Labor Statistics index.
Food and clothing make up 48 percent o f the consumers’ price
index o f the Bureau o f Labor Statistics on the basis o f December
1941 values, and 54 percent on the basis o f March 1943 values.
Wages are likewise an important element in total values; fo r
many industries they are the most important single element o f
Agricultural prices continuouslv exercised an upward press­
ure on prices. Neither the October 1942 amendment to the Price
Control Act, which reduced the 110 percent o f parity rule to 100
percent, nor the President’s interpretation o f parity as parity less
benefit payments, eliminated this pressure, because parity, the.
ratio o f prices received by farmers to prices paid by farmers, is8
The Tactics o f Retail Price Control, b y John Perry M iller (in Quarterly Journal
o f Economics, August 1943, p . 498).

itself affected by this rise. Since a large part o f prices paid by
farmers is fo r farm products, any increase in prices received by
farmers causes automatically a smaller rise in prices paid by
farmers and a consequent increase in the parity ratio. Even if all
industrial prices were controlled rigidly, the parity ratio would
rise with farm prices. Moreover, the 100 percent rule applied to
individual products, not to the general ratio. Thus, a rise to parity
in the price o f one com modity might necessitate an increase in
the price o f a second related com modity in order to maintain the
proper ratio, even though the price of the latter item were already
well above parity. Such was the case fo r feed and meat prices in
June 1942, when prices o f the form er were 25 percent below par­
ity, and, o f the latter, 25 percent above parity.1
As compared to farm prices, wages have constituted^ “ a less
visible but similarly powerful pressure upon price ceilings.” 23
The indirect control o f wages through price regulations, which
was hoped for in the summer o f 1941 when the Emergency Price
Control Act was being discussed, was not sufficiently effective.
This control was inoperative in two important sectors o f the econ­
omy, i.e., those producing war materials, which were largely
exempt from OPA control, and those in which profits were suffi­
cient to absorb wage increases without price adjustments. W age
increases in these sectors inevitably led to a movement o f workers
to high wage industries and, later on, to demands fo r wage in­
creases in areas where such increases could not be absorbed out
o f profits. Moreover, adequate measures to implement the wage
stabilization aspect o f the President’s seven-point program o f
April 27, 1942, were not realized8 until October 1942. Voluntary
stabilization agreements, such as in the shipbuilding and con­
struction industries, were negotiated and the National W ar Labor
Board evolved a set o f principles, including the famous “ Little
Steel” form ula,4 under which numerous dispute cases were set­
tled. “ In spite o f these efforts, however, wage increases continued
to be granted in all industries and in all parts o f the country.” 5*
These were outside the jurisdiction o f the Board, since they in­
volved no dispute and were granted voluntarily.
Larger incomes, resulting from higher wages, longer hours,
and overtime pay also exerted an upward pressure from the
standpoint o f demand. Total wages and salaries, as computed by
the Department o f Commerce, increased more than 70 percent
between August 1939 and May 1942, from 3,712 m illion dollars in
August 1939 to 6,338 million dollars in May 1942. In December
1943 they were more than 9 billion dollars, 143 percent above the
1 Price Control in Outline, by Don D. Humphrey (in Am erican Econom ic Review ,
Decem ber 1942, p. 754).
2 Second Report o f the Office o f Price Adm inistration, p . 17.
3 Idem , pp. 17-21.
4 This form ula was announced by the National W ar Labor Board on July 16, 1942,
in connection with a..dispute in the steel industry. It was based upon the principle that
workers, in order to m aintain their peacetime standards o f livin g, were entitled to a
15-percent increase in wages between January 1941 and May 1942. This was the amount
o f the increase in the consumers’ price index o f the Bureau o f Labor Statistics over the
same period. Oh this basis, wage increases up to 15 percent above January 1941 were
considered justifiable. W age increases to elim inate inequalities or to correct substandard
conditions were also deemed justifiable.
« Second Report o f the Office o f Price Adm inistration, p. 21.

prewar level. Since wages and salaries comprise about 70 percent
o f total incom e payments to individuals, they have been an im­
portant element in the rapid rise o f consumer purchasing power
and in the “ inflationary gap.” Even if basic wage rates had been
stabilized sooner, this influence would have been a factor, since a
large part o f the increase in wage earners’ income was due, not to
higher basic rates, but to longer hours o f work with payment o f
overtime rates, and to shifts to higher-wage industries. Between
October 1942, when the W ar Labor Board was authorized to sta­
bilize basic wage rates, and October 1943, Bureau o f Labor Statis­
tics data show an increase o f 9*6 cents in average hourly earnings
o f factory workers. Of this total increase, according to a study o f
the W ar Labor Board, approximately one cent was due to in­
creases in basic wage rates.®
As an element o f the total cost o f production, wages and sal­
aries were not at first a m ajor threat because higher wages could
be absorbed in the higher profits arising from greatly expanded
volume o f business. In fact, during 1940, rising production and
greater productivity m ore than offset higher wage rates, so that
unit labor costs in manufacturing industries actually declined.6
Since 1940, however, according to available data from the Bureau
o f Labor Statistics, unit labor costs have increased markedly in
many industries. (See Appendix table 2.) The problem o f rising
wages as an element o f cost will be discussed further in connec­
tion with the problem o f the distributive squeeze.
Inadequacy o f Supplementary Measures to Control Inflation
Final judgment on GMPR must not ignore the inadequacy o f
supplementaiy measures to control the basic cause o f rising
prices, namely, rising purchasing power in the face o f a declining
volume o f goods and services. GMPR never was considered a
cure-all. At the time it was issued, the President described as “in­
divisible” his seven-point stabilization program— heavy taxes on
excess profits, price and rent ceilings, wage stabilization, stabiliza­
tion o f farm prices, increased purchases o f war bonds and reduced
spending, rationing o f essential commodities, and discouragement
o f credit and installment buying. The Statement o f .Considerations
accompanying GMPR stated clearly that—
There can be no effective price control w hile at the same time there is so
large an amount o f excess purchasing pow er. . . . The universal price
ceiling serves as the fram ework for other policies w hich w ill diminish
the inflationary gap. It makes possible an effective w ar labor policy, more
stringent incom e and excess-profits taxes, ahd greatly enhanced savings.
. . . W ithout the econom ic measures, the ceiling w ould in the long run
becom e administratively unenforceable and socially harmful.

Unfortunately the companion measures were delayed and inade­
6 O f the rem ainder, higher overtim e pay caused an increase o f 1.9 cents in average
earnings; the shift o f workers to higher-paid w ork, an increase o f 1.6 cents; incentive
wage rises, m erit increases, upgrading, and individual prom otions, an increase o f 5 cents.
(National W ar Labor Board Release No. B-1225, W ashington, January 12, 1944).
7 Productivity and Unit Labor Cost in Selected M anufacturing Industries, 1919-40
(U. S, Bureau o f Labor Statistics, W ashington, February 1942).

quate. Throughout the war, fiscal policies were inadequate in face
o f the magnitude o f the “ inflationary gap” — the difference be­
tween the amount o f money available for expenditure and the
supply o f goods and services available fo r civilians.
Inequities o f Price Relationships
In addition to these econom ic handicaps to successful control
under GMPR and the administrative difficulties already discussed,
there were two m ajor econom ic limitations o f the regulation it­
self. In the first place, it froze abnormal price relationships. Sec­
ondly, a serious distributive squeeze developed, partly because o f
these abnormal relationships, but also because, o f the rising costs
o f uncontrolled elements.

The first limitation— that it froze abnormal price relation­
ships—is a general criticism o f the freeze technique. Price rela­
tionships in a competitive econom y are constantly changing. A
given price pattern exists only for a particular moment o f time
under certain conditions o f demand and supply. Such conditions
vary greatly between geographical locations and even between
individual sellers. The slightest change in any o f these conditions
may cause a shift in the price relationships. Thus, any general
freeze may result in abnormal relationships under a new set o f
demand and supply factors. Actually GMPR produced unequal
effects on different sellers. Many were caught with maximum
prices out o f line with those o f competitors in the same commun­
ity. Frequently a particular chain store, through accident or spec­
ial promotional sale or some other reason, found its maximum
prices lower than those o f another store in the same chain.
Moreover, this limitation was aggravated by the manner o f
issuance o f GMPR. Many commodities, controlled before GMPR,
were already frozen at the levels o f earlier periods, out o f line
with March 1942 prices for commodities previously uncontrolled.
Since prices, particularly at retail, were advancing sharply in the
spring o f 1942, the GMPR in theory implied a roll-back o f prices
from the middle o f May, when the regulation became effective, to
March 1942. In actuality, this period between March and May 1942
was termed a “ twilight* zone” by one writer, who states:
It is clear that prices w ere not rolled back to the March levels. The
meager evidence available indicates that w hile chain stores reduced
prices when the General Maximum Price Regulation became effective,
small independents m erely held the May levels.8

In addition GMPR, by freezing prices, also froze profit mar­
gins, which normally vary widely, in both absolute and percent­
age terms, fo r different commodities o f a given seller. A natural
outcome o f the regulation, therefore, under the conditions o f
scarcity and heavy demands which developed, was the concentra­
8 The Effectiveness o f Price Control, by Don D. Humphrey, OPA (in Survey o f
Current Business, W ashington, February 1943).

tion on production o f those items which yielded the highest net
return. Since profit margins are normally greater on higher
priced goods, this led to the “ discontinuance o f cheaper lines and
services,” which was discussed in chapter 5.

In a period o f rising prices, such as prevailed in March 1942,
retail prices may not be based upon replacement costs but upon
the lower costs o f an earlier period when the articles were pur­
chased. This causes the so-called “ retail lag,” which may be ex­
pressed either as tire length o f time which occurs between changes
in wholesale costs and corresponding changes in retail prices, or
as the percentage by which wholesale prices must be reduced to
equal the costs contained in current retail prices. The general
ceiling, by freezing this lag, caused a reduction o f margins, com ­
m only called a “ squeeze.” The amount o f this squeeze varied
widely among commodities. For some slow-m oving articles,
orders may be placed by retailers several weeks or even months
in advance; for others, such as nonmanufactured foods and meats,
for which the turn-over is rapid, average replacement and inven­
tory costs are approximately the same.91
The amount o f the squeeze19 in March 1942 was minimized by
two factors: the relatively more rapid rise o f retail prices than
o f wholesale prices in the months follow ing the attack on Pearl
Harbor, and the control o f about one-third o f the econom y prior
to GMpR at 1941 levels. Nevertheless, competent retail authori­
ties, among them Q. F. W alker, economist o f R. H. Macy & Co.,
New York, estimated the lag for some retailers as high as 15 per­
* In any case, it is clear that the 1-week difference between
the effective date o f GMPR fo r wholesalers and manufacturers
and for retailers did not provide an adequate solution o f this
problem. March 1942 maximum prices fo r wholesalers were not
the cost basis fo r March 1942 retail prices. The lag o f retail prices
behind wholesale prices was greater than expected.19 J. K. Gal­
braith called attention to a general underestimate^ o f the time fac­
tor in demand and supply relationships during this phase o f price
Another factor, rising costs o f uncontrolled elements, aggra­
vated the problem o f the distributive squeeze. Costs o f farm prod­
ucts and other uncontrolled commodities, and wages, continued
their steady advance. Prices o f farm products included in the
Bureau o f Labor Statistics wholesale price index rose 9 percent
between May and December 1942. During the same period, prices
9 The Retail Price Lag (based on Bureau o f Labor Statistics W holesale and Retail
Prices fo r 100 Comparable Item s), Office o f Price Adm inistration, W ashington, A pril
17, 1942.
10 For a quantitative measurement o f the amount o f the potential retail squeeze in
March 1942, see Price Control in Outline, by Don D. Humphrey (in Am erican Econom ic
Review, Decem ber 1942, p. 751).
11 Journal o f Commerce, May 21, 1942.
12 Price Freezing under the Office o f Price Adm inistration b y V ictor Abramson
(In Am erican Econom ic Review, Decem ber 1942, p. 766).
is Price C ontrol: Some Lessons from the First Phase, by J. K. Galbraith (Papers
and Proceedings o f the F ifty-fifth Annual Meeting o f the Am erican Econom ic Association,
January 1943).

o f all commodities still uncontrolled as o f the date o f GMPR rose
8.1 percent. This advance was accelerated in early 1943. Between
December 1942 and March 1943, prices o f the uncontrolled group
o f commodities increased an additional 9.1 percent to a level 20;5
percent above March 1942, base date o f GMPR. (See Appendix
table 3.)
Similarly, hourly wages and weekly earnings rose steadily
even after the October 1942 wage-stabilization action. In May
1942, average weekly earnings in manufacturing industries were
$35.82, compared with $23.77 in August 1939. By October 1942
they had risen to $38.89, and in December 1943 they were $44.68,
25 percent above May 1942. Average hourly earnings, which were
62.4 cents in August 1939, rose to 83.5 cents in May 1942 and 89.3
cents in October 1942, and by December 1943 were 99.5 cents, 19
percent above May 1942. As a result, wages and salaries increased
15 percent as a proportion o f total dollar value o f industrial out­
put between 1939 and 1941, and 40 percent between 1939. and
1943. u Moreover, unit labor costs increased markedly in many
industries after 1940 (see Appendix table 2.)
The original plan o f operations under GMPR contemplated
the handling o f the squeeze problem under section 4 o f the regula­
tion without “ puncturing” the retail ceilings. A roll-back o f prices
actually was effected in some cases, such as men’s and boys’ cloth­
ing, work clothing, and soap,18 but such examples are not many.
As rising costs after March 1942 aggravated the squeeze, the policy
o f maintaining the retail price level became less and less tenable.
Retail food prices, collected by the Bureau o f Labor Statistics,
increased 17.6 percent between May 1942 and May 1943. Accord­
ing to an OPA analysis,1
56 84 percent o f this rise was accounted fo r
by higher farm prices. As early as July 29,1942, rising raw mate­
rial costs forced a 15 to 25 percent increase in ceiling prices for
canned fruits and berries, and an even more general withdrawal
from the line was made in September 1942 for foods under mark­
up regulations 236, 237, and 238.
Many requests for higher ceilings were received by OPA.
In January 1944, the Price Administrator announced that 6,000
were received weekly, but that only a small number o f these were
Despite this announcement, however, it appears that the
cumulative effect o f higher wages and other production costs was
evidenced during 1943 and early 1944 by a little publicized trend
toward higher ceilings. General advances in ceiling prices were
allowed in many important industries. Among them were coal
and coke, lumber, newsprint and woodpulp, and furniture. There
were also numerous upward adiustments for specific items. Be­
cause the President’s “ hold-the-line” order o f April 8, 1943, for14 Industry Survey, November 1943 (Bureau o f Foreign and Domestic Commerce,
U. S. Department o f Commerce, W ashington).
. M
15 Progress o f Price Regulation to Septem ber 1942, b y Saul Nelson (in Monthly
Labor Review, October 1942).
„ _ #
16 One Year o f Retail Price Control (P rice Control Report No* 15, Office o f Price
Adm inistration, June 1943).
17 Journal o f Commerce, January 19, 1941,

bade increases fo r cost-of-living items, these adjustments were
confined chiefly to industrial goods. The problem o f the distribu­
tive squeeze, as regards cost-of-living commodities, was handled
by an increasing use o f Government subsidies.
Conflicts With Other Objectives

This discussion has assumed the desirability o f a stable price
level, but in passing it seems appropriate to comment briefly on
the conflict o f this objective with other aspects o f our war econ­
omy. The most important o f these, conflicts is that o f maximum
production and price stabilization. Reconciliation o f the two ob­
jectives has been difficult, because they have been the responsibil­
ity o f two different Government agencies— the W ar Production
Board and the Office o f Price Administration.
Historically, higher prices have induced greater output. This
is true because they offer a profit incentive not only to operating
firms but also to submarginal firms, whose costs o f production are
higher. Price stabilization eliminates this incentive. During the
early days o f the defense program, when industry was able to
expand production by greater utilization o f unused capacity, the
lack o f this incentive was obscured. Increased output brought
decreased unit costs o f production and higher profits. But as
operations increased to capacity, it became desirable to draft less
efficient marginal operators. Under price control, higher prices
were impossible, and as a result there were many complaints, e.g.,
as in the petroleum industry, that ceilings were hampering pro­
duction. During 1943 and 1944, OPA was forced by declining pro­
duction to raise the .ceilings on a number o f items important to
the war^ effort. Am ong them were lumber, wood pulp, and low priced civilian goods. In some fields the conflict resulted in rather
serious changes in merchandising practices. In textiles, fo r exam­
ple, there has been a noticeable tendency for manufacturers to
sell goods in the finished state rather than in the gray, because
profit margins are greater on finished goods.18 In some cases,
notably nonferrous metals and petroleum, the conflict o f objec­
tives was resolved by the payment o f subsidies to marginal

Another continuing conflict was that o f equitable- versus
stable prices. Primary consideration o f OPA was the maintenance
o f a stable retail price level, even though refusal to grant higher
prices might entail hardships fo r individual sellers or specific
commodities. Under this policy the less efficient were forced out
o f business. In a losing battle to support its original pronounce­
ment, when GMPR was issued, that the retail ceilm g would not be
punctured, OPA stoutly resisted continuing appeals o f industry
is Journal o f Commerce, February 10, 1944.

and, sometimes, o f other Government agencies for higher prices.
Its basic policy under the industry-earnings standard, was not to
grant higher ceilings, even when the evidence clearly showed an
unabsorbable squeeze on a specific commodity, if the over-all
industry profits were adequate. However, strong objections were
raised to this policy, and OPA later amended it, particularly when
curtailment o f production threatened.
Another facet o f this conflict arose from the prewar goal o f
equitable prices fo r farmers. The parity concept, expressly stated
by Congress,19 sought the restoration o f the 1910-14 relationship
o f farm and industrial prices. Since this relationship had not yet
been restored in March 1942, it was impossible to freeze prices
o f agricultural commodities. As has been seen, higher prices fo r
these proved to be one o f the greatest handicaps to OPA in the
maintenance o f the March 1942 general price level, which was the
avowed purpose o f the legislation.
There was little attempt to stabilize basic wage rates until
October 1942, and no attempt to stabilize total incom e from .wages
and salaries. There never was serious disagreement with the prem­
ise that prices could not be effectively controlled without control
o f wages, but, except for Bernard Baruch, few officials in this
early period explicitly advocated the comprehensive control that
wage regulation implied.
Lack o f Quality Control
Price control in theory is not incompatible with quality con­
trol. In fact, true price control would require adequate regula­
tion o f standards o f quality. OPA regulations expressly forbid the
reduction o f quality or quantity without corresponding price reduc­
tions but this provision was virtually unenforceable, particularly
for items covered by GMPR. Efforts o f OPA to link price control
effectively with quality control by grade labeling, as for hosiery
and canned foods, met determined opposition o f Congress and o f
business interests. As a result, quality deterioration (see chapter
5) minimized the apparent success o f OPA in maintaining price

Chapter 8 .—Econom ic Accomplishments
There can be little doubt that, despite tremendously expanded
war production and national income and greatly curtailed civilian
production, the dangerous price rise which threatened in the
spring o f 1942 was prevented. Americans generally may have had
to pay m ore fo r their food and clothing, and some articles may
have been unobtainable, but on the whole their standard o f living
19 Section 2 o f the A gricultural Adjustm ent A ct o f 1933; section 2 o f the A gricul­
tural Marketing Agreem ent Act o f 1937; section 301 o f the A gricultural Adjustm ent"Act
o f 1938.

has not suffered greatly. Those who can remember the sharp
price increases o f W orld W ar I are fully aware o f the more stable
conditions o f W orld W ar n . General opinion gives OPA a large
share o f the credit fo r preventing inflation. Even the bitterest
critics o f OPA usually w ill admit that price increases would have
been greater in the absence o f price control.
Determination o f the effectiveness o f GMPR as a specific tool
o f price control distinct from other measures is not so obvious..
Final decision must rest, o f course, upon the movement o f prices.
It should not be unduly swayed by consideration o f the limitations
o f the regulation, or the lack o f supplementary measures to con­
trol inflation, or the complexity o f the control problem. However,
despite these difficulties, it seems correct to conclude that GMPR
“ did hold down prices.” 1
The discussion which follow s is based upon the movements o f
official price indexes. Although these indexes have been carefully
constructed they cannot measure all the price increase which
occurs as a result o f quality deterioration (see pages 31-33).
Nevertheless they give fairly conclusive evidence o f the effective­
ness o f GMPR.
Price Movements

The best test o f the effectiveness o f GMPR can .be made at the
consumer level, since there was no control at retail prior to the
date o f GMPR. The sharp rise in consumers’ prices during the 5
months follow ing the attack on Pearl Harbor was abruptly halted.
From increases ranging from 0.7 to 1.4 percent per month in this
period, monthly advances were cut to 0.5 percent or less in the
follow ing year, except fo r a few months during which there were
sharply higher prices fo r fresh fruits and vegetables. During the
whole period from May 1942 to December 1943, the Bureau o f
Labor Statistics consumers’ price index rose only 7.2 percent, or
0.4 percent per month, compared with 15.1 percent, or 0.9 percent
per month, from January 1941 to May 1942. The follow ing state­
ment compares the percentage changes fo r these two periods for
the index as a whole and for its subgroups:
Percent o f change In consumers* pricesi
May 1942
December 1943

January 1941
May 1942

items ........................................



Food ......................................
Clothing ....................... .........
Rent ......................................
Fuel, electricity, and ice * * ..
Housefurnishings ............. . .
Miscellaneous .......................


+ 8.8

l Source: TJ. S. Bureau o f Labor Statistics.
i One Year o f Retail Price Control (P rice Control Report No. 15, Office o f Price
Adm inistration).

Likewise, price increases at the wholesale level were smaller
after GMPR than before. From May 1942 to December 1943, the
Bureau o f Labor Statistics comprehensive index rose only 4% per­
cent compared with 22 percent between January 1941 and May
1942. In the 6 months after GMPR, the index rose only lVfc per­
cent in contrast to 5.6 percent between the attack on Pearl Harbor
in December 1941 and May 1942. (Price movements for the m ajor
groups in the wholesale price index are shown fo r various periods
in Appendix table 5.) For chemicals and allied products, fo r
example, which were controlled largely by GMPR, prices rose
only 3 percent in the 19 months between May 1942 and December
1943 compared with 24 percent in the 16 months from January
1941 to May 1942.

Comparison o f the movements o f controlled and uncontrolled
prices during the first year after issuance o f GMPR gives striking
p roof o f the effectiveness o f GMPR in preventing higher prices
for commodities subject to its control. Between May 1942 and
December 1942, the comprehensive wholesale price’ index o f the
Bureau o f Labor Statistics rose 2.2 percent. Prices o f commodities
controlled by GMPR or earlier regulations increased only 0.3
percent, whereas prices o f commodities not controlled as o f the
date o f GMPR rose 8.1 percent during this period. A similar com ­
parison o f price changes between May 1942 and March 1943 shows
an advance o f 1.1 percent for those controlled as o f May 1942 and
18.0 percent fo r those uncontrolled. (See Appendix table 3.)
Price movements o f controlled and uncontrolled foods show
the same contrast. In December 1942, wholesale prices o f foods
controlled by GMPR were at the same level as in May 1942, and in
March 1943 they were only 4 percent above the March 1942 base
period. W holesale prices o f uncontrolled foods, on the other hand,
increased 11 percent from May to December 1942, and in March
1943 they were 20 percent above the base period. (See Appendix
table 4.)
Between May 1942 and May 1943, retail food prices'included
in the Bureau o f Labor Statistics consumers’ price index, rose 17.6
percent as a group. However, foods controlled by GMPR increased
only 4.1 percent in price, while prices o f foods not controlled by
GMPR, which had a weight o f about 40 percent in the food index,
increased nearly 10 times as much, as shown by the follow ing
w eight

A ll foods ....................................
Controlled by G M P R ...............
Not controlled by GMPR..........
Controlled after G M P R ............
U ncontrolled (May 1943) ........



Percent o f
May 1942 to
May 1943


2 One Year o f Retail Price Control (Price Control Report No. 15* Office o f Price
Adm inistration).


Corroborative evidence o f the effectiveness o f GMPR in con*
junction with other price controls can be seen from a comparison
with W orld W ar I experience, particularly at the retail level, since
there was little or no control at this level during the earlier period.
As may be seen from the follow ing figures, retail price increases
during W orld W ar I were several times greater than during a
similar period in W orld W ar II:
Percent o f Increase In consumers pricesi
Aug. 1939
Dec. 1943

A ll items .......................................
Food ......................................
Clothing ......................................
Rent ......... ..............................
Fuel, electricity, and i c e ...
Housefurnishings .......................
Miscellaneous .............................

July 1914
Nov. 1918

26.2__________ 61.8


1 Source: U. S. Bureau o f Labor Statistics.

A similar comparison may he made o f wholesale price move­
ments during the two war periods, as follow s:
Percent o f Increase in wholesale pricesi
Aug. 1939
Dec. 1943

A ll commodities ...........................
Farm products .....................
Foods ................... ; ...............
Hides and leather ^products.
Textile products .................
Fuel and lighting m aterials.
Metals and metal p rod u cts..
Building materials .............
Chemicals and allied products
Housefurnishing goods . . . .
Miscellaneous com m odities.

July 1914
Nov. 1918





i Source: U. S. Bureau o f Labor Statistics.

It w ill be noted that, except for farm products, which were not
controlled until a late date, increases during W orld W ar II were
much smaller than during W orld W ar I.

Chapter 9 .—Conclusion
The theory o f general price control, as exemplified in the
General Maximum Price Regulation, was discussed thoroughly
during the hearings on the Emergency Price Control Act in the

fall o f 1941. There was little disagreement concerning its theo­
retical desirability but, fo r practical and political reasons, it was
discarded at that time in favor o f selective price control, despite
the example o f Canada.
The attack on Pearl Harbor in December 1941 necessitated
profound changes in the American econom y and selective price
controls became inadequate to cope with the new conditions. By
the spring o f 1942 strong inflationary pressures, which had been
latent in the econom y even before our entry into the war, were
causing a dangerous price rise. Emergency action on a wide scale
was imperative to prevent serious inflation.
It was to meet this emergency that the General Maximum
Price Regulation was issued on April 28, 1942. Conceived as a
corollary to other direct measures to control inflation, the order
was as comprehensive as was possible under the terms o f the
Emergency Price Control Act. It was admittedly a stop-gap to be
superseded in time by more specific regulations. Many com m od­
ities actually were transferred subsequently to m ore appropriate
regulations. Moreover, because o f the comprehensive character of
GMPR, numerous problems arose which required adjustment,
amendment, and clarification-. Probably, however, it was the most
feasible action in the emergency.
Because o f the nature o f GMPR ceilings, there is little con­
clusive statistical evidence to show the degree o f compliance with
the regulation, but admittedly it was not good. There were nu­
merous outright violations, some o f which were w illful, but many
o f which arose from ignorance or confusion. In addition, many
devices fo r circumventing the regulation were found and put into
practice. Although evasions were possible under other form s o f
price regulation, they were more difficult to detect under GMPR
and consequently m ore numerous.
Administration o f GMPR proved to be difficult and effective
enforcement almost impossible. Ceilings were a matter o f indi­
vidual interpretation and there was considerable latitude fo r indi­
vidual judgment. Little attempt was made to com pel rigid com ­
pliance. The educational problem alone was difficult. Moreover,
in its efforts to insure equity, OPA attempted to cover all contin­
gencies by regulation. The resultant complexity, as well as the
impracticability o f the regulation, soon occasioned severe criticism
o f GMPR.
GMPR also was hampered by two serious limitations imposed
by the terms o f the Emergency Price Control Act, namely, absence
o f initial controls over agricultural prices and wages, which were
not established until later. Their exemption rendered OPA’s
avowed polity o f maintaining the March 1942 price level virtually
impossible, as later events proved. Moreover, expected companion
measures, such as forced savings and adequate taxation, were not
enacted. Price control could only minimize price increases. It
could not remove the basic inflationary threat—rising purchasing
power imposed upon a declining volume o f goods.
In additidn to these handicaps to effective price control under
GMPR were certain econom ic limitations o f the regulation itself.

Inequitable price relationships were perpetuated under the freeze.
Some were already present in March 1942 and others developed
with the increasing pressure o f rising costs against fixed ceilings.
As the months passed, it became more and more difficult to main­
tain March 1942 ceilings and OPA was compelled frequently to
grant upward adjustment o f ceilings. GMPR, moreover, was
unable to cope with hidden price increases through quality deteri­
oration or other means,
The regulation proved remarkably effective, despite its short­
comings and the obstacles which it faced. Price increases which
can be measured by official indexes were held to a minimum.
This is evident from comparison o f price movements before and
after GMPR, as well as during W orld W ar I and W orld W ar II.
The contrast between price increases o f commodities controlled
by GMPR and those not controlled also gives unmistakable proof
o f its effectiveness. In retrospect, therefore, the regulation ap­
pears to have been a necessary and successful emergency pricecontrol measure which subsequently was superseded in large part
by more appropriate regulations.
It is not possible within the scope o f this report to discuss
other anti-inflation measures or the merits o f price stabilization.
Mention .is made o f some conflicts with other objectives, but
evaluation o f these conflicts must be reserved for another analysis.
Speculation as to the relative efficacy o f other anti-inflation meas­
ures is also beyond the limits o f this study.

Appendix.— Detailed Tables
Table 1 .—Percentage changes in posted average retail celling prices o f foods
covered by the General Maximum Price Regulation9
from October 1 3 ,1 9 4 2 9 to December 1S9 1942


A ll

Small Medium- Large
pendent pendent

Macarpni, 8-oz. pkg.........................
Bread, w hite, 16 oz.........................
Bread, whole wheat, 16 oz..............
Bread, rye, 16 oz...............................
Vanilla cookies, plain, 1 lb .............
Soda crackers, 1 lb ...........................

+ .3
+ .3
+ 1.1


Steak, sirloin, 1 lb ...........................
Steak, round, 1 lb .............................
Boast, chuck, center cut* bone in,
l i b ...................................................
Roast, rib , bone in , 1 lb ..................
Cutlets, veal, steak, best cut, 1 lb.
Chops, pork, center cut, 1 lb .........
Bacon, sliced, % lb . pkg..................
Ham, sliced, smoked, lb ..................
Ham, whole, smoked, lb ................
Salt pork, bellies, lb ........................


+ 1.0

+ 1.0
- 1.1

+ 1.0
- 2.1

+ 2.2
+ 1.0

+ 1.1




( 1)


+ .4




+ 2.8




- 1.8
+ 1.0

- 1.6


+ 1.2
+ 1.0


+ .3
- 1.0

+ 2.0
+ .7
+ 1.3


+ 1.1
+ 8.2
+ 2.6
+ 1.8

- 1.1

- 2.8
- 1.6


- 1.6

- 2.6


+ .7


+ .3


- 1.1
+ 1.1


+ .4
+ .7

- 2.6




Oleomargarine, 1 lb ........................
Salad dressing, pint ja r .................
Mayonnaise, pint ja r ........................
Corn syrup, 24 oz.............................
Molasses, 13 fl. oz.............................



+ 1.1

+ .3

+ 2.2
+ .7

+ .9

+ .9
+ 2.0
+ 2.1
+ .5

i Less than a tenth o f 1 percent increase.




+ .5
+ 6.8




- l .*8
- 2.2


m arket

+ .3

M ilk, fresh, 1 q t .............................
Bananas, 1 lb ....................................
Coffee, 1 lb .......................................
Tea, black, % lb ...............................
Cocoa, % lb ....... ................................
Chocolate, baking, unsweetened.
% U».................................................












+ .3


Table 2 .—Unit labor cost In selected manufacturing industries, 1940-451
[1 939= 100]


Agricultural implements ...........
Boots and shoes ...........................
Bread and other bakery products
Cane-sugar refining ......................
Canning and preserving g ro u p ...
Canned and preserved fruits
and vegetables ......... , .........
Canned and cured f is h .........







110 9











154.6 „


Cement ............................................
Clay construction p ro d u cts.........
Coke group .....................................
Condensed and evaporated m ilk.
Confectionery ............................
Cotton goods ...................................


95 0




Fertilizers ..................................
Flour and other grain-m ill
products ................................. .
Glass products ...........................
Hosiery ........................................
Ice cream ...................................
Leather ........... .......................... .
Lumber and tim ber products:
Sawmills .............................


110 6

















102 7










Malt liquors ...................................
Newspaper and periodical printing
and publishing ............................
Nonferrous m etals: Prim ary
smelters and refiners ...............
Paints and varnishes ..................
Paper and pulp group .................
Petroleum refining ........................
Rayon and allied products.........


















Slaughtering and meat packing.
Tobacco products group .............
Cigars ......................................
Cigarettes ...............................
Chewing and smoking
tobacco and snuff .............
W oolen and worsted goods..........


















l Source: Productivity and Unit Labor Cost in Selected M anufacturing Industries,
1939-1945 (U. S. Bureau o f Labor Statistics).

Table 3 *—Indexes o f wholesale prices,1 controlled and uncontrolled2
[March 1 4, 1942=1001
Week ending—


16,1942............. ...........
18,1942............. ...........
12,1942............... ..........
12,1942.................. .

A ll com m oditiess


Controlled Uncontrolled
as o f
as o f
May 11,1942 May 11,1942s

















1 Source: U S. Bureau o f Labor Statistics.
2 Fixed-base, constant-com position index num bers.
8 Excluding gas and electricity, w hich are regulated b y state or m unicipal ftgeneltgx

Table 4 .—Indexes o f wholesale prices o f foods,1 controlled and uncontrolled2
[M arch 14, 1942=1001


Controlled Uncontrolled
as o f
as o f
May 11,1942 May 11,1942


W eek ending—
















1 Source: U. S. Bureau o f Labor Statistics.
2 Fixed-base, constant-com position index num bers.

Table 5 *—Percentage changes in wholesale prices for selected periods1
Percent o f change from —
Commodity group

11 com m odities...............................
Farm products..........................
Hides and leather p rodu cts..
Textile products........................
Fuel and lighting m aterials..
Metals and m etal prod u cts...
Building m aterials...................
Chemicals and allied products.
Housefurnishing goods...........
Miscellaneous com m odities...
.11 com m odities other than farm
products...................; .................
.11 com m odities other than farm
products and fo o d s .....................

Aug.1939 Dec.1941 Dec.1941 May 1942 Jan. 1941 Mayl942
Mar.1942 Mar.1942 Mayl942 Dec.1942 Mayl942 Dec.1943



+ 8.6
+ 6.2
+ 1.7
+ .5




+ 10.2 ;
+ 6.8

+ 2.2




+ 6.8

+ 2.1
+ 6.6
+ 1.8



+ 8.2



+ .7


+ 1.6

+ 1.6

+ 2.1



+ 2.0









l Source: U. S. Bureau o f Labor Statistics.

Table 6,^—Percentage changes in consumers9 prices for selected periods1
Percent o f change from —
Commodity group

Aug.1939 Dec.1941 Dec.1941 Mayl942 Jan.1941 Mayl942
Mar.1942 Mar.1942 Mayl942 Dec.1942 May 1942 Dec.1943

A ll item s............................................





4+5 1


Fuel, electricity, and ice .......
H ousefurnishings............. ........
M iscellaneous.............................



+ 1.6


+ 22.1
+ 8.8

- 1.6


+ 2.2

i Source: U. S. Bureau o f Labor Statistics.





Articles and B ooks
Abramson, V ictor: Price Freezing Under the Office o f Price Administra­
tion (in American Econom ic Review, Princeton, N. J„ December
American Statistical A ssociation: An Appraisal o f the U. S. Bureau o f
Labor Statistics Cost o f Living Index (in Journal o f the American
Statistical Association, Boston, Vol. 38, December 1943).
Baruch, Bernard M.: Taking the Profits Out o f W ar, New York, 1936.
Blair, John M. and Ulmer, M elville J., under the direction o f Saul N elson:
Wartime Prices, Part I—August 1939 to Pearl Harbor. U. S. Bureau o f
Labor Statistics Bulletin No. 749, W ashington, 1944.
Department o f Munitions and Supply: W artime Controls in Canada. Ot­
tawa, Canada, March 9, 1942.
Galbraith, J. K .: Price C ontrol: Some Lessons from the First Phase. Papers
and Proceedings o f the Fifty-fifth Annual Meeting o f th* American
Econom ic Association, January 1943.
Hardy, Charles 0 .: W artime Control o f Prices. W ashington, Brookings
Institution, 1940.
Hirsch, Julius*: Evaluation o f Our Wartime Price Control (in Journal o f
Marketing, New York, January 1944).
Humphrey, Don D .:
Price Control in Outline (in American E conom ic Review, Princeton,
N. J., December 1942.)
The Effectiveness o f Price Control (in Survey o f Current Business,
W ashington, February 1943.)
Miller, John P erry: The Tactics o f Retail Price Control (in Quarterly
Journal o f Econom ics, Boston, Mass., August 1943).
Mikesell, Raymond F. and Galbreath, C. Edw ard: Subsidies and Price Con­
trol (in American Econom ic Review, Princeton, N. J., September 1942).
National Resources Committee: Structure o f the American Econom y. Wash­
ington, June 1939.
Nelson, Saul: Progress o f Price Regulation to September 1942 (in Monthly
Labor Review, W ashington, October 1942).
Office o f Price Adm inistration:
Bulletin No. 1: The General Maximum Price Regulation. W ashington,
Bulletin No. 2: What Every Retailer Should Know About the General
Maximum Price Regulation. W ashington, May 1942.
D irectory o f Commodities and Services. W ashington, 1943.
One Year o f Retail Price Control (May 1942-May 1943) (P rice Control
Report No. 15). W ashington, 1943.
Quarterly Reports: First Quarterly Report for the Period Ended April
30, 1942, Second Report Covering the Operations o f the Office
between May 1 and July 31, 1942, Third Quarterly Report for the
Period Ended October 31, 1942, Fourth Quarterly Report for the
Period Ended January 31, 1943, Fifth Quarterly Report for the
Period Ended April 30,1943, Sixth Quarterly Report for the Period
Ended June 30, 1943, Seventh Quarterly Report for the Period
Ended September 30, 1943.
The Retail Price Lag (based on Bureau o f Labor Statistics W holesale
and Retail Prices for 100 Comparable Item s). W ashington, April
17, 1942.
Division of Research: Facing the Price Problem. W ashington, April
23, 1942.
Price Analysis and Review Branch: The Effectiveness o f Selective
Price Control (Price Control Report No. 7). W ashington,

R ostow : Some Aspects o f Price Control and Rationing, .Condensation o f
remarks and discussion at the annual meeting o f the Conference on
P rice Research at the National Bureau o f Econom ic Research, May 8,
1942 (in American Econom ic Review, Princeton, N. J., September
Taylor, Kennedy W .: W artime Control o f Prices (in Canadian W ar E co­
nom ics, Toronto, Canada, 1941).
Ulmer, M elville J.: Indirect Price Increases (in Monthly Labor Review ,
W ashington, November 1942.)
U. S. Department o f Commerce, Bureau o f Foreign and Dom estic Com­
m erce: Industry Survey. W ashington, November 1943.
U. S. Department o f Labor, Bureau o f Labor Statistics:
Productivity and Unit Labor Cost in Selected Manufacturing Indus­
tries, 1919-1940. W ashington, February 1942.
Productivity and Unit Labor Cost in Selected Manufacturing Indus­
tries: 1939-1945. W ashington, 1946.
U. S. House o f Representatives: Hearings before the Committee on Bank­
ing and Currency, House o f Representatives (77th Cong.) on H.R. 5479,
superseded by H.R. 5990, a Bill to Further the National Defense and
Security by Checking Speculative and Excessive Price Rises, Price
Dislocations, and Inflationary Tendencies, and fo r other Purposes.
W ashington, 1941-1942.
W ebb, Laura B row n:
Effects o f Rising Costs on Quality o f W earing Apparel (in Monthly
Labor Review, W ashington, February 1941).
Recent Changes in the Character o f Civilian Textiles and Apparel (in
Monthly Labor Review, September 1943).
W ilson, Kenneth R .: Wartime Prices and Trade Board (Booklet No. 1).
Ottawa, Canada, December 1941.
Newspapers and Periodicals
American Lumberman, Chicago, 111.
American Metal Market, New York, N. Y.
Business W eek, New York, N. Y.
Chicago Journal o f Commerce, Chicago, 111,
CIO News, W ashington, D. C.
Commercial Bulletin, Boston, Mass.
Consumer Reports, New York, N. Y.
D aily Metal Reporter, New York, N. Y.
D aily Metal Trade, Cleveland, 0 .
D aily News Record, New York, N. Y.
Drug Topics, New York, N. Y.
Furniture W orld, East Stroudsburg, Pa.
Hardware Age, New York, N. Y.
Journal o f Commerce, New York, N. Y.
New York Times, New York, N. Y.
Northwestern Miller, Minneapolis, Minn.
PM, New York, N. Y.
Southern Lumberman, Nashville, Tenn.
Steel, Cleveland, 0 .
W all Street Journal, New York, N. Y.
W ashington News, W ashington, D. C.
W ashington Post, W ashington, D. C.

Docum entary R eferences
Emergency Price Control Act o f 1942 (Public Law No. 421, 77th Cong., 2d
sess.), W ashington, 1942.
Executive Order No. 9328, issued by the President April 8, 1943, The W hite
House, W ashington.
Executive Order No. 9250, issued by the President October 3, 1942, The
W hite House, W ashington.
Orders in Council, P.C. 2516, P.C. 3998, and P.C. 6834: The Wartime Prices
and Trade Board Regulations. Ottawa, Canada, September 3, 1939,
December 5, 1939, and August 28, 1941.
Order in Council, P.C. 8253: W artime Wages and Cost, o f Living Bonus
Order. Ottawa, Canada, O ctober 24, 1941.
Order in Council, P.C. 8527: The Maximum Prices Regulations. Ottawa,
Canada, November 1, 1941.
National W ar Labor B oard: Press Release No. B-1225, W ashington, Janu­
ary 12, 1944.
Office o f Price Adm inistration: Press releases and price regulations, Wash­
ington, 1941-1944.
W ar Production B oard: Press Release No. 2467, February 6, 1943,
W ashington, D. C.
Bowles, Chester, at the New York Times Hall, New York, N. Y., February
29, 1944 (in New York Times, New York, March 1, 1944).
Henderson, Leon, before the St. Louis Chamber o f Commerce, Jefferson
Hotel, St. Louis, Mo., November 12, 1942 (OPA Release No. I il8 , Wash­
ington, 1942.)
Ring, Right Hon. W . L. Mackenzie, M. P., Prime Minister o f Canada.
Broadcast, October 18, 1941. Hearings before the Committee on Bank­
ing and Currency, House o f Representatives (77th Cong.) on H.R. 5479,
superseded by H.R. 5990.