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OP A Unwittingly Stimulated Consumption 



The contention is made that the consumer himself con- 

 tributed to the shortage by gorging himself on the highly 

 prized foods. Evidently the consumer felt no guilt, for it was 

 he who clamored loudest about the shortage. 



In order to forestall inflation, OPA set low ceiling prices 

 on the highly prized foods. With advancing wages, full em- 

 ployment, low taxes, and little else to buy, increased con- 

 sumption of the highly prized foods meat, milk, butter, 

 cheese, and eggs was encouraged. 2 



Since the dawn of recorded prices food has been effectively 

 rationed by price. Low prices encouraged the consumption 

 of articles that were in abundance. Conversely, high prices 

 discouraged consumption and therefore rationed supplies 

 when they were short. Under a system of rigid ceiling prices, 

 this simple mechanism does not work. 



The nation has been trying to prevent visible inflation by 

 fixing low ceiling prices, and in so doing has effectively en- 

 couraged consumption of the highly prized foods. Under 

 such a system there would be a continuous shortage. Even 

 with a large supply of food for civilian consumption, faulty 

 rationing would produce many apparent shortages. 



Even the lowly potato, one of our cheapest foods, was 

 badly handled by the administrators. Potatoes are a rela- 

 tively perishable crop and cannot be carried from one crop 

 season to the next. The adjustment. of supplies and require- 

 ments is most critical in the spring at the tail-end of the old 

 crop and before new potatoes come on the market. At that 

 time stocks of old potatoes are either thrown to the hogs or 

 carefully doled out by high prices. 



Following the establishment of ceiling prices for potatoes 



2 Taxes have been raised and food prices have risen, but not in proportion 

 to wages and not as much as economically desirable. 



