Office of Price Administration

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The Office of Price Administration (OPA) was a federal agency in World War II that controlled prices and wages and ration consumer goods. Its goal was to control inflation and guarantee minimum essential goods to civilians, and also to bring more equality to American society.

OPA was established within the Office for Emergency Management by the President Franklin D. Roosevelt by Executive Order 8875 on August 28, 1941. Its predecessor agency was known as the Office of Price Administration and Civilian Supply (OPACS). It became an independent agency and was renamed under the Emergency Price Control Act, January 30, 1942. The functions of the OTC were originally to stabilize prices(price controls) and rents after the outbreak of World War II. The OPA had the power to place ceilings on all prices except agricultural commodities, and to ration scarce supplies of other items, including tires, automobiles, shoes, nylon, sugar, gasoline, fuel oil, coffee, meats and processed foods. At the peak, almost 90% of retail food prices were frozen. It could also authorize subsidies for production of some of those commodities.

President Harry Truman responding to pressures from the left and especially labor unions, kept the OPA operating for two years after the war ended. The Republicans made its shortcomings a major campaign issue in the Congressional elections of 1946, which produced one of the biggest GOP landslides in history. The OPA was finally abolished effective May 29, 1947. Famous employees include economist John Kenneth Galbraith (a top official) and lawyer Richard Nixon (a very junior official).

Administrators of the office:

Contents

Confusion in Washington

In 1940, Roosevelt named a planning board called the National Defense Commission with three heads. Edward Stettinius, CEO of United States Steel, managed one section on industrial materials; union boss Sidney Hillman headed one on labor and Leon Henderson a third on price stabilization. It floundered. In January, 1941, it became the ill-fated Office of Production Management (OPM) under William S. Knudsen of general Motors and Sidney Hillman. By August it was snarled. Roosevelt named a super bureau over it called the Supply Priorities and Allocation Board (SPAB) with Vice President Henry Wallace at its head. After the attack on Pearl Harbor the War Production Board (WPB) under Donald Nelson took over. In April 1941 Leon Henderson and his Price Stabilization Division were made a separate bureau and called the Office of Price Administration with Henderson at its head. As one observer commented, “The odor it created still lingers amongst us and it will remain for all time a classic for students in what not to do and how not to do it.” [1]

At first OPA began with Henderson and a staff of only 84. In May, 1942 OPA asked for $110 million dollars and a staff of 90,000. In 1943 it cost $153 million and in 1944 it had a staff of 53,500 paid workers and 204,000 volunteers, mostly housewives who helped their neighbors and storekeepers figure out the system and watched out for black markets.

Price fixing

High prices means inflation. Inflation is the expansion of the quantity of money available to buy things in excess of the goods available for purchase. If the number of dollars in circulation increases without an increase in the volume of goods for sale, inflation, or a raise in prices, is the result.

OPA put out press releases claiming that the government mandated fixed price scales were being maintained. But a small proportion of goods went into the black markets where prices in the end were far higher.

Administrative Justice

Then the OPA set up a nationwide network of courts before which citizens could be hauled up and tried for breaking laws enacted by OPA bureaucrats. If convicted, they could, under OPA rulings, have their ration cards taken away from them and sentenced to starve.

Soviet infiltration

The OPA was infiltrated by the Soviet KGB during its existence. Soviet spies Charles Kramer and William Remington within OPA.

see also

Further reading

  • Grether, E. T. "Price Control and Rationing under the Office of Price Administration: A Brief Selective Appraisal," The Journal of Marketing, Vol. 7, No. 4 (Apr., 1943), pp. 300-318 in JSTOR
  • Harris, Seymour E. Inflation and the American Economy. (1945) online edition
  • Jacobs, Meg. "'How About Some Meat?': The Office of Price Administration, Consumption Politics, and State Building from the Bottom Up, 1941-1946," Journal of American History, Vol. 84, No. 3 (Dec., 1997), pp. 910-941 in JSTOR
  • Mansfield, Harvey. A short history of OPA‎ (1948) 332 pages; by a leading conservative scholar
  • Mills, Geofrey, and Hugh Rockoff. "Compliance with Price Controls in the United States and the United Kingdom During World War II," Journal of Economic History, Vol. 47, No. 1 (Mar., 1987), pp. 197-213 in JSTOR


References

  1. The Roosevelt Myth], John T. Flynn, Fox and Wilkes, 1948, Book 3, Ch. 7, The Happiest Years of Their Lives.
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