Changes

The '''Office of Price Administration''' ('''OPA''') was established within the [[Office for Emergency Management]] by the [[United States Government]] 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.  The OPA was abolished effective May 29, 1947 by the General Liquidation Order issued March 14, 1947 by the OTC Administrator. Some of its functions were taken up by successor agencies in the Departments of Agriculture, Justice and Commerce, and the [[Reconstruction Finance Corporation]]. Famous employees include economist [[John Kenneth Galbraith]]. Soviet spies [[Charles Kramer]] and  [[William Remington]] also work within OPA.

The '''Office of Price Administration''' ('''OPA''') was established within the [[Office for Emergency Management]] by the [[United States Government]] 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.   

Administrators of the office:

Administrators of the office:

*[[Chester Bliss Bowles]], 1943-1946

*[[Chester Bliss Bowles]], 1943-1946

==Mismanagement==

==Confusion in Washington==

In 1940, Roosevelt named a planning board called the National Defense Commission with three heads. Edward Stettinius, of United States Steel, managed one section on industrial materials, [[Sidney Hillman]] another 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 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.” <ref>''The Roosevelt Myth''], John T. Flynn, Fox and Wilkes, 1948, Book 3, Ch. 7, [http://www.rooseveltmyth.com/cgi-bin/framed/2767/book/fdrmyth_Chapter_Seven___The_Happiest_Yea.htm ''The Happiest Years of Their Lives''].</ref>

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.” <ref>''The Roosevelt Myth''], John T. Flynn, Fox and Wilkes, 1948, Book 3, Ch. 7, [http://www.rooseveltmyth.com/cgi-bin/framed/2767/book/fdrmyth_Chapter_Seven___The_Happiest_Yea.htm ''The Happiest Years of Their Lives''].</ref>

At first OPA began with Henderson and 84 office assistants. In August, 1941 a new bill, reorganizing OPA, was being considered by Congress. A member asked if the plan would not require a staff of 100,000. Henderson replied: "Oh, no. This bill will be practically self-enforcing." The next year  May, 1942  Henderson asked for 110 million dollars and said he needed a staff of 90,000. The next year it cost 153 million and the following year it had a staff of 53,500 paid workers and 204,000 volunteers.

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.

 

At one time there was an almost complete breakdown of food distribution throughout the United States. The paper work required of an ordinary small merchant was so extensive that it was practically impossible to comply with. Small food distributors were going out of business by the tens of thousands a month. Whole states were insufficiently supplied with meat, butter, lard or potatoes for two months at a time. OPA fixed the price of Louisiana potatoes at $2.50 per cwt., and the price of Texas potatoes at $3.75 per cwt. Louisiana potatoes were just trucked across the line and sold as Texas potatoes. Uniform prices on farm products for all markets very nearly starved out many large cities. <ref>Lawrence Sullivan, ''Bureaucracy Runs Amuck'', Bobbs, Merrill, 1944.</ref>

==Price fixing==

==Price fixing==

High prices are caused by 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.  Henderson understood it exactly backward, thinking inflation was caused by high prices. Henderson was a protégé of Presidential Assitant [[Harry Hopkins]].

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 began with controls on coffee and sugar, supposing that it could reach into every office, every warehouse, every shop and every home and watch and regulate every transaction. The same thing was done with meat. OPA was in the hands of men who knew little or nothing of the meat industry.  

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.

 

The corn farmer can sell his corn directly in the corn market or he can buy a cow and feed the corn to her. He decides what he will do by the price of corn. If he can get a better price for his corn selling it in the market he will not feed it to cattle. If the meat prices are more attractive he will turn his corn into meat. Planners allowed the price of corn to soar while holding down the ceiling on meat. The corn farmer sold his corn in the corn market. He refused to buy cattle. 

 

Wages were held down in slaughter houses. The workers quit the legitimate slaughterers and went to work for blackmarket slaughterers at twice the legal wages, or went into munitions plants, and scores of slaughter houses were put out of business. The unfortunate slaughterer or meat dealer or packer who complained was called a fascist.  

==Administrative Justice==

==Administrative Justice==

==Soviet infiltration==

==Soviet infiltration==

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

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

==References==

==References==

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[[Category:New Deal]]

[[Category:New Deal]]

[[Category:Espionage]]

[[Category:Espionage]]