CPR 63-Lubricating oils, greases, waxes, etc.

9.

Section 9: Adjustment of out-of-line ceiling prices. Received, 19; completed,

Section 20 (c): Adjustment of out-of-line ceiling prices. Received, 95; completed, 47.

CPR 64-Tire mileage

3.

Section 5: Adjustment of out-of-line ceiling prices. Received, 14; completed,

CPR 70-Vehicle rentals

Section 12: Adjustment to relieve financial hardship. Received, 51; completed, 28.

CPR 74-Pork, wholesale

Section 7: Adjustment to relieve area shortage. Received, 10; completed, 10. CPR 76-Glassine and greaseproof papers

Section 17 : Adjustment of out-of-line ceiling prices. Received, 1; completed, 1. CPR 84-Paperboard

Section 10: Adjustment to reflect increased costs resulting from a change in the method of manufacturing. Received, 1; completed, 1.

CPR 91-Writing paper

15.

Section 10: Adjustment of out-of-line ceiling prices. Received, 17; completed,

CPR 92-Lamb and mutton, wholesale

Section 5: Adjustment to relieve area shortage. Received, none; completed,

none.

CPR 93-Construction

Section 37: Adjustment to permit the substitution of a higher-priced service for a discontinued lower-priced service. Received, none; completed, none. CPR 97-Pacific Northwest logs

Section 25: Adjustment for special sizes and shapes of logs. Received, 95; completed, 71.

CPR 98-Iron and steel resellers

Section 40 (b): Adjustment for special services. Received, 96; completed, 84. CPR 101-Wholesale veal

Section 6: Adjustment to relieve area shortage. Received, none; completed

none.

CPR 103-Automobiles, Hawaii

Section 2.6: Adjustment for special delivery charges. Received, none; completed, none.

CPR 106-Coated and uncoated book paper

Section 14: Adjustment of out-of-line ceiling prices. Received, 5; completed, 3. GOR 10-Manufacturers

Adjustment for manufacturers to relieve financial hardship. Received, 319; completed, 218.

GOR 18-Robinson-Patman Act

Adjustment to remove violations of Robinson-Patman Act. Received, 6; completed, 4.

GOR 20-Small business concerns

Adjustment under section 402 (d) (4) of the act for small business concerns. Received, 281; completed, 35 (March 14, 1952).

GOR 21-Adjustments under section 402 (d) (4) of the act

Adjustment under section 402 (d) (4) of the act for other businesses. Received, 89; completed, 4 (March 14, 1952).

DR 1, Rev.-Fair distribution of livestock and meat

Section 12: Adjustment to permit exemption of club and show livestock, Section 19: Adjustment for special circumstances. Received, 601; completed, 576. (These figures pertain to DR 1 before revision.)

Total received, 18,927; total completed, 8,326.

(The following is submitted in connection with the discussion on p. 1247.)

FRESH FRUITS AND VEGETABLES

Witnesses have urged that fresh fruits and vegetables be exempted from price control for various reasons. The Office of Price Stabilization is well aware of the difficulties of setting ceiling prices on fresh fruits and vegetables and, therefore, has generally decontrolled these commodities when they are below parity. Indeed, the only fresh fruits and vegetables on which OPS has imposed a ceiling price are white flesh potatoes. Fresh fruits and vegetables cannot be decontrolled because they are a significant item in the total cost of living. Indeed, they constitute 5 percent of the cost-of-living index. To exempt them from price control no matter what happens would thus leave a major breach in price controls. To show the importance of fresh fruits and vegetables I should like to point out that potatoes alone have a greater weight in the cost-of-living index than all canned and frozen fruits and vegetables combined. I believe therefore that it is absolutely necessary that we continue to have authority to impose ceilings on the prices of fresh fruits and vegetables at parity particularly because of their price volatility. Rapid increases in the price of fresh fruits and vegetables are not unusual. I anticipate that OPS will use its authority sparingly in the future, as it has done in the past. However, if any situation should arise in the future which duplicates the potato situation, OPS will not hesitate to use its authority to control the prices of these items.

Potatoes show a clear case of where price control is essential. In September of this year potatoes were only 68 percent of parity and yet within 4 months they rose to 120 percent of parity. We fix ceiling prices on potatoes which were more than twice as high as those prices that prevailed only a year ago. We cannot have any effective price control if a major cost-of-living item like potatoes is permitted to go above these already high levels.

(The following is submitted in connection with the discussion on p. 1250:)

PROCESSED FRUITS AND VEGETABLES

Witnesses on behalf of the processed fruits and vegetables industries testified to the increases in production of these commodities and indicated that controls were no longer necessary. Notwithstanding the substantial increases in production, there have been few substantial reductions in price. Most processed fruits and vegetables are selling at peak prices. A study made by the Bureau of Labor Statistics as of December 15, 1951, showed that, at that time, 70 percent of processed fruits and vegetables were selling at peak prices. Indeed, the continuance of high-price levels indicates the existence of strong, inflationary pres

sures.

Thus, in May-June 1950 the price of canned apricots was $2.56; in January 1951 it had risen to $2.95; and as of February 1952 it had risen to $3.15. Similarly, canned fruit cocktail was $3.15 in June 1950; $3.60 in January 1951; and $3,72% in February 1952. Canned corn was $0.99 in February 1950; $1.40 in February 1951; and $1.54 in February 1952. Canned tomatoes rose from $1.37 in February 1950 to $1.80 in 1951 and February 1952. Cling peach halves were $2.28 in June 1950; $2.92 in January 1951; and declined slightly to $2.82% in February 1952; yet this price was slightly more than 50 cents more than the price in June 1950. Moreover, canned Bartlett pears were $2.95 in June 1950; $3.90 in January 1951; and declined slightly to $3.84, a price 89 cents over preKorean prices in February 1952.

Thus, despite increased production, there is firmness in the processed fruit and vegetable market, and a short crop or increased demand could easily wipe out stocks on hand.

wholesale

mark-up

Estimated annual dollar amount of mark-up that consumers will pay as a result of OPS regulations which allow a mark-up on increased excise taxes

on cost

Estimated Tax increase Estimated

and wholesale mark-ups 3

tax 4

Source: Office of the Technical Staff, U. S. Treasury Department. No data available on estimated increase in excise tax for sporting goods (such as badminton, tennis, billiards, golf, etc.).

(The following is in response to the inquiry on p. 1240.)

MEMORANDUM

SECTION 402 (G) OF THE DEFENSE PRODUCTION ACT OF 1950, AS AMENDED, DOES NOT APPLY TO PRICING PRACTICES

The prohibition in section 402 (g) of the Defense Production Act of 1950, as amended, against compelling changes in "business practices, cost practices or methods, or means or aids to distribution, established in any industry" does not apply to compelling changes in pricing practices. Under a nearly identical provision of the Emergency Price Control Act of 1942, the Emergency Court of Appeals held consistently that "business practices" did not include "pricing practices" (sec. 2 (h), 50 U. S. C. App. Sec. 902 (h)).

In Philadelphia Coke Co. v. Bowles, (139 F. 2d 349, 357–8 (Em. Ct. App. 1943)), the court said:

"The complaints contend that the general maximum price regulation as applied to their business violates Section 2 (h) of the act in that it destroys their fundamental and established business practice of selling coke oven gas at a base price continuously adjusted to changes in the cost of coal. It may be conceded that in a broad sense this is a business practice but we are clear that it is not a business practice within the meaning of section 2 (h) of the act. On the contrary it is what may fairly be described as a pricing practice and is, therefore, unquestionably within the regulatory power of the Administrator. It would wholly destroy the effectiveness of the act if section 2 (h) were to be construed as placing it beyond the power of the Administrator to deal with established business practices which directly affect the fixing of the prices of commodities. It is obvious that any control of prices will directly interfere with those business practices which relate to the fixing of prices. It was only to make sure that the Administrator would not go beyond his price regulating function and engage in an effort to reform business practices which were not directly related to prices that Section 2 (h) was inserted in the act. See United States Gypsum Co. v. Brown, Em. App. 1943, 137 F. 2d 803." [Italics inserted.]

In Seaboard Oil Co. v. Bowles, (149 F. 2d 661, 663 (Em Ct. App. 1945)), the court followed Philadelphia Coke Co. v. Bowles, supra, stating: "The complainants assert that (the pricing provisions) ** are invalid for a number of reasons. They contend * * ** that the amendment destroyed the fundamental and established business practice in their industry of selling dry gas at a price continuously adjusted to the price of fuel oil All of the foregoing contentions were advanced in Philadephia Coke Co. v. Bowles, (Em. App. 1943, 139 F. 2d 349), a case in this court in which the facts

were strikingly similar to those of the present cases. In our opinion in the Philadelphia Coke case these contentions were considered at length and decided against the position taken by the complainants. Since we adhere to the views expressed in that case no useful purpose would be served by elaborating them here. It is sufficient to say that upon the authority of Philadelphia Coke Co. v. Bowles, supra, these contentions of the complainants must be held to be without merit.

In California Lima Bean Growers Ass'n v. Bowles, (150 F. 2d 964 (Em. Ct. App. 1945)), the Court said:

"It is clear that the narrowing of the differentials between the maximum prices for dry standard limas and other varieties of dry edible beans which thus resulted is not a violation of section 2 (h). In the first place it may well be questioned whether the maintenance of a price differential can ever be anything more than a mere pricing practice and as such not within the purview of section 2 (h). Compare Philadelphia Coke Co. v. Bowles, (Em. App., 1943, 139 F. 2d 349.) But aside from this the record shows that there has been no constant relationship between the prices of dry standard limas and other varieties of dry edible beans. Accordingly the complainant has failed to show an established practice within the protection of section 2 (h). Compare Wells Lamont Corporation v. Bowles, (Em. App., 1945, 149 F. 2d 364.)" [Italics inserted.] In Modern Mfg. Co. v. Fleming (160 F. 2d 892, 896 (Em. Ct. App., 1947, Cert. den. 331 U. S. 850 (1947)), the court said: "Finally, the argument is made that the regulation interfered with an estab lished business practice of the industry contrary to section 2 (h) of the act, in that it was customary in the industry to price certain garments higher and other garments lower than a previously determined average markup over costs, whereas the regulation allowed only an average markup for all articles in a given price line. In answer to this argument we refer to Philadelphia Coke Co. v. Bowles (Em. App. 1943, 139 F. 2d 349, 357)

*

(The charts attached to the statement of Roger L. Putnam, ESA Administrator, follow (see p. 109, pt. 1):)