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By the year 1550 an Englishman named John Mason commented. on price controls as follows:

I have seen so many experiences of such ordinances; and ever the end is dearth, and lack of the things that we seek to make cheap. Nature will have her course, and never shall you drive her to consent that a pennyworth shall be sold for a farthing. For who will keep a cow that may not sell the milk for so much as the merchant and he can agree upon?

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During the French Revolution, paper money was issued with reckless abandon. With prices rising rapidly, the Government imposed price control. The first result of the maximum-price-control law was that every means was taken to evade the fixed price imposed, and the farmers brought in as little produce as they possibly could. This increased the scarcity, and the people of the large cities were put on an allowance. Tickets were issued authorizing the bearer to obtain at the official prices a certain amount of bread or sugar or soap and wood or coal to cover immediate necessities. Shopkeepers could not sell such goods without ruin. The result was that very many went out of business, and the remainder forced buyers to pay enormous charges under the very natural excuse that the seller risked his lfe in trading at all. This excuse was valid because the daily lists of those condemned to the guillotine frequently contained the names of men charged with violating the maximum-price laws. Despite the adoption of rationing, the price-control law could not be enforced and after a period of a little more than a year was repealed.

In our own country neither the Democrats nor the Republicans were responsible for abolishing price controls in 1946. Price controls broke down, and late in the year President Truman merely officiated the final rites.

You may recall that on October 14, 1946, President Truman in a prepared statement said:

Some have even suggested that the Government go out onto the farms and ranges and seize the cattle for slaughter. This would, indeed, be a drastic remedy. But we gave it long and serious consideration. We decided against the use of this extreme wartime emergency power of government. It would be wholly impractical because the cattle are spread throughout all parts of the country.

In other words, here was a President of the United States, in a democratic country, planning to take the cattle away from the farmers and deciding against it only because it was impractical.

President Truman likewise said on October 14, 1946:

Another remedy suggested by many people was to have the Government seize the packing houses. This offered no real solution, however, because the seizing of empty packing plants would avail us nothing without the livestock.

This was a dramatic way of expressing the situation. Price controls broke down, and they will break down again if inflationary pressures develop.

OPS has been trying to take curtain calls for the recent stability and declines in prices. Since a majority of prices are below ceilings, OPS has been revising the ceilings downward to current market-price levels. OPS, in taking credit for prices falling below ceilings, does not explain exactly just how they were responsible for this.

But just why the taxpayer should finance public officials to fix prices at just above current market levels is another one of those Washington mysteries which are hard to explain.

It was high production, not price controls, that stopped the wave of buying following Korea. The people finally became convinced that goods would continue to be available in adequate supply.

Wholesale prices have risen by 46 percent in France and 27 percent in Great Britain, since Korea, while they advanced by only 12.5 percent in the United States, despite the relatively far greater outlay on defense production in this country. We think that speaks pretty well for the productivity of this Nation.

France and Britain certainly have their fill of government controls. The relative stability of the price level here must be attributed, therefore, to the remarkable production record of American industry.

During World War II the Government took about 40 percent of the total production output of the United States. In 1951 it took 21 percent of our production, just slightly over one-half as much as during the late war. But production has reached a level whereby the amount of goods left for consumers is exceeding demand and prices are falling.

High production is the real answer to the problem of inflation, but if we are to achieve full production the unrealistic, arbitrary, confusing and unsound price controls must be removed. Controls are the greatest handicap to production. They cause a lack of confidence in future markets, because if production costs rise the producer or manufacturer finds himself inevitably in a price squeeze.

In our own industry the administration's price-control program is noteworthy for its impracticability. It leads to blackmarketing, disruption of meat production, maldistribution of products, and diversion of millions of man-hours of time for studying confusing regulations and making reports. It adds to the burden of the taxpayer, breeds contempt for law and Government, creates health hazards when livestock are illegally slaughtered by black marketeers, and results in loss of byproducts and life-saving medicines.

With the present control system in effect we feel doubtful that production of meat can be stepped up to meet our full requirements. It is well known to the industry how millions of pounds of beef were lost last year by the reduction in feeding due to Government control and roll-back policies. Now we learn that this spring's pig crop was cut by 5 million pigs due to Government controls at a time when greater production is needed.

Nevertheless compared with prewar the meat-price situation is not as critical as it has been made to appear. Cattle numbers are at a record high and per capita consumption of meat is considerably above prewar. Consumption during the 5 years before the war, 1935 through 1939, averaged 126 pounds per person. According to the Department of Agriculture consumption was at the rate of 141 pounds in 1950 and is expected to increase in 1952.

When Paul Porter was administrator of OPA he said that the purpose of price controls was to keep the law of demand and supply from operating. If controls reduce or hold down meat prices in the face of rising income, consumers demand more meat than before and a scarcity

occurs.

On the other hand price ceilings on livestock means that farmers and feeders receive less compensation for their work if their costs increase and the incentive to produce more animals and more meat is reduced. Fear of arbitrary action on the part of the Government always throws a damper in farmers' plans for growing and feeding livestock. The

controls therefore encourage consumption on the one hand and discourage production on the other.

One thing that is obvious to the meat packer, and to the consumer also, is that price controls cannot succeed in getting good distribution of meat and meat products to retail stores. In the absence of controls, however, that job is splendidly and automatically handled by industry.

One of the great accomplishments of the meat industry is its ability to put fresh meat in all the butcher shops in the Nation and keep those shops constantly supplied. When contrals are not in effect you can walk into any butcher shop and mke your purchases from a variety of freshly received cuts. If the industry is allowed to operate after June 30 unhampered by controls there will be meat available in all the stores with grades and cuts for every pocketbook.

The industry's experience with price controls impels our members to declare in the interest of the American people that controls must be discarded now as unnecessary and unworkable. If they are not discarded and if inflationary forces develop there will be black markets, disregard for law, unsanitary practices, waste of meat and valuable byproducts, and maldistribution of meat to consumers.

Severe meat shortages occurred during World War II. While the shortage was general some areas were destitute for the reasons that necessary additional costs, such as transportation, tended to prevent the flow from areas of production to deficit areas. Fixed prices do not allow for these variable costs. Conditions are ever changing. Some areas are in an export position at one season and import at another. Some areas import feeder cattle and export fat. Other areas import fat cattle and export feeders. Again, in the field of distribution as in the field of price the free play of economic forces make the necessary adjustments far more equitable for all concerned than could ever be done by edict.

As long as price controls are in effect the administration will have to ask for additional power to bolster up its failing program. Scores of complicated amendments, rules, orders, decrees, interpretations, and declarations will pour out from OPS. Greater enforcement power will be needed and finally an army of policemen and other OPS personnel exceeding the 60,000 employees of OPA may be demanded.

During OPA, a slaughterer of beef had to be familiar with over a hundred regulations.

A former economic stabilizer stated that the price and wage controls as administered now are a "futile, expensive, and even tragic venture." He said that the general freeze of prices was never intended to be more than a stop-gap measure and a sop to public pressure. He said further, that "production is essential to the defeat of inflation and the short-term value of price control may already be more than offset by its impairment of production and production incentive."

Some people feel a certain sense of security in price controls. They erroneously believe that price controls can stop inflation. This false sense of security in price controls may prevent the taking of positive steps to correct the real causes of inflation.

Price controls are like a narcotic that may give you a little lift but after it is over you will be worse than before.

Regardless of man-made controls the forces of demand and supply will continue in effect and all inequities will be corrected by the black market. We believe that we can out-produce our enemies, but we doubt the wisdom of trying to out-control them.

In a free economy during a time of increasing demand and rising prices marginal producers with higher than average costs of production are automatically encouraged to produce. When the production has increased until it equals demand, competitive forces automatically check this marginal producer and balance is maintained. It is an utter impossibility for an administrator to anticipate all of the factors which are in our complex system and substitute arbitrary orders which will function.

Because livestock prices cannot be fixed at all until slaughter results are known the very nature of controls is such that the blackmarket buyer is not recognizable by the price he pays for livestock.

Probably by far the greatest amount of violation occurs in the twilight zone or gray market. Complete enforcement of complicated price controls is an impossibility.

Meat is perishable and impossible to define accurately in terms of grade, fat, tenderness, trim, content of bone, and so forth. These are just as important as the price in determining what the consumer gets for his money. Constant supervision at every point of sale is necessary to insure compliance.

We should not place the livestock man, the slaughterer, or the meat dealer in the position of going "gray" or going out of business.

The livestock and meat industry in order to help meet the national emergency by making as much meat available as possible began 2 years ago to develop an effective program to increase livestock and meat production. Nineteen agricultural groups including the leading farm and livestock organizations with the assistance of the Doane Agricultural Service of St. Louis launched a comprehensive program which embrances every possible means of getting more meat.

The industry's production program if unhampered by controls, may very well increase consumption of meat in the next few years to 160 to 170 pounds per person.

This plan entitled "A Common Sense Meat Program" calls upon farmers to increase production of feed grains and livestock producers to boost animal numbers. It covers such goals as grassland improvement and better use of pastures, efficiency in feeding, reduction of death losses, and a host of other ways to increase output.

The industry's program also calls on Congress and the administration to attack the causes of inflation through adoption of sound monetary and fiscal policies.

You cannot have cheap meat and cheap dollars. We are convinced that the solution to the inflation problem is to restore the value to the dollar and not to concern ourselves with techniques such as price controls which are not even designed to deal with the problem.

We should make sure that we handle the national debt in a way not to increase the money supply. And we must cut Federal expenditures. We are going to support the Congress in cutting Federal expenditures.

This positive program calls for making sure we get on a pay-as-yougo tax basis and stay there, and that we encourage savings and increase production.

The program we support has no place for price or wage controls. It is designed to get at the causes of inflation. It is an affirmative and workable program. Price controls deal with the symptoms, they do not deal with the causes. They do nothing to increase production. They are only able to decrease production.

Our industry believes firmly in the American way of life which respects individual initiative and stimulates production and thrift. The other system, prominent in the world today, relies on the state and makes the government master of the people. We have faith, as you do, in the American way and believe that the interests of our Nation will be served by guarding against encroachments on human liberty which inevitably come with planned economy, and excessive Government controls.

We have in the Western States Meat Packers Association 415 companies, and they are all against price controls.

I think we have one of the finest progressive groups of businessmen that you could find anywhere in the United States. They are patriotic, and they are against price controls for several reasons.

Not because they want to injure the Government or the country, because that is precisely what they do not want to do. But they have a business which is not readily controlled. There are many problems that come up in the operation of a packing business which price controls cannot solve.

Our people feel that price controls are unworkable, that they are inequitable, and that they cannot succeed in an industry as complex as the meat-packing industry.

Under a free-market system, prices in the meat industry are constantly changing. They are changing every minute, and it is that free change of price resulting from the law of demand and supply, which gets perfect distribution of meat in every individual market in the United States.

When you do not have price controls, you can find meat wherever you go, and you will find it at a price that you can afford to pay, because under free enterprise, it is the consumer that sets the price, and he sets that price in relation to his pay envelope and in competition with all other foods which he can buy.

Free enterprise is a great and remarkable system. It has made this country the great productive country that it is a land of freedomand these controls are taking away that freedom and they are substituting a different system, which is more costly, which requires thousands of man-hours of time to write and administer, the regulations. It takes thousands of Government employees and, on top of that, it takes hundreds of thousands of man-hours in industry to study the regulations, to make reports on them, to be sure that everything is complied with.

Then on top of all that, after a legitimate packer has conformed with all of those compliance features, he finds that there are certain people in our industry, as there are in all industries today, who will take advantage of price controls and will use them for their gain. Our industry is so complex that OPS cannot possibly enforce all these regulations. There are just too many ways in which you can get around them.

So the legitimate packer and the legitimate businessman today is penalized by his compliance with the Government regulations.

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