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revision 1, amendment 1, and CPR 37, amendment 5, which Mr Arnall announced today.
A group of representative constructions of cotton fabrics has been selected by OPS to form a composite index for use in determining when to terminate suspension on cotton textiles. If the index reaches 90 percent of 1951 peak prices, the suspension will be terminated and price controls reinstated for all cotton textile products. This index represents the average movement of all of the constructions. Based on current prices, the average of the prices of all of the constructions will have to rise 17.5 percent to reach the recontrol point.
The Price Administrator observed that not all cotton products have declined in price equally far below ceiling.
"In general,” he said, "the products that are further below ceilings are those usually more volatile in price, while those that are closer to ceiling prices normally are not subject to equally wide and rapid fluctuations. It is therefore believed that suspension of ceiling prices is presently appropriate for all cotton products and that, should suspension have to be terminated, it would probably be necessary to terminate it for all cotton products.
"Nevertheless, price movements will be closely watched and whenever any significant category of yarns or fabrics threatens to pierce ceilings, suspensions as to the particular group of products will be terminated."
OFFICE OF PRICE STABILIZATION,
Washington, Monday, May 19, 1952.
For immediate release.
FATS AND OILS
(CPR 6, Amdt. 14—Crude Soybean Oil, Crude Cottonseed Oil, Crude Corn Oil
and Lard-Rescission of Roll-back of Ceiling Prices) The roll-backs of price ceilings on crude soybean oil, crude cottonseed oil, crude corn oil and lard, which were suspended on April 28, have been rescinded by OPS. The ceilings in effect before the suspension are restored and become the suspended ceilings. The action is effective today.
Price Stabilizer Ellis Arnall said the move is in line with his policy that suspensions of price ceilings are not to be coupled with adjustment of the suspended ceilings, either upward or downward.
The suspended ceilings on the three vegetable oils and lard, effective April 28, were lower than the ceilings previously in effect. These lower ceilings are now being rescinded by amendment 14 to Ceiling Price Regulation 6, fats and oils, which reestablished the ceilings at this former level.
Both the restored ceilings and the rescinded ceilings are considerably higher than current market prices.
"The suspension of these ceiling prices was part of a program initiated by the Director of Price Stabilization at the beginning of this year to suspend or relax price control in areas where market prices are materially below ceilings and there is no prospect that these market prices will reach ceiling prices within the foreseeable future," OPS said.
"On the basis of the experience gained in the execution of this program up to the present time, the Director of Price Stabilization has now determined that suspension of price ceilings should not be coupled with adjustment of those ceilings, either upward or downward.
"In the light of this policy, and taking into account the circumstances affecting these three oils and lard, it has been decided to issue the present amendment, which restores the ceiling prices of these commodities to their levels prior to the issuance of amendment 13.”.
The restored ceilings are for soybean oil, 20%2 cents per pound, f. o. b. Decatur, Ill.; cottonseed oil, 2322 cents a pound (valley basis); and corn oil, 2472 cents a pound, f. o. b. United States mills.
The rescinded oil ceilings were 1642 cents a pound for soybean oil, f. o. b. Decatur; 18 cents a pound for cottonseed oil (valley basis), and 19 cents a pound for corn oil, f. o. b. United States mills.
Since the previous ceilings for lard had been established under the general ceiling price regulation and were not uniform, the new ceiling is set at 18 cents a pound for loose lard at Chicago (with appropriate differentials). This is 1 cent
higher than the rescinded ceiling. OPS said the new amount is representative of ceiling prices formerly established for lard processors under GCPR.
Mr. Arnall announced his intention to reimpose ceiling prices on the three oils and lard, if and when their market prices rise to within 24 cents of the suspended ceiling prices.
This recontrol "trigger" corresponds to that which was provided in amendment 13 for the rescinded ceilings.
OFFICE OF PRICE STABILIZATION,
Washington, April 30, 1952. For use on receipt.
THE FACTS ABOUT POTATOES Why we have ceilings
Last January, white potato prices were threatening to go out of sight.
That was bad news for the average American, for everyone knows the prominent place potatoes occupy on the family dinner table.
White flesh potatoes (that's what the trade calls them) are, in fact, the most important single vegetable in the Nation's diet. Consumers spend more for them than for any other fresh or processed vegetable. Housewives spend more for potatoes than for all canned and frozen fruits and vegetables put together.
Until early fall, 1951, potato prices received by growers were below 100 percent of parity, a price calculated to give farmers a fair return for their products in relation to the cost of things they buy. As long as that condition existed, there was no need for ceilings.
But the supply of potatoes was growing short. Dealers foresaw a shortage, and keen competition for available supplies developed. Prices were pushed up. Between October 15, 1951, and January 15, 1952, white potato prices rose sharpls. In that short time, grower prices jumped from $1.39 to $2.07 a bushel.
The prices consumers had to pay for this necessary food increased accordingly.
There was every indication that unless something was done, potato prices would continue to rise sharply.
With the rise in prices to well above 100 percent of parity OPS had the legal authority to act. OPS therefore placed dollars-and-cents ceiling prices on potatoes.
These ceilings had a threefold effect: First, they protected consumers against further skyrocketing of prices; second, they allowed reasonable and equitable margins for distributors of potatoes; third, the ceilings were set high enough to allow growers at least 100 percent of the minimum required by law. The potało shortage
There is little doubt that potato supplies will be extremely short throughout the Nation in May. This situation could extend well into June before new production comes to market in ample amount.
Some people have jumped to the conclusion that OPS ceilings caused the shortage. That is a wrong conclusion. The shortage existed before OPS ceilings were imposed.
It was the threatened shortage which caused the price rise, and that in turn made ceilings necessary.
The supply of potatoes now on hand was determined during the 1951 planting season. When price supports ended with the 1950 crop, growers cut 1951 acreage to reduce production below record crops harvested under the support program. Bad weather, too, played a part in some areas in reducing both the size and quality of the crop.
A crop of only 325,000,000 bushels developed, compared with a 1940-49 10year average of 410,203,000 bushels.
In general the United States produces three great crops of potatoes annually. These are designated as the early crop, from Southern States; the intermediate crop from middle States, and the late crop from the northern tier of States.
Normally, these three crops overlap to assure the Nation an ample year-round supply of potatoes.
The early and intermediate crops are consumed as they come on the market during the spring and summer. Most of the late crop which is the largest of the three, goes into storage after harvest for use during the winter months and to carry us over until the new crop starts to market in the following spring.
A total crop of 325,000,000 bushels, as developed in 1951, apparently is not enough to go around during a year and carry us to the next spring. Storage
stocks of potatoes were reduced 50,000,000 bushels from January 1 to March 1, 1952, or at a rate of 25,000,000 bushels a month. This reduced storage stocks to 46,260,000 bushels on March 1, or less than a 2-month supply on the basis of consumption during January and February.
With new crop potatoes just starting to market, the shortage is evident. No appreciable volume in new potatoes is expected to develop until mid-May. Present supplies of "old" or storage potatoes will be used up by that time.
The present shortage of white potatoes would have developed regardless of price controls.
It is evident that, in view of the current short supply, potato prices would be considerably higher if OPS had not imposed ceilings.
Higher prices now would not make more potatoes available during the next few months. Higher prices would, however, place an additional burden on the consumer.
Higher potato prices in turn would have meant a rise in the cost-of-living index, which could help to set off an inflationary spiral, to the detriment of the grower, handler, and consumer of potatoes. Future outlook
OPS ceilings are at levels sufficiently liberal to encourage growers to increase acreage this year.
There is every encouragement for growers to increase production to prevent a repetition of the current supply situation.
Meanwhile--at least until there is again an ample supply-OPS intends to keep potatoes firmly under ceilings. Consumer protection
In times of shortage, there are always some unscrupulous people ready to take advantage of such a situation and the public..
The current potato shortage is no different. There have been some reports of shady deals.
OPS enforcement officers are constantly on the alert to protect legitimate handlers and consumers of potatoes against the activities of persons who would take advantage of the current shortage.
Investigations in numerous sections of the country have revealed that the short supply is the cause of the present situation.
Thus far injunctive and treble-damage actions have been sought against a dozen potato growers and wholesalers for alleged price ceiling violations and tie-in sales, in California, Texas, and Michigan. Investigations are continuing.
MEMORANDUM FOR HOUSE COMMITTEE ON BANKING AND CURRENCY, May 27,
SPECIAL CONSIDERATION GIVEN BY OPS TO SMALL BUSINESS
Standards and policies affecting small business, drafted by a committee comprised of representatives of each of the major OPS operating divisions, were approved by the Director on August 1, 1951, and are as follows: 1. Statement of policy
The Office of Price Stabilization is keenly aware of the many problems confronting the operators of small-business enterprises and has adopted the following basic policy to aid in the achievement of the objectives of economic stabilization, and to provide adequate safeguards for the interests of small business.
The special problems of small business will continue to be reflected to the fullest possible extent in the basic pricing policies and techniques embodied in the regulations. If smallness has traditionally justified higher prices, as in the case of retail food stores, this will be recognized in the regulations. If simpler pricing methods can be devised for small businesses with limited clerical facilities, this will be done. But in many cases, perhaps most, a double pricing system for large and small business can neither be devised nor justified. When this is true, special concern for small business must take the form of writing regulations in the simplest language, with an adequate comprehension of small-business problems, of helping the small-business man understand and comply with them, and of reducing to a bare minimum the clerical burdens imposed. Appropriate care shall be taken in writing all regulations that, insofar as possible, reports required will be kept to a minimum, and records required shall not be more onerous than the
records usually kept in an establishment the size and nature of the business affected.
All industry advisory committees appointed shall continue to have fair representation of independent small business. To assure availability of full information and prompt handling for small business of matters under the cognizance of the Office of Price Stabilization, a senior official of each OPS regional and district office will be assigned specific responsibility for handling the problems of small business.
To assure continuous consideration of problems relating to small business, there is established in the Director's Office the position of Assistant for Small Business and an intra-agency Small Business Affairs Advisory Committee composed of senior officials of each major organizational segment of the agency, 2. Standards for drafting price regulations
(a) Special problems of small business will continue to be reflected to the fullest possible extent in the basic pricing policies and techniques embodied in the regulations.
(b) If smallness has traditionally justified higher prices, as in the case of retail food stores, this is to be recognized in price regulations.
(c) Whenever practicable, simpler pricing methods will be devised for small businesses with limited clerical facilities.
(d) Special concern for small business will be taken in the form of writing regulations in the simplest language so that the small-business man may understand and comply with them.
(e) Appropriate care shall be taken in writing all regulations that insofar as possible reports required will be kept to a minimum, and records required shall not be more onerous than the records usually kept in an establishment the size and nature of the business affected.
(1) Insofar as is practicable, selected geographical areas will be used for a nonpublicized test of proposed regulations which will particularly affect that area with particular concern for small-business operations.
Small-business affairs representatives were appointed by the respective regional and district directors in each of the regional and district offices.
The field staff now consists of 103 regional and district representatives. Under a policy enunciated by the director, the function of representative is maintained by a senior official in each office. This staff has proven adequate and effective. No need has arisen for full-time employees.
Small-business representatives have made themselves available to local chambers of commerce, trade associations, and all other groups interested in the affairs of small business. They have conducted innumerable small-business clinics, spoken to interested groups and appeared on radio and television programs. Numerous indications have marked the value of this endeavor.
PUBLICATIONS A Guide for Small Business Representatives, and a set of simplified instructions, were sent to all small-business field representatives. This guide contained the following information:
1. The names and addresses of all small-business representatives. 2. A statement of OPS small-business policy.
3. Instructions as to how to direct an inquiry, and how to obtain information normally required for adjustment procedures under regulations.
4. A statement of the responsibility of the small-business man in aiding in the fight against inflation.
Every instruction on small business which has emanated from OPS has reiterated that OPS district offices are the points of contact for small-business problems, and that only when these normal channels are exhausted may a case be referred to a small-business representative in the regional or national office.
Small business pamphlet.-A pamphlet for distribution to the general public and to small business has been prepared and is now being printed. It is expected that this pamphlet will be released during the week of June 2, 1952, to all interested organizations and field offices in sufficient quantities to care for their local needs. Directions to the small-business representative in each district office are found in this pamphlet.
Special news releases.—The Information Division is at present preparing & series of special articles on small-business activities of OPS for release at national
and local level. These articles will accentuate the attention small business has received and is receiving throughout the Office of Price Stabilization and how small business can aid in the fight against inflation.
REPORTS Quarterly reports are received regularly from the regional and district small business representatives and are used:
1. As a guide to the commodity divisions of the national office. All reports are briefed and sent to each branch with a request for action.
2. As a source of suggested recommendations for the revising and simplifying of regulations and expediting of changes in them.
3. For a study by the committee and as a basis for recommendations for action to the Director.
Reports are filed by the small-business representative of the district office on special cases that need national office action from time to time. Results are obtained and teletyped back to the respective office.
Small-business representatives of field offices are requested from time to time to make reports on special cases in their districts that can best be handled in the field by the national office.
SMALL BUSINESS ACTIONS CONTEMPLATED 1. A new regulation is under study by the Office of Price Operations in an effort to bring small rural general stores, now subject to multiple regulations, under one simplified regulation.
2. The Intra-Agency Small Business Committee is reviewing existing small business standards and policies issued on August 1, 1951.
3. A review of all existing regulations to be carried out by various field offices is under consideration by the Intra-Agency Small Business Committee.
4. Suspension of controls action will be taken after due consideration has been given to the particular needs and requirements of small business.
NOTEWORTHY SMALL-BUSINESS ACTIONS COMPLETED BY THE AGENCY 1. Ceiling Price Regulation 7 allows a retailer with a volume of less than $60,000 to elect to price under a specific regulation or the General Ceiling Price Regulation.
2. Small-business exemptions in CPR 22 and CPR 30 allow the small manufacturer doing an annual business of less than $250,000 to price under CPR 22 and CPR 30 or to stay under the General Ceiling Price Regulation if they so elect.
3. SR 18 to CPR 22, issued November 26, 1951, provides a simplified method for making adjustments under the so-called Capehart amendment for manufacturers with net annual sales of less than $1,000,000 who wish to use the CPR 22 formula. This can be handled at field office level.
4. General Overriding Regulation 20 which was issued on November 28, 1951, allows small manufacturers, doing an annual business of less than $250,000, to take advantage of the Capehart amendment by means of a simple over-all method. This can now be handled at field-office level.
5. The nickel anode regulation was issued on April 21, 1952. The Senate Small Business Committee was particularly interested in this regulation and carried out a campaign for several weeks in its weekly bulletin calling for its issuance.
6. The steel resellers regulation, CPR 98, issued November 29, 1951, was consistently followed by the Assistant to the Director for Small Business through each step of its preparation. This helped to break the gray market in steel.
OFFICE OF PRICE STABILIZATION,
Washington 25, D. C., May 27, 1952.
MEMORANDUM FOR HOUSE COMMITTEE ON BANKING AND CURRENCY OF COMMENTS
ON TESTIMONY BY MR. COSTLEY OF THE NATIONAL AUTOMOBILE DEALERS ASSOCIATION
The National Automobile Dealers Association has levelled a series of charges at the OPS regulations which deserve point by point answers. These charges were made without the submission of supporting evidence, were contradictory, and were in conflict with the facts. In general, the charges represent a protest