Teaching Cleveland

Lesson 49

FACT SHEET

By January of 1942, the United States is involved in a world war and all segments of the homefront are focused on the objective of winning that war. In response, U.S. industry also "gears up" for war, with production converting to war needs. Consumer durables, such as cars, washing machines, and non-defense housing, in fact, ceased to be made at all. With consumer production nearly non-existent, price inflation could be a real threat. It was clear that only strict restraints would keep prices from soaring out of sight. Therefore, the Roosevelt administration set out to hold prices down, and in January of 1942, Congress authorized the Office of Price Administration. The OPA was authorized to set price ceilings. Some increases were deemed necessary as incentive to production, however, the General Maximum Price Regulation of April 1942 froze prices at the highest level they had reached the month before. With prices frozen, goods had to be allocated through rationing, which had begun with auto tires in December of 1941, and gradually extended to other goods in short supply. Soon goods such as sugar, coffee, gasoline and meats were rationed. Due to the impact of World War II and the government commitment to the war, the United States was no longer in a free market system. All resources and efforts were directed to the war effort. The government now regulated production and prices.

As the war ended in 1945, American government and industry needed to return to peacetime activities. The years following WWII saw a continued shortage of consumer products due to shortages in resources and time needed to "re-tool" factories for consumer goods production. Resources for the production of nylon stockings and automobile tires were still scarce in 1946. As industry returned to production of consumer goods, the U.S. government began to fear rampant inflation and decided to continue price controls. Therefore, in 1946, the OPA was kept in place and still regulated prices for some consumer goods. Price controls on items such as meat caused farmers to either stop producing or to withhold meats because the profit was not possible, therefore, creating a meat shortage.

Throughout World War II, Clevelanders supported the war effort on the homefront and endured rationing and shortages of consumer goods. As the war ended in 1945, many Clevelanders were looking forward to peace, the return of American soldiers and the end of shortages and rationing. However, by 1946, rationing and shortages were still in effect for many consumer goods and Clevelanders were still facing long lines and scarcity of many products. By late winter and early spring of 1946 U.S. businesses mounted a massive campaign against price controls and the end of the OPA. The OPA was to expire in June of 1946, but Congress extended controls in late July and in August. OPA restored controls on meat prices. Farmers responded by withholding beef from the market until a reversal came in October. After the elections of 1946, all controls ended except on rents, sugar and rice.


back to lesson

website design credits