Mr. RABAUT. It says it was published by the Labor Office of the Office of Price Administration, Washington, 25, D. C., and it has on it-INI, 8232 (2-46).

Mr. ROGERS. What happened is the back page was blank and the union got hold of some of these copies and put that message on the blank page.

Mr. RABAUT. The last page, on the inside of the last page, is for information on OPA problems.

Mr. ROGERS. Yes.

Mr. RABAUT. Advising to write to the chairman of the OPA Labor Advisory Committee, giving the OPA district office and the name of the State.

Mr. ROGERS. That is right; on the back page.

Mr. PORTER. That was superimposed by the union.

Mr. RABAUT. And down underneath the whole thing it says "United States Government Printing Office, 1944." To anybody who read that it would indicate it was put out by the Government Printing Office.

Mr. ROGERS. Yes.

Mr. PORTER. That was first called to my attention by Senator Capehart and he asked me to have an investigation made, and I likewise asked that an investigation be made covering the question as to whether any Federal statute was involved by taking material of that sort and overprinting it.

Mr. RABAUT. I doubt whether that could be sent through the mails, could it, Mr. Chairman?

Mr. CANNON. If it contained extraneous materials it is doubtful. Mr. DIRKSEN. And have you ascertained whether the modification of the Government print would be illegal?

Mr. PORTER. I have not received an answer to that question, Mr. Dirksen, but that falls in the line of the inquiry requested.

Mr. TABER. I think if the agency printed it it would be entirely out of line, in my opiion.

Mr. PORTER. We have disclaimed completely responsibility for the use to which it was put. It was a source of embarrassment and we immediately took the matter up. We took appropriate steps not only to see that it did not happen again but to find out who was responsible for it and to see if there was a violation of the law, and if so, to have it referred to the Department of Justice.

Mr. TABER. Were the people in the OPA, the Labor Committee, or whatever it is, responsible for this?

Mr. PORTER. No; they were not. I am advised that a supply of these booklets were made available by the district office at Louisville, as I recall, and the quantity of those that were overprinted, represents a relatively small quantity of the booklets. They were sent to Indianapolis for distribution at a labor meeting, and the whole quantity was obtained by a representative of the meat-cutters union.

Mr. TABER. This contains a very marked line of propaganda all the way through. I presume you are familiar with that. Under what appropriation did the getting up of this pamphlet and the printing of it come from?

Mr. ROGERS. I believe that was charged to the information budget as is indicated on the back of the printed pamphlet.

Mr. TABER. It says United States Printing Office down at the bottom of the whole thing, and on the back of the I notice the letters there now.

LETTER REGARDING CONSUMER PRICES

I have a letter here of more recent date that was sent out to the various newspapers by you, Mr. Porter, on the 15th of June.

Mr. PORTER. May I see the letter.

Mr. TABER. That is your letter; is it not?

Mr. PORTER. Yes.

Mr. TABER. And the getting up of that letter and the expense of printing it came out of what appropriation?

Mr. PORTER. It came out of the information's budget, I assume. I am sure it did.

Mr. ROGERS. I am quite sure of it.

Mr. PORTER. The letter was printed in the Washington Post on page 1 of the last Sunday's edition. The subject of the letter is to request editors to print the chart, which was printed by the Post. The development of the letter was done by my personnel after discussions with the editor of the Post who claimed that there had developed a dangerous psychology because of so many recent necessary adjustments in price and that a lot of people were saying inflation was already here, and we felt that as a part of our duty we had to combat that kind of psychology.

And there is a chart showing what happened, as you will see, after the last war, to consumer prices after the armistice; they went up and then the collapse, and this shows what happened under price control. I feel it is a very vital piece of information that the public is entitled to.

Mr. TABER. On the other hand it is a recital designed to promote the passage of the bill that is pending before the Congress, in a particular way?

Mr. PORTER. No.

Mr. TABER. That is a letter that was sent out, broadcasted to a lot of editors.

Mr. PORTER. That is to newspapers.

Mr. TABER. To newspapers.

Mr. PORTER. Yes.

Mr. TABER. All over the country, I assume?

Mr. PORTER. Yes; but it was not for the purpose of influencing legislation, but to give them information for what use they cared to make of it.

Mr. TABER. I would like to have that letter in the record. I do not particularly care about the chart.

Mr. RABAUT. Would the letter be understandable without the chart?

Mr. PORTER. I would like to have the chart included as well.
Mr. TABER. Both the chart and the letter?

Mr. PORTER. Yes.

Mr. TABER. Because the chart accompanied the letter?

Mr. PORTER. Yes.

(The letter and the chart referred to follow:)

To the EDITOR:

OFFICE OF PRICE ADMINISTRATION,
Washington 25, D. C., June 15, 1946.

DEAR SIR: There have recently been a disturbing number of comments that inflation is already here. Such comments suggest that the repeal of price control would not result in a significant increase in prices. This frame of mind, I believe,

is dangerous. It tends to drug the people of this country into either a false sense of security or a mood of defeatism.

There is a sharp difference between what has happened to prices under price control and what has happened or would happen to uncontrolled prices.

Here are the facts: From the beginning of the war in Europe in September 1939 to April 15, 1946, the average of all consumer prices and rents rose about 33 percent. A very large part of this increase, however, took place before effective price controls were established. From May 1942, when the General Maximum Price Regulation (GMPR) was issued, to April 15, 1946, the average of consumer prices and rents rose only about 13 percent.

From the issuance of the President's hold-the-line order, effective in May 1943, to April 15, 1946, retail prices and rents rose only 4.6 percent. From VJ-day to April 15, 1946, retail prices and rents rose only 1.2 percent.

In sharp contrast with this record, retail prices and rents more than doubled during the World War I period. Almost half of this increase occurred after the armistice. The Federal Reserve Board has estimated that inflationary pressures this time are 8 to 10 times as strong as those which sent prices through the roof in 1919 and 1920.

It is perfectly clear, therefore, that the GMPR and supporting regulations were effective in slowing down the rate of increase in retail prices and rents and that the hold-the-line order was spectacularly successful in holding prices almost stable right through to the end of the war.

It is true that since VJ-day price increases have been required to reflect wage adjustments or to facilitiate prompt reconversion to full peacetime production. These adjustments, however, are nearly complete. It is also true that grain and bread prices have been sharply raised chiefly to meet the requirements of the famine feeding program. Dairy prices have had to be raised as a result of feed and farm labor cost increases which threatened milk supplies. But when all these are taken into account it can safely be predicted that on July 1, 1946, prices will have risen less than 32 percent since VJ-day. When compared with what happened after the World War I armistice, when prices rose 10 percent in the first 10 months, the sharp contrast is obvious.

A considerable part of the increase which has occurred in retail prices since May 1943 resulted from the fact that while the prices of food and rents were successfully brought under control, clothing prices, because of the many obstacles to effective price control in this field, continued to rise and pull the average of prices upward. Despite these difficulties in clothing, however, the record of prices under control is in sharp contrast with the inflation which has occurred in the uncontrolled areas. Since VJ-day alone the price of raw cotton (not under control) has risen 23 percent. In the last year average stock-market prices have gone up about 33 percent. During the war real-estate prices have risen by an estimated 57 to 65 percent. Commercial rents, as many small businessmen know to their sorrow, have advanced spectacularly in many areas. These price increases are symptomatic of what would have occurred generally in the absence of price controls.

It is true that the official indexes do not fully measure the extent of blackmarket transactions, nor do they fully take into account deterioration in quality. It is true that the black market has increased since VJ-day. The extent of the black market, however, has been grossly exaggerated. The extravageant assertions made by enemies of price control-to the effect that 80 or 90 percent of retail meat sales are black-market sales are not only completely unfounded in fact but are an unwarranted indictment of the law-abiding character of the retail trade. It is perfectly clear that the meat situation has been aggravated recently by withholding livestock in anticipation of the sharp increase in prices which would result if meat price controls were removed.

No one can predict accurately what will happen to prices if controls are crippled or removed after July 1. It is perfectly clear, however, that the moderate rise which has occurred since VJ-day would be dwarfed to insignificance by the rise of prices which present inflationary pressures would support.

It will be a sad day indeed for the American people if the carefully calculated plans of the enemies of price control are successful as a result of the spirit of defeatism which has been promoted by those who are willing to risk our whole economic future to avoid the temporary restraints and irritations of effective price control.

Sincerely yours,

PAUL A. PORTER, Administrator.

RENT CONTROL POLICY

Mr. TABER. I was visited, recently while I was at home, on Saturday afternoon, by a woman who I thought, from her story, had a very decided and a very justifiable complaint about the way we had been played horse with by your rent control set-up. She had an ordinary house which had been made into two apartments prior to the war, and which was rented, when the rental control started, at $26 a month, just a bare apartment without heat or other services. She filed a rent statement. Her tenant died, and some other people came along and wanted to rent the place, but wanted things which the other tenant did not have; screens, a garage, and some decorations. She made a bargain with them at something like $45 a month. She did not realize that she was supposed to file any more papers for this new rent which was on a different basis for a different property than the first. The tenant evidently heard that it was subject to rent control and he wrote a letter of complaint and she answered it and told just what the facts were. Something like 8 months later an investigator came along, got all of the facts, and they started a proceeding against her, and they levied a fine on her of $200, and they cut the rent down that she had agreed upon with these people.

Now it seems to me that is going a good ways in the operation, and that tends to destroy the effectiveness of rent control.

Mr. PORTER. I would be glad, Mr. Taber, to check into the case and get a report from the area office. Certainly it is not the general policy to make it difficult for nonwillful violators, but I would like to have the opportunity to hear an explanation from the area officer that is responsible for the particular case.

Mr. CARSON. I have jotted down the information, if I might have the name of the party.

Mr. TABER. Yes; I will give you her name. I cannot give you the name of the tenant.

She had to hire a lawyer, and it will cost her more than she will ever get out of the rent of the place. It is a rather notorious case there, I found, and is not the way for decent people to operate.

Mr. CARSON. We would like to get the information in the case.

POLICY OF DECONTROL

Mr. TABFR. I notice you say you have some kind of a policy of decontrol.

Mr. PORTER. Yes.

Mr. TABER. My people are quite disturbed over your reaching into things that you have not had under control before.

Mr. PORTER. For example?

Mr. TABER. Snap beans, that were taken out from under control 2 years ago, and now you are putting control on them. The average in my territory-I do not know about the price throughout the country-but in my territory the average price is about $1.76 per bushel for the people in my territory, and you have gone in and put on a ceiling of $2.50 which freezes the price that they can get, beginning at the crop pick, and when it generally goes up at the end. Mr. BAKER. When does the harvest start in that area?

Mr. TABER. About the 1st of July, depending upon the situation in the area. It might be a little earlier in some parts.