crease in the last war, which went on up beyond in the period after the war. Even including rises which took place before controls were established and in spite of far greater inflationary pressures, price increases during the present war have been held to less than half those of World War No. 1. There was no price control until right here [indicating], so a lot of the increase was before the act was passed.

HOUSE FURNISHINGS PRICES BOTH WARS.-The next chart presented the movement of house furnishings prices in both world wars. See chart 70, appendix, page 1553.

What happened to the prices of house furnishings in the two

wars

Senator DANAHER. Mr. Bowles, please, before you start on a new head: Do you know what the figure was on the total percentage of our production in World War I

Mr. BOWLES. I will get it.

Senator DANAHER. Which went to the Government as compared to what goes to the Government today?

Mr. BOWLES. That will follow in another chart.
Senator DANAHER. Good. Thank you.

Mr. BOWLES. House furnishings up 95 percent in the last war; they have been up 27 percent in this. House furnishing contribute 4 percent to total living costs. When I talk about living costs, I am talking about the Bureau of Labor reports, which take low income and moderate income families. They will be out if you take a high-income family.

CLOTHING PRICES BOTH WARS.-This chart presented similar data for clothing. See chart 71, appendix, page 1554.

What happened to clothing prices: World War No. 1, up 107 percent; World War No. 2, up 34 percent. Cotton and wool prices have an important effect upon clothing prices, and they are not subject to controls until prices reach parity. Clothing contributes 12 percent to living costs.

Now, in all fairness here, you had very bad quality, deterioration on clothing. You have got a lot of very shoddy clothing out today, clothing that is very second quality, and obviously that is inflationary. A shirt that wears only half as long, even though it cost the same figure, has been inflated a hundred percent so far as its value is concerned. That is covered up here. I suppose there was a great deal of it in World War No. 1, too. We have no way of evaluating that, but whenever I point to what has happened to clothing I always like to qualify it by saying that clothing quality has deteriorated

to some extent.

Senator BARKLEY. That was inevitable because the Government had commandeered and used such a large quantity of the wool.

Mr. BOWLES. Well, I think more could be done recently. Then we have had a War Production Board problem.

Senator RADCLIFFE. Did the process go on to the same extent we have just spoken of during the First World War?

Mr. BOWLES. I don't know. I assume it did to an extent; I wouldn't think nearly as much. One thing I think we forget is that the last war only lasted about a year and a half, and here we have already been fighting two years and a half at a much greater rate. The previous war was really a skirmish compared to this. I assume quality deterioration wasn't as bad.

FOOD PRICES BOTH WARS.-The same comparison-this time for food, See chart 72, appendix, page 1555.

What happened to food prices: The last war-these are comparable periods, and these are the various prices foods reached at this comparable period: up 80 percent; up 47 percent. Control of food prices in World War No. 2 has been subject to the requirement that controls cannot be instituted until prices reach parity. Food, according to the Bureau of Labor Statistics, accounts for 40 percent of the cost of living.

LIVING COSTS HELD FOR 10 MONTHS. -The following chart showed that the cost of living had been held without increase for 10 difficult months. See chart 74, appendix, page 1557.

There has been no increase now in living costs for 10 months. Here are the figures. Here is what happened from September 1939 on. It went up. Here [indicating] is where the Stabilization Act was passed. Here [indicating] is where the Price Control Act was passed, there. Here is the Stabilization Act [indicating], and here is what happened, what has happened since last April. The cost of living, according to the Department of Labor today, and not taking consideration of quality deterioration, which definitely should be, is at exactly the same level as it was last April. The line has been slightly up and down as you have had different prices on fruits and vegetables seasonably, but it has not been abnormal.

Senator DANAHER. How about children's clothing? Isn't that a higher spot?

Mr. BOWLES. It is. It starting to move in now. to move better by May. better.

will be less so in the next 30 days. It is Women's expensive clothing should start Children's clothing is now moving out

For 10 difficult months, with inflationary pressures piling higher and still higher, we have held the line.

Wholesale prices are half of 1 percent below last April, roughly the same.

RENTS HELD SINCE JULY 1942. Mr. Bowles' next chart shows that average rentals have been held stable since July of 1942. See chart 73, appendix, page 1556.

There has been no increase in rents, according to the Bureau of Labor, since July 1942. The red-spotted areas are where you have rent control all over the country. Rent is not an across-the-board operation. We put it into those areas which need it.

Since rent control was adopted there has been no increase in the Bureau of Labor statement on rents. Prior to July 1942, before rent control went into effect, they increased 3.5 percent. Today 14,000,000 rented quarters are covered by rent control. That includes 45 millions of people-no; 45 million tenants-men, women, and children. Rents contribute 18 percent to the total cost of living.

Senator BARKLEY. Mr. Chairman, it is 1 o'clock, and I imagine
The CHAIRMAN. Yes; I was going to.

Senator BARKLEY. I suggest we might recess here.
The CHAIRMAN. It will take a while yet, won't it?

Mr. BOWLES. I think about 15 minutes.

.

The CHAIRMAN. Well, we don't want you to hurry, because we are

exceedingly interested.

Mr. BOWLES. Half an hour.

Senator MALONEY. He is wrong. He has a couple of hours.
The CHAIRMAN. Suppose we take a recess until 2 o'clock.

Mr. BOWLES. All right, sir.

Mr. Chairman, I have a statement written out which covers what I am saying here now, and I would like permission to put that in the record.

The CHAIRMAN. Of course.

SUPPLEMENTAL STATEMENT BY CHESTER BOWLES, OFFICE OF PRICE ADMINISTRATION, ADMINISTRATOR

Mr. BOWLES. In my appearance this morning before the committee I assume there is general agreement that the price control statutes must be continued. This assumption is warranted, I believe, by the fact that nothing has occurred in the 2 years since the enactment of the Emergency Price Control Act which lessens the force of the considerations which originally led to its passage. Quite the contrary.

Today our armies are poised and ready. Industry and agriculture are operating under a forced head of steam, under pressures greater than ever before known. If controls of the price and wage structure were wise in 1942, today they are imperative.

Have actual operations brought out defects in the law? Has experience during the past 2 years shown that revision and improvement of the statutes are necessary? These are the questions which I am sure the committee will wish to examine with care.

In enacting the price-control statute in January 1942 the Congress acted in the light of our experience in the last war. The determination was made that this time war inflation and post-war deflation must be prevented. In the last war prices skyrocketed. Steel plates rose from 1 cent to 9 cents a pound. Petroleum went from 75 cents to $3.50 a barrel. Wool increased from 61 cents to $2.05 a pound. Industrial prices as a whole rose 165 percent during that period, enormously increasing the cost of the war. Out of the total war bill of 32 billion, 13% billion represented inflated prices.

The cost of living skyrocketed, too. Sugar, let me remind you, sold for 27 cents a pound. That's not a poor man's price. Butter sold for 78 cents a pound and eggs at more than 90 cents a dozen. There were millions of Americans who forgot the taste of eggs and butter. In terms of the averages, retail food prices rose 126 percent, clothing rose 200 percent, and housefurnishings 179 percent. The cost of living as a whole, including everything, more than doubled. There were high-cost-of-living riots during this period, and the Government was bitterly criticized for having permitted prices to go through the roof.

And as always what went up came down. Prices went up fast, they came down hard. Not only prices, but wages and profits and farm incomes went into a tailspin. In 1921, for corporations as a whole, profits were completely wiped out. What is more, an $11,000,000,000 loss on inventories washed out almost all the financial reserves that

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had been accumulated during the war. Farm prices were cut in half and farmers were left saddled with back-breaking debts for 2 decades. Four hundred and fifty-three thousand lost their farms in the first 5 years alone. Factory pay rolls fell 44 percent and employment 31 percent.

That is the ugly story. That is the story which Congress had before it when these wartime price-control statutes were enacted. It is against this background that we must judge the performance of the Office of Price Administration. The fact is that this time we have held the cost of living to an increase less than half as great as that which took place during the same period of the last war. We have held industrial prices to less than a quarter of their rise during the same months of the last war. The record shows that for the past 11 months we have held the cost of living and the wholesale price level without any net increase whatever.

Before tracing our actual performance in full detail, let me take up the matter of administration, for it is my conviction that it has been defects of administration, rather than of the statutes themselves, which have occasioned the criticisms of the Office of which the Congress is aware.

The administration of O. P. A. there is no gainsaying this-has frequently creaked and groaned. This, under the circumstances, was inevitable. These were the "growing pains" of administration. They grew out of the magnitude of the job, the short notice on which it had to be tackled, and the lack of experience to guide us. Many of the defects in our operations have already been overcome. On others steady progress is being made. The record that has been made in spite of these difficulties testifies to the wisdom of the statutes.

Let me devote a little time to these "growing pains." For while the point is easily made, the full significance of the administrative difficulties is not readily grasped unless some detail is given.

Everyone will agree that the O. P. A. has a big job. But one cannot fully realize how big that job is.

Today we control upward of 8,000,000 prices and our regulations reach into 3,000,000 business establishments, at every level of production and trade.

There are 14,000,000 rented dwelling units occupied by 45,000,000 people covered by our rent-control regulations.

Food rationing requires direct contact with 30,000,000 housewives, representing 132,000,000 men, women, and children.

Thirty-nine million drivers have to be issued gasoline rations. Of these, 16,000,000 hold B and C books which must be tailored to the needs of the individual and which are reviewed and modified every 3 months.

Fuel-oil rationing adds another 12,000,000 householders and building managers to our list of clients. Like the B and C gasoline rations, these too cannot be determined upon a uniform basis but must be tailored to individual needs.

To carry the enormous responsibilities of the Office we have at this time a total of 161,000 workers. Of these, 55,000 are paid employees and 106,000 are volunteers. The number of volunteers has been as high as 325,000 in connection with our major ration registrations.

Of this force, 141,000 serve on or with the 5,400 local war price and rationing boards, 13,800 are in the 93 district offices, and 3,400 in the 9 regional offices, and 3,800 are in the national office here in Washington. In the aggregate, this organization constitutes the largest governmental establishment in our history, except for the armed forces themselves. Yet this wartime force, enormous though it is, still falls short of the job it has to do.

The responsibilities assigned to us were big and we were forced to shoulder the first of them almost overnight. Pearl Harbor cut off our supply of rubber. Tire rationing became a matter of overriding urgency. A program had to be worked out, the necessary forms had to be printed and distributed, thousands of local ration boards had to be established, manned, and instructed.

All this was done in just 29 days. Of course there were mistakes. If we had had 6 months to do the job, it would have been handled with fewer errors. But a delay of 6 months then might have meant that hundreds of thousands of cars and trucks which today are providing essential war transportation would instead be off the roads.

While the agency was still wrestling with the problem of tire rationing and of local board organization, two more rationing programs were assigned to us. The growing shortage of shipping necessitated a quick reduction of civilian sugar supply. To spread these supplies evenly a rationing system was needed quickly. In early April 132,000,000 individual sugar ration coupon books, one for every man, woman and child in the country, were distributed by the O. P. A. to 30,000,000 American families.

In the meantime a crisis was brewing on gasoline. Sinkings off the east coast had begun to choke off the supply of gasoline in the East. Unprepared and inadequately staffed, we undertook to ration because the alternative was transportation chaos throughout the industrial East.

An emergency system of card rationing of gasoline began in May, Scarcely had it been replaced, in July, by the most carefully designed coupon rationing than another major program was called for, this time in fuel oil. Between August and October a fuel-oil program was worked out and put into operation in 30 States and the District of Columbia.

In spite of everything we could do, there were plenty of mistakes in the fuel-oil program. I know because, as O. P. A. director of Connecticut, I was right in the midst of it.

It was a bitter winter for hundreds of families along the east coast. But had we not launched that rationing program, a responsibility for which we were still far from properly staffed, the heating situation in hundreds of thousands of homes might well have been desperate.

If the rationing staff of the O. P. A. could have devoted its entire efforts to fuel-oil rationing it would have been a different task at best. However, during those same months coffee rationing had to be introduced and gasoline rationing extended to the entire country. We had also been put on notice by the agencies in charge of basic supplies that by spring the rationing of meats and processed foods would be imperative. This meant the development of a whole new consumer rationing program covering all the food items in the