Download Citation Data. Share Twitter LinkedIn Email. Working Paper DOI Issue Date May Related Topics History Macroeconomic History. Programs Development of the American Economy. The military needed resources, and it needed them at a reasonable price. To keep resources flowing and prices down, the government was restricting consumer access to a bevy of beloved products, from sugar to tires—unless you could prove your work was essential. An essential worker could buy new tires right away, but a non-essential worker would have to wait for synthetic rubber production to get off the ground.
In this way, wartime frugality became an explosive political flashpoint. The rural South was outraged that preachers and ministers were not considered essential, and so Franklin Delano Roosevelt was too.
He called in John Kenneth Galbraith, his lieutenant in price management with the Office of Price Administration OPA , to ask him to ensure that ministers received their proper designation.
During World War II, pricing and production were too important to let the market bid up the cost of war material. Tires, cars, coffee, sugar—these were issues of critical national security. The size of the OPA reflected this; its staff of , was rivaled in the federal bureaucracy only by the Post Office. OPA had twice the number of economists as the Treasury Department; its decisions made front-page headlines. Yet today it has been all but forgotten.
There were, however, also those who lost considerably as a result of inflation. These included both wage earners and all recipients of fixed incomes, in particular broad sectors of the civil service and pensioners.
The extent to which the process of inflation also triggered a development that implied investment activities extending beyond the end of the war has not been sufficiently examined.
In general, it can be said that the increasing shortage of resources led to an increase of inflationary pressure as the war continued and that investments constituted a possibility of escaping monetary devaluation. The civilian population was called upon to play an active role in welfare and aid associations and to offer its services for the fatherland.
Women and children collected clothes and blankets for the army and hospitals, and materials like wastepaper and iron for recycling. When the population reacted to shortages of bread and flour in January with panic buying, the Kriegs-Getreide-Vekehrsanstalt [Wartime Grain Trade Department] introduced ration cards. Individual quotas were determined and handed out on presentation of bread and flour ration cards.
But even the allocated rations became more and more difficult to supply, and the cards became worthless. Around the turn of the century anti-Semitism entered the political agenda and became part of the ideological programme and guiding principle behind political activities. We employ strictly necessary and analysis cookies. Analysis cookies are used only with your consent and exclusively for statistical purposes. You can also find further information in our data protection declaration.
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