JK
421
I'
H
no. 2
B 1,674,149
The Inter-University Case Program
Cases in Public Administration and Policy Formation
..
ICP CASE SERIES: NUMBER 2
•
•
Martin Kriesberg
UNIVERSIT.
OF MICHIGAN
MAY 1.
Cancellation of the Ration Stamps
Distributed for the ICP by
UNIVERSITY OF ALABAMA PRESS
Drawer 2877, University, Alabama
•
1001
LIBRARY,
I
1.
The Inter-University Case Program was organized to encourage and promote the
use of case studies as an aid to the teaching and practice of public administra-
tion and policy formation. Its objectives are:
2.
;
3.
THE INTER-UNIVERSITY CASE PROGRAM
To provide the basis for realistic concepts, hypotheses, and
generalizations about administrative organization, behavior,
and policy-making by utilizing a clinical approach and by
drawing on case studies of administrators in action;
To explore the application and possibility of integration of
the various social sciences and disciplines in administrative
policy-making by collecting and examining a variety of cases
which illustrate the complex aspects of decision-making in the
public policy area; and,
To make generally available a body of case materials which will
be useful for teaching purposes, for scholarly inquiry, and to
practitioners in the field of public administration.
W
While continuing work previously carried on by the Committee on Public Administra-
tion Cases in the general field of U. S. national administration, ICP is giving special
attention to cases in state and local government, in international administration, and
in specialized areas of the federal government.
Membership in the ICP is open to all colleges, universities, and other institutions
concerned with public administration and policy formation. The Program is supported by
annual subscription-membership fees from participating institutions and by a grant from
the Carnegie Corporation of New York.
The ICP furthers case writing and teaching at member institutions by publishing
selected case studies written under the auspices of the ICP, furnishing advisory and
editorial services through its Executive Board and central staff, acting as a clearing
house for information on case development and use, and allocating funds to assist case
projects proposed by member institutions and approved by the Executive Board. ICP
members receive copies of all ICP publications when issued. Information on ICP publica-
tions appears on the inside back cover.
Inquiries may be addressed to The Inter-University Case Program, No.3 Thomas Circle,
Washington 5, D. C.
Cancellation of the Ration Stamps
Copyright, 1952, by Harcourt, Brace and Company, Inc., New York
All rights reserved
7
:
*
خشتے
3-15.59 N
GL
Econ
Direct
1.1356
38-1166
JK
421
. Ib
no.2
CANCELLATION
OF THE RATION STAMPS
CONTENTS
DEVELOPMENT OF THE OPA FOOD RATIONING
PROGRAM
1944 FOOD PROSPECTS AND INDEFINITE VALIDITY
THE FALL CRISIS
THE DECEMBER CRISIS
Food Situation in December
Alternative Courses of Action
DECISION TAKEN
Action Without Notice Inescapable
Implementing the Decision
AFTERMATH OF THE DECISION
Immediate Public Reaction
The Spring Supply Situation
Appendix I. Conclusions on Blue Stamps and Tokens
Appendix II. Conclusions on Sugar
Appendix III. Letter to Editors
Appendix IV. Public Reactions
Bibliographical Note
763
764
765
767
767
767
770
770
770
R
771
771
771
771
772
772
773
773
Development of the OPA
Food Rationing Program
The attack on Pearl Harbor came on Decem-
ber 7, 1941. Within a month, OPA-the Office
of Price Administration-had started its first
rationing program-tires. Other rationing pro-
grams followed with astonishing rapidity. By
the end of March 1942, OPA's three major
food rationing programs were already in opera-
tion.
Underlying the systems employed in these
major food rationing programs was the theory
that every person in the United States should
be entitled to an equal amount of the rationed
foodstuffs. There were minor variations on this
theme, as in the granting of extra meat rations
for miners and other heavy workers; but in gen-
eral, differences in personal consumption hab-
its or needs were not catered to directly.
Two different rationing systems were used
in the three major food programs. For sugar,
books of ration stamps were issued which con-
tained numbered stamps. Periodically OPA
would announce that a particular numbered
sugar stamp would be valid for a stated period
of time (the first two weeks in April, for ex-
ample) and for a stated number of pounds of
sugar.
For the other two major programs, processed
foods, and meats and fats and oils, the un-
derlying mechanics were more complicated.
Within the processed foods category there
were a host of different rationed items-canned
mixed vegetables, canned grapefruit, canned
tomato juice and so forth; the meat program
included such diverse rationed commodities
as lamb chops, butter, pork shoulders, lard,
etc. For all the rationed items in the meat
category, the consumer used red stamps, for
the processed foods blue stamps. Each stamp
was given a fixed value in "points," and pe-
riodically announcements were made of the
period of validity for each batch of designated
stamps, and of the "point" value of each item
in each program. When pork was plentiful, its
point value was reduced; when canned grape-
fruit was scarce, its point value was increased.
The consumer was free to exercise his choice
in spending his red ration stamps for any com-
bination of meats and fats and oils that added
up to the right number of points, over the
ration period, and his blue stamps similarly for
processed foods. OPA, by changing the period
of validity for stamps, and by changing the
point values of different items, kept supply and
demand roughly in line.
The validity periods soon caused an unex-
pected difficulty. The difficulty arose most
dramatically in the case of a non-food program
-shoes; just before the expiration of the first
shoe ration stamp, there were tremendous lines
of customers in the shoe stores: people did
not want to "waste" their shoe ration stamps.
The situation was disorderly, worse than that,
the system was obviously encouraging people
to buy shoes who otherwise were ready to
wait for a day, or a week, or a month, or a
year. After a few months' trial, in September
1942, shoe ration stamps were made valid for
an indefinite period; the rush to the shoe
stores and the hoarding of shoes ceased. New
stamps continued to be made valid periodi-
cally; families with growing children generally
used all their shoe stamps, many others merely
retained possession of their stamps, feeling that
they were there and could be used if needed.
The situation in food, in varying degrees,
was similar. Some food items could be hoarded
easily, others not. But there was in the early
days at least some rush of buying at the end of
each period of validity; the ration system ap-
peared to encourage consumption or hoarding.
It also encouraged irregularities in the han-
dling of stamps by retailers. The cure adopted,
for a variety of reasons, was a compromise:
new stamps were made valid some time (say
a month) before the expiration of the previous
batch of stamps. This device avoided the prob-
764
lem of the rush of customers-but it merely
concealed the encouragement to over-buying
caused by the fixed expiration dates. The ra-
tioning authorities did, however, retain fairly
tight control over potential demands for ra-
tioned foods under this system.
RELATIONSHIPS: RELATIONS WITH THE PUBLIC
1944 Food Prospects and
Indefinite Validity
Anticipations of a good food supply at the
beginning of 1944 were bright and there were
stirrings of hope about an early end of the
war.
These happy anticipations had important
effects for food programing in three different
agencies-the War Food Administration
(WFA), the OPA, and the Office of War
Mobilization, which with its satellite, the
Office of Economic Stabilization, served as the
President's central co-ordinating agency; Jus-
tice Byrnes was director of the former, Judge
Vinson of the latter.
In all the rationing programs, in theory the
supply agency (WFA in this case) determined
(1) the need for rationing of a particular item;
(2) periodically (usually quarterly) the amount
available for rationing to consumers after al-
lowance for military and other needs; and (3)
the time for ending a rationing program. As
one might expect, this neat formulation was
subject to innumerable modifications on both
sides. In the eyes of the public, OPA was re-
sponsible for any rationing difficulties, and the
fact that the supplies on which a ration allow
ance was based were not forthcoming even
though certified as available for the period by
the supply agency, was not something that
OPA could use as a shield. Experiences of this
sort led OPA to make its own estimates of
supplies, to seek controls over supply and to
take other measures: such actions were not
welcomed by the supply agencies. They, for
their part, were painfully aware that OPA's
administration of rationing had repercussions
on price and supply and on their relations with
industry; they sought, with varying success, to
direct or control actual rationing operations.
Justice Byrnes or Judge Vinson, appealed to by
one side or the other in such controversies,
frequently acted as arbiter.
In the early months of 1944, there was sub-
stantial harmony on food policy in the upper
levels of WFA and OPA. WFA, counting on
good supplies and hopeful of an early end of
the war in Europe, was determined that a
prospective abrupt cessation of military pro-
curement should not be aggravated by the
dumping of large government stocks of food,
with disastrous effects for farmers. In spite of
some opposition voices, in March, WFA de-
cided on a "bare shelf" policy, with the corol-
laries of increased consumption and decreased
stocks. Mr. Byrnes approved this policy.
In OPA, Administrator Chester Bowles of
OPA was still fairly new at the job. He re-
garded food rationing as a temporary unpleas-
ant necessity that should be dispensed with
at the earliest possible moment; he therefore
favored progressive derationing. He had
brought to OPA new people from the business
world who shared his views and who were
temperamentally inclined to agree with WFA's
statistical forecasts and policy. Grumblers re-
mained, but the policy was set.
The chief effects of the new policy were an
intermittent but notable easing of food ra-
tioning. Many items were derationed, point
values on most of the rest were decreased.
From early spring to late fall, the rigors of
food rationing were abated, and consumption
of food increased. Thus, for a considerable
period, the only meats under ration were the
better grades of roast beef and steak. Prices on
these items were relatively very high, people
bought cheaper meats, so even here the ration
restrictions had little effect. Ration stamps
were unneeded and unused.
In this atmosphere (though "beefsteak ra-
tioning," as it was called, came later) it was
natural that hesitations about an indefinite
extension of stamp validity were quickly over-
come. Sugar was first: on March 15, sugar
stamps were given indefinite validity.
The problem in processed foods, and meats
and fats and oils was more complicated. For a
long time housewives had had difficulty in
counting up their blue (processed foods) and
red (meat, etc.) points when making purchases;
CANCELLATION OF THE RATION STAMPS
the stamps were issued in denominations of
8, 5, 2, and 1 points; the whole process of buy-
ing groceries was slowed up by the toils of
arithmetical computation. The retailers also
had a problem; they were responsible for sort-
ing out the stamps by denominations, a very
real clerical burden to which they objected
strenuously. To overcome these irritations, a
new system had been worked out over the
months which was finally put into effect on
February 27, 1944.
Under the new system, all red and blue
stamps had a value of 10 points. Red and blue
tokens with a value of 1 point were provided
for change-making purposes. Adding the points
on stamps was easy, and sorting was no longer
needed.
The system was immediately popular but it
contained an inherent
inherent contradiction that
caused almost instantaneous-and very dan-
gerous-reprecussions. The tokens, naturally,
had no expiration date, and
and consumers
promptly began to use up all stamps for the
period and hoard their unused ration points
in the form of tokens which would remain
valid. The national supply of tokens was
promptly threatened. There was, presumably,
only one quick cure: indefinite validity for the
stamps, and this was quickly adopted. As a
matter of fact the cure had been recommended
by some rationing officials before the new sys-
tem was put into effect.
This amendment was made effective on
March 27, just a month after the new token
and point system had gone into effect.
In order to make doubly sure that neither
food nor tokens would be hoarded, Chester
Bowles, OPA Administrator, issued a state-
ment when the amendment was issued, indi-
cating that if at any time it became necessary
to cancel the stamps, he would publicly notify
the people of his intention to do so. The re-
lease issued to the press for March 27, 1944,
said in part:
Major relief for the nation's 600,000 retailers
from the burdens of food rationing was an-
nounced today by Chester Bowles, Administrator
of the Office of Price Administration, in directing
the removal of expiration dates from red and
765
blue stamps used for buying meats, fats, oils and
processed fruits and vegetables.
From now on the red and blue stamps in War
Ration Book Four will be good indefinitely, just
as shoe and sugar stamps are. Advance notice will
be given if it is found necessary to retire any food
stamps.
Before turning to the events of the fall of
1944, one final minor change in system may
be noted. In September, during another spurt
of derationing, so few processed food items.
were left under ration that it seemed feasible
to give all those remaining a value of ten
points each, and this was done. Change was no
longer needed, so the blue tokens were with-
drawn.
The Fall Crisis
The summer of 1944 was a time of high
hopes; the landings in France, the break-
through, the sweep across France; by mid-
September, however, hopes for an immediate
victory in Europe faded. The war was going
on. Even before this time, in the late sum-
mer, the doubters in OPA began to get in-
creasingly concerned, partly because of wor-
ries about future food supplies, partly because
of a technical problem in the two point-ration
systems. The systems were, as OPA had
learned, effectively operable only if each in-
cluded a substantial number of rationed items.
OPA operating officials, whatever their views.
on future supplies, objected to WFA's orders
for derationing of most covered items: they
felt that more items had to be left on each
ration list-or none. Bowles, however, and his
deputy administrator, and his director of the
Food Rationing Division went along with
WFA, and Justice Byrnes insisted that WFA's
interpretation of the bare shelf policy be main-
tained.
In September, there were major derationing
moves in spite of the opposition of the chiefs
of the Meat and the Processed Foods Ration-
ing Branches; the higher officials in OPA
agreed with WFA. Thereafter, the red and
blue ration systems did not work well because
766
RELATIONSHIPS: RELATIONS WITH THE PUBLIC
so few items were still rationed. One signifi-
cant and inevitable result of this situation was
an increasing backlog of unspent stamps in
the hands of consumers. There was always a
sizable backlog, but derationing made the sit-
uation much worse.
With a continuing war, with serious doubts
about the food supply, the OPA rationing offi-
cials decided to tackle the problem. Their first
step was to obtain information. Working at
top speed, officials of the Food Rationing Di-
vision and the Deputy Administrator for Ra-
tioning prepared a questionnaire form which
could be used to find out the facts on unspent
food ration stamps. Various other parts of the
OPA co-operated, the questionnaire was am-
plified to cover some other rationing problems,
and the necessary complex governmental clear-
ances were quickly obtained. The survey was
conducted by the Census Bureau during the
week of October 2. Preliminary tabulations
were rushed through and the general character
of the results was known by the third week
in October.
-
The results of the survey were disturbing.
On the average (there were great variations be-
tween rural and urban families, and among
other categories), people held a 2.8 months'
supply of red and blue stamps and about a two
months' supply of sugar stamps-and these
figures did not include the stamps in all three
programs that became valid in October. If
the war had been about to end, if prospective
food supplies had been ample for a continua-
tion of a light rationing program, the unused
stamp backlog would have made no great dif-
ference. That was not the situation.
1
Clearly the war was not going to end in the
immediate future. As for processed foods, Cur-
tis Rogers, the Branch Chief, saw trouble
ahead. Rogers was a young executive from the
food trade who had lived with the rationing
program from the beginning. He knew that the
new pack of canned goods, the statistics on
which were now available, would not support
a continuation of the then current generous
rationing program. Leon Bosch, chief of the
meat branch, a former instructor of marketing,
reached similar conclusions on his program.
1 See Appendixes I and II.
Both men feared that with the announcement
of tighter rationing that they were sure would
have to be made, consumers would use their
previously unused stamps to clean out the
stores. To make matters worse, inventories
were low, and badly distributed.
The real crisis, however, was in sugar.
Throughout 1944 the sugar rationing system
(including rations for industrial consumers like
bakers and bottlers, and for home canning)
had not been held under tight enough control:
a total allocation of about six million tons
made by WFA was being steadily exceeded
and by the end of the year the excess con-
sumption would total about a million tons. By
November (with the survey results in hand),
Ed Pickett, chief of the sugar rationing branch,
was keenly aware of the excess rationing and
he knew that dealers' stocks were dangerously
low in consequence.
The situation was thus bad, but two addi-
tional factors made it critical. One was the
prospect for the coming year. The total
amount of sugar available for rationing of all
types-home and industrial-was clearly going
to be smaller, not only smaller than the
amount actually used in 1944, but considerably
smaller than the amount allotted for 1944-
and exceeded. The second factor was, of
course, the backlog of unspent stamps which
assumed importance because of the supply
situation.
During November these gloomy facts were
discussed and debated. WFA remained firm in
its faith in a "bare shelf" policy and made no
move to tighten up the rationing programs.
Sugar remained the prime worry, not only
to Pickett, but also to Max McCullough, Dep-
uty Administrator for Rationing, an experi-
enced public official who had come to the
national OPA office, after service in the field.
Pickett presently concluded that there was
just not enough sugar in stock or becoming
available to validate outstanding currency plus
that which had to be issued. In fact, he as-
serted that if the outstanding home canning
stamps were presented for redemption, there
which had been issued in November for the
would not be enough sugar to cover the stamps
day to day sugar needs of the public; the
stamps in the hands of industrial and home
CANCELLATION
users would have become mere hunting licenses
because of the disappearance of sugar from re-
tailers' shelves.
The December Crisis
FOOD SITUATION IN DECEMBER
The threatening situation which OPA had
perceived during October and November
reached a state in December where the offi-
cials became convinced that action was neces-
sary. The sharply reduced sugar allocation
promised to bankrupt the entire sugar ration-
ing system. OPA knew from experience that
rationing collapses if ration stamps cannot be
honored. While WFA now belatedly was com-
ing to agree with the OPA officials on the
general food situation, it still issued no direc-
tive placing various processed vegetables back
on the ration list or restoring various types of
meat to rationing. OPA continued to press
WFA for tighter rationing. WFA, however,
was apparently still standing by its "bare shelf”
program in spite of the facts and was reluctant
to alter that policy or to return to the ration-
ing program in processed foods which had pre-
vailed prior to September 17.
All doubts about a stricter policy were sud-
denly swept away by the Battle of the Bulge.
After the German breakthrough on Decem-
ber 17, excessive optimism about an early end
of the war in Europe was replaced by excess
pessimism.
McCullough and Bowles (who had gradually
changed his views on food rationing) no longer
met active opposition from WFA. Judge
Vinson, Director of Economic Stabilization,
agreed with Bowles's position. WFA then di-
rected the rerationing of many processed foods
and of various meats and a tightening of the
butter ration. The 1945 sugar allocation was
certified to OPA-about a million tons less
than the 1944 allocation, about two million
tons less than 1944 use!
OF THE RATION STAMPS
767
sidering this problem, McCullough soon real-
ized that the other two food rationing pro-
grams were also headed for trouble, and for
similar reasons. Though some officials thought
that drastic action might be avoided for these,
since they were sure that the sugar problem
had to be faced anyway, these programs were
considered along with sugar and, as it turned
out, were the subject of much more debate.
There was a continuing series of conferences
in McCullough's office where possible courses
of action were weighed. The conferences were
attended by McCullough and his assistants
Redford and French; by Burdick, Director of
the Food Rationing Division and his assistant,
Dice. The Deputy Administrator for Informa-
tion, Stanford, and the Director of Informa-
tion Planning, Bennet, were also called in as
was Clark, the attorney attached to McCul-
lough's office.
There was no real dispute about sugar. A
reduction in sugar rations was inevitable and
a further reduction adequate to permit the
unused stamps to be used was far too drastic to
deserve consideration. Everyone agreed that,
with the announcement of the ration reduc-
tion, people would start to use their unspent
stamps. The whole system would then break
down. Since sugar was not part of a point sys-
tem, the strain on sugar supplies could not be
eased by increasing ration values of other com-
modities. Cancellation of the unused sugar
stamps seemed the only solution, and cancel-
lation without advance notice, for advance
notice would cause a run on sugar that would
be disastrous. As will be seen, some of the
arguments used in the debate on meats and
processed foods also applied in the case of
sugar. But the sugar program was different in
three important ways: (1) the supply situation
was worse; (2) sugar was not part of a point
system; and (3) OPA had not promised to give
advance notice of the cancellation of sugar
stamps.
The situation in the red and blue point pro-
grams was more complicated. By the same
reasoning that applied to sugar, it was gener-
ally felt that if rationing were tightened, i.e.,
if consumers had to spend stamps for more
food items and to pay more points for various
items, unused stamps which had not been
ALTERNATIVE COURSES OF ACTION
The need for drastic action on sugar was
early apparent to McCullough; but in con-
768
RELATIONSHIPS: RELATIONS WITH THE PUBLIC
used in previous months would come into the
market. Accordingly, the most urgent problem
was how to blot up this reservoir of stamps
which threatened to flood the market and
wash away existing stocks of sugar (as has been
noted) and other rationed foods. On previous
occasions when it had been necessary for OPA
to take up the slack in the red or blue ration-
ing program, i.e. when reduced supplies of
those foods were anticipated, OPA had merely
increased the point values for the respective
products. It was at first suggested that this
method be adopted in the present instance. By
increasing the point value of each item, it
was obvious that OPA would cause people to
use up many previously unused stamps. People
who had not found it necessary to use all their
points before would be likely to do so under a
program of higher point values on a larger
group of foods. However, it was also recognized
that this method would work a hardship on a
majority of the people. As has been pointed
out, the surplus of stamps was not evenly
scattered among the people but clustered in
the hands of certain groups of people and in
certain areas. The majority of people did not
possess several months' supply of unused
stamps. If point values on foods were raised
and more foods were placed on the rationed
list, the people who had little or no holdings
in unused stamps, would find themselves hard
pressed to obtain enough food for their day
to day needs. The fact that they had ap-
parently found it necessary to spend most of
their previous stamps in the normal course of
their living during the months when rationing
was not tight seemed to indicate that they
would not have enough if points were raised to
any considerable extent. But unless points were
raised substantially, the unused stamps in the
hands of a good minority of the people would
be enough to clean the shelves. The backlog
of unused stamps had to be reckoned with in
computing the new point system. Thus this
proposal did not seem to present an equitable
solution to the problem.
A second alternative was that which claimed
the support of most of the OPA officials in
the operating branches. This proposal was to
invalidate the backlog of stamps and thereby
to begin 1945 with a clean slate. OPA would
then become solvent by refusing to honor out-
standing currency. Burdick was favorably dis-
posed toward the proposal as a way out of the
dilemma, but continued to hesitate during the
conferences. Dice was more consistently for
it. Dice had come over from Agriculture when
the food rationing program was first begun,
and had earlier been Chief of the Sugar
Branch; his argument ran approximately along
the following lines: The unspent ration stamps
represented a potential threat to effective ra-
tioning; while not all of these consumers would
spend all their ration currency, the fact that
rationing had to be made tighter would prob-
ably bring a large part of the unused stamps
onto the market. Accordingly, these stamps
had to be taken into account in reckoning the
new point values. Yet if this two months'
supply of surplus stamps were figured into the
rationing program, the majority of people
would suffer; it would be necessary to set a
considerably higher point value on all subse-
quent purchases of rationed goods. This would
mean that only those who had a surplus of
stamps would be able to obtain adequate
amounts of rationed food while all other peo-
ple would be hard pressed to pay ration points
for the food they needed. People with a sur-
plus of stamps had shown that they did not
need them. If they had needed them, they
would have spent them. Therefore, OPA
could not be charged with taking food from
their mouths. It was fairer to the majority of
people to wipe out the stamps unused in the
hands of some of the people. This was fairer
than the alternative of raising the point value
on rationed foods to such a level that it would
absorb the surplus points in the hands of some
of the people. For this would have made it pos-
sible for these people-the very ones who ap-
parently were not dependent upon rationed
foods-to go into the market and obtain not
only their fair share of the 1945 food supply
but also an increase to the extent that they
had a surplus of 1944 stamps.
This was substantially the view taken by
McCullough. However, McCullough was con-
cerned about the possible repercussions of such
action on the public and it was for this reason
that he had brought the public relations men,
Stanford and Bennet, into the conferences.
CANCELLATION OF THE RATION STAMPS
769
since Bowles had made a promise to the pub-
lic that they would be notified before their
points would be declared invalid, invalidation
without notice would be wrong. Ration points
had become in fact what they were called in
OPA: "currency." Indeed, during the war
when money was more plentiful than certain
foods, the ration currency had come to have
more real value than money vis à vis rationed
foods. Accordingly, people would actually feel
as if they had been robbed. To Stanford, Dep-
uty Administrator for Information, the prob-
lem of maintaining public faith in OPA was
the principal disadvantage. Stanford had been
an advertising agency man who had come
down to work with OPA during the war. He
stressed the public trust inherent in adminis-
tration. Should OPA invalidate the stamps,
people would lose confidence in future decla-
rations by OPA and thus OPA would add to
its own difficulties in rationing foods. But
above and beyond its effect on the agency's
public relations, was the broader issue of the
people's faith in the statements of the gov-
ernment. OPA had secured the people's trust,
slowly and arduously. This faith which had
been built with considerable effort, was never-
theless fragile. The proposed action would
undo much of the results they had thus far
attained.
McCullough wrestled with the problem of
working out a solution which would on the
one hand effectively remove the threat of the
unused stamps in the hands of the consumer,
and establish rationing on a sound and solvent
basis with the new year and which would at
the same time be palatable to the public. On
the issue of invalidating the unused stamps,
the point was raised by Stanford that Bowles
had promised the people when ration stamps
had first been issued with an indefinite time
for their use that should conditions require
that stamps would have to be invalidated, he
would notify the people in advance. At the
time the change was made from monthly
validity to indeterminate validity, it was gen-
erally assumed that the stamps might be can-
celed every six months by prior notice. This
method had been proved successful in the shoe
rationing program. However, the seriousness.
of the food situation which confronted OPA
in December 1944 had not been anticipated
nine months earlier. Thus when the suggestion
was made that a ten day or thirty day notice
should be given of intent to cancel 1944
stamps, there were grave doubts of the wisdom
of such prior notice. McCullough felt that to
give people notice of intent as Bowles had
promised, would precipitate a run on the stores
which would wipe out the small stocks in the
hands of dealers and wholesalers. Further-
more, notice would precipitate a great increase
in the trading or giving away of stamps thus
adding to the total demand on food stocks and
adding to the unequal distribution of foods.
Thus the issue became simply one of in-
validating the stamps without giving the peo-
ple prior notice or of not going through with
the proposal to invalidate the stamps. Stanford
and Bennet both were inclined to forego in-
validation. Bennet was a young executive who
had been in advertising before going with OPA
as assistant to Bowles in rationing tires in Con-
necticut. When Bowles had been appointed
OPA Administrator, he had taken Bennet
along to act as Director of the Information
Planning Division. (Stanford was the top man.)
Bennet was extremely concerned over what the
public's reaction would be to the proposal to
invalidate the stamps and over the difficult job
of public relations involved. Bennet felt that
But the operating division officials remained
unconvinced. They were sure that breaking a
promise to the people was better than giving
people who did not need the food a priority
upon remaining stocks while depriving the
people who really needed it. However, Bennet
and Stanford had a further objection to can-
cellation: it would lead to improper use of the
canceled stamps. Under the rationing system,
dealers were required to deposit their receipts
of ration stamps in their ration bank or with
their wholesaler each month. The banks and
wholesalers were allowed ten days to two weeks
after the period, to deliver the used stamps
into the hands of the OPA officials; the ma-
jority of retailers, who did not have ration
bank accounts, had even more time. This pe-
riod would now make it possible for dealers
to accept the canceled stamps and simply add
them to those which had been used for pur-
chases during the pre-Christmas buying period.
770
RELATIONSHIPS: RELATIONS WITH THE PUBLIC
It would be difficult to control this. Consum-
ers could be told that they were not to give
the canceled stamps to dealers because the
dealer could not honor them. However, be-
cause of this very suggestion (to both dealers
and consumers) or because many would not
understand, it was likely that when a dealer's
customer asked him to accept the stamps he
would be likely to do so-especially when he
could do so with little likelihood of being
apprehended. Furthermore, many housewives.
were in the habit of giving their books to the
dealer to tear the required stamps for their
purchase from the ration book. A dealer could
thus readily avail himself of these canceled
stamps and add them to his Christmas period
returns and sell an equivalent amount of ra-
tioned goods point-free.
A final argument advanced by Bennet and
Stanford (originally suggested by French who
had formerly been with the shoe rationing
division) was that cancellation without notice
would have an adverse effect upon other ra-
tioning programs, principally shoes. The situa-
tion in shoes was becoming as critical as that
in foods, stocks were dangerously low and a
run on shoe stores would have been very se-
rious. Bennet and Stanford argued that a can-
cellation of the food stamps would foster ap-
prehension over the continued validity of the
shoe stamps and would be likely to precipitate
a run on the stores to obtain shoes before the
coupon would be voided. The coupons had
been issued without an expiration date but
notice of future invalidation was issued periodi-
cally. Thus people knew that their stamps
would not remain good; but they had counted
theretofore on ample warning. The failure to
give advance notice in food rationing might
suggest the possibility of similar action in the
shoe program.
Decision Taken
ACTION WITHOUT NOTICE
INESCAPABLE
Despite the arguments advanced by Stan-
ford and Bennet and the hesitancy and reluc
tance of Burdick, McCullough came to the
conclusion that cancellation of stamps was in-
escapable. During the long and arduous con-
ferences which were held during the weeks
before Christmas, he cast around for some
other method of accomplishing the ends
sought. But every other alternative seemed to
offer less effective results while some action
had to be taken-and that at once. The only
way to assure equitable distribution during
1945 was to make equal shares of food avail-
able to all. This could not be done by saying
to some: "you can have your 1945 share plus
your balance of 1944 stamps' worth." It was
McCullough's belief that the public interest
would best be served by violating OPA's pledge
to the people and giving all the people a fair
shot at the food; OPA's greatest obligation was
to secure equitable distribution. Accordingly,
though he felt the action would incur public
wrath, McCullough recommended the action
to Bowles, who agreed with him that it was
the best of bad alternatives.
IMPLEMENTING THE DECISION
It was decided that the cancellation of
stamps would go into effect on December 31,
a Sunday, at a time when dealers were nor-
mally required to reckon up their point bal-
ances for the preceding period. The announce-
ment was scheduled for Saturday night since
there could hardly then be a serious run over
the week end when most stores would be
closed. However, some ten days before the
order was scheduled to be released, a leak de-
veloped. OPA had acquired the voluntary cen-
sorship of the press on stories of runs or stories
which might precipitate runs. Nevertheless,
one newspaper man learned of the cancella-
tion story and made it clear that he intended
to print it. Accordingly, McCullough and the
others decided to move up the date and went
into action to have the releases out during the
Christmas period. Christmas was on Monday,
the story was released to the press and radio
as confidential until December 24 with the
cancellation of sugar and processed food
stamps taking effect December 26 at 12:01 A.M.
It was announced that meats would go back
on the rationed list on December 31. The
information department sent an urgent mes-
CANCELLATION OF THE RATION STAMPS
sage to the press explaining the circumstances
of the decision and asking their help in mak-
ing the people understand the necessity which
prompted the action. (See Appendix III.)
"Fact Sheets" giving the statistics regarding
each of the rationed foods which had led up to
the action were supplied the press and radio
also; these Fact Sheets were prepared by fur-
ther use of the information collected in the
October survey. Civic and trade groups were
urged to co-operate in bringing the facts home
to the people. The attempt by the Informa-
tion Department to take some of the heat off
OPA was not entirely successful. As can readily
be understood, it was a difficult job of public
relations
771
after, indicated that the majority of people
had not really been hurt and that in fact the
majority were not angry with OPA as might
have been expected by a perusal of the OPA
and Congressional mail on the subject. (See
Appendix IV.) As in similar cases, those who
take the trouble to write are those who feel
especially strongly on the matter.
Aftermath of the Decision
THE SPRING SUPPLY SITUATION
As had been expected, the supply of sugar
for civilian use during the spring of 1945 was
smaller than in any comparable period during
the war. The situation in meat was even more
critical during the spring of 1945; many areas
were without meat for days. It was generally
agreed among OPA officials that if they had
not taken drastic action on the meat rationing
program in December, there would have been
a meat famine in many areas of the country.
The situation in butter was equally critical.
Processed foods, while less critically short than
the other rationed foods, were nonetheless
scarce during the early months of 1945. Thus
there is evidence that drastic action had been
necessary when OPA canceled the stamps.
IMMEDIATE PUBLIC REACTION
While some newspapers co-operated with
OPA by explaining the how and why of the
action, it was too complicated a problem to be
made clear to the masses of people. There had
been no time to break the news gradually; to
condition the people; to build up a proper
frame of reference. Some newspapers and com-
mentators were not unhappy at the opportun- Appendix I
ity for calling attention to this "latest" evi-
dence of OPA's incompetence. Some people
were prone to gripe about "bureaucrats" in
general and OPA in particular. But besides
these, there were some people who had been
hurt by the sudden action. Individuals who
had denied themselves the use of all their
points because they felt it was patriotic to buy
only what they could not do without; others
who had been saving their points to have a
little something extra when a son came home
on furlough, and so forth. Whatever their
personal reasons, OPA's mailbag quickly as-
sumed gigantic proportions; Congressmen
(who also had been hearing from their con-
stituents) were also perturbed about the action.
Eventually, the continuing efforts by OPA to
explain the causes which led to the cancellation
and to point out its unquestionable fairness to
the majority of people began to take effect.
Surveys which OPA conducted shortly there-
CONCLUSIONS ON BLUE STAMPS AND TOKENS
(Processed Foods Program)
I. TOTAL OUTSTANDING STAMPS EQUAL TO 2.8
MONTHS' SUPPLY
(a) No. of unused stamps
reported by survey
(b) Estimated no. of un-
used stamps in U. S.
(Value 16,730,000,000
points)
(c) No. of months' supply
(d) These outstanding blue
points are sufficient:
(1) If distributed among
all institutional us-
ers, to supply them
with their normal
allotments for 14
months.
(2) If spent for canned
fruits in #2½ cans,
206,506
1,673,000,000
2.8
772
RELATIONSHIPS: RELATIONS WITH THE PUBLIC
at the average value
of 65 points prevail-
ing in October, to
buy 10½
10½ million
cases, or 18% of the
1944 pack.
(3) If spent for fruit
juices in #2½ cans
at the average value
of 40 points prevail-
ing in October, to
buy 17 million
cases, or 68% of
the 1944 pack of
rationed juices.
(Grape, pineapple,
tomato and vege-
table combinations.)
II. 45% OF OUTSTANDING STAMPS ARE IN THE
8-SERIES, ALL OF WHICH BECAME VALID
BEFORE AUGUST 1, 1944
Estimated unused stamps
in U. S.:
Total 8-series stamps
Total 5-series stamps
Total of both series stamps
756,000,000
917,000,000
1,673,000,000
III. 26% OF 8-SERIES AND 70% OF 5-SERIES
STILL UNUSED
Per cent of total stamps validated:
Appendix II
Used Unused
73.7 26.3
30.4 69.6
39.9
8-series
5-series
Both series combined 60.1
CONCLUSIONS ON SUGAR
14,777 Ration Book holders were "sampled"
in an October survey. We wanted to get signifi-
cant information on unused ration currency, opin-
ions and attitudes about sugar. While this survey
may obviously not be projected accurately into
a National picture, it is an important indication
of conditions generally. After analysis, these are
our conclusions:
(1) 71% of the people doubt the need for
sugar rationing after V-E Day; or have no
opinion, or say, "it depends."
(2) 42% do not believe sugar rationing is
necessary.
(3) 60% say they get all they need; 10% more
than they need.
(4) 50% of farm families say they do not get
enough; but only 25% of city people get
less than they need.
(5) There is, therefore, an extremely important
over-all job of information needed to ac-
quaint the public with the vital need for
continuing sugar rationing through at least
one more year.
(6) On October 1, 27% of home canning
stamps No. 40 were unused. (33% of city
dwellers and 15% of farm dwellers.)
(7) 7% of regular sugar stamps are unused
(twice as many in cities as in rural areas).
(8) 86% of farm families, 73% of rural fami-
lies, but only 51% of city families re-
ceived home canning coupons.
(9) Including all sugar stamps issued and valid
(Nos. 30, 31, 32 and 40 and home can-
ning coupons), the average consumer has
unused ration evidence worth 4 pounds of
sugar and equal to about two months'
regular ration. Outstanding Stamps 30, 31,
and 32 would buy 65,000 tons of sugar.
Outstanding Stamps #40 would buy 80,-
ooo tons. Outstanding home canning cou-
pons would buy 103,000 tons. All together,
they would buy about 250,000 tons. Of
course, a great number of consumers still
have Stamp No. 33 which was validated on
September 1st.
Appendix III
LETTER TO EDITORS
OFFICE OF PRICE ADMINISTRATION
Washington 25, D. C.
Office of the Administrator
Personal and Confidential Until December 27th 1
Dear Mr. Editor:
I want to enlist your help in a group of major
problems which confront me today and which
affect the daily lives of all of us.
I don't know of any time while I have been
Administrator of OPA when we were faced with
so many situations that required so many decisions
that were bound to be unpleasant and that so
urgently required understanding and co-operation
from the public.
To create that understanding I feel I must rely
to a great degree on the editors of the country to
1 This date was moved up to December 24 at the
last minute.
CANCELLATION OF THE RATION STAMPS
explain the facts which had to be faced in decid-
ing our rationing program for 1945.
Here are the facts:
Present estimates from the supply agencies indi-
cate we will have less meat, less butter, less sugar,
and less processed food for civilian consumption
in the first quarter of 1945 than in any 3 months
of the war. An end of the German war in 1945
will not significantly alter these shortages.
OPA will announce a two-fold action to meet
this situation for release in morning papers, De-
cember 27th. The first part of its action is an
expanded list of rationed foods-adding processed
foods-including most canned and bottled vege-
tables-raising the point value of butter, placing
about 85 per cent of the meats under rationing
control and tightening sugar rationing.
The second action will take out of circulation
a very large number of unused ration stamps and
coupons by cancellation.
Here are the jobs I especially seek your help on!
1. To bring home to the people the facts about
the food supply situation.
2. To emphasize that rationing works not on
the principle of taking things away from people,
but to make it possible to share them.
Appendix IV
Opinion Briefs
January 27, 1945
PUBLIC REACTIONS TO RERATIONING AND STAMP
INVALIDATION
The recent rationing changes elicited a tre-
mendous volume of discussion within a very short
time, but the comment tapered off very quickly.
The Twohey Analysis of Newspaper Opinion
reported that for the two weeks ending January 6,
1945, the general topic of shortages and rationing
led all issues, both domestic and foreign, in the
amount of editorial space it received. For the
week ending December 30, 60% of the comment
dealt with the tightening of the rationing pro-
gram. During the following week, only 35% of
the editorials discussed the changes in the ration-
ing program. And for the week ending January 13,
the changes in rationing are not even mentioned
as one of the major topics of interest.
A telegraphic poll on January 3 of 21 members
of OWI's editorial panel located in 19 widely
distributed localities indicated that the criticism
of the changes was already subsiding.
According to reports from DIEs on January 3,
70% of the grocers in 87 cities scattered through-
773
out the country thought that criticism was defi-
nitely subsiding.
In general, the stamp invalidation aroused the
bulk of the unfavorable comment. OWI's Analy-
sis of Editorial Opinion reported 314 editorials
dealing with the rerationing and stamp invalida-
tion between December 26, 1944 and January 4,
1945.
Comment on the rerationing ran about six to
one in favor of that change; most of the editorials
pointed out the relation between rerationing and
the military situation. Most of those opposed
either expressed or implied the idea that political
considerations had prompted the earlier relaxation
of rationing and that tighter rationing was being
resumed now that politics were no longer a factor.
Comment about the stamp invalidation was
about four to three against the action. Some of
the unfavorable editorials spoke quite bitterly
about "repudiated government obligations," and
"breaking faith with the public." About a fourth
complained that the thrifty and patriotic house-
wife had been penalized in favor of the extrava-
gant ones. Most considered the move unfortunate
and unwise, felt that public confidence in OPA
had been seriously impaired, and that this would
lead to hoarding and over-buying. Some of those
favorable to the action also expressed the fear
that there would be hoarding as a result. Those
editorials in favor of the change in general related
it to military considerations, pointed out that the
stamps probably had not been needed if they were
still unused, and regarded it as the best solution
to a difficult situation.
Bibliographical Note
Certain aspects of the cancellation story are
described in
Joseph A. Kershaw, A History of Ration
Banking, G.P.O., Washington, 1947.
The whole story is told as part of the general
history of OPA, in
Harvey C. Mansfield and others, A
Short History of OPA, G.P.O., Wash-
ington, 1949.
Mr. Kershaw drafted Chapter 5 of this volume
which covers the cancellation episode; but this
particular incident takes on more meaning if it
is read in the light of the general development
of OPA from 1941 to 1945.
The episode is treated separately as a problem
774
RELATIONSHIPS: RELATIONS WITH THE PUBLIC
in the use of research in administration with
emphasis on the use of the October unused-stamp
survey in an article by
Joseph Kershaw and Harry Alpert, Jour-
nal of Social Issues, Vol. III, No. 4
(1947), PP. 40-48.
The episode is also told in abbreviated form in
Victor A. Thompson, The Regulatory
Process in OPA Rationing, King's
Crown Press, New York, 1950.
Professor Thompson uses the cancellation his-
tory as a case study in his analysis of the problem
of values in administration; it will be found on
PP. 250-254. It may be noted that Professor
Thompson concludes that the decision was based
on the principle of equality of sacrifice in spite
of objections based on competing principles (e.g.,
numerical equality) and technical prophecies (e.g.,
runs on other commodities). He does not, in his
conclusion, cite the technical prophecies about
the effects of alternative decisions that supported
cancellation.
The present study was originally drafted on the
basis of interviews before any of the foregoing
appeared in print, but use has been made of
these accounts in the process of final revision in
1951.
PUBLICATIONS OF THE INTER-UNIVERSITY CASE PROGRAM
The ICP publishes in individual pamphlet form the public administration case studies listed
below. Included are those previously published by the ICP's predecessor, the Committee on
Public Administration Cases. Twenty-six of the case studies (those asterisked) have been
collected, with other materials in a Case Book
PUBLISHED BY HARCOURT, BRACE AND COMPANY, INC., NEW YORK:
Cases in Public Administration and Policy Development. 1952.
PAMPHLETS DISTRIBUTED BY THE POLYGRAPHIC COMPANY OF AMERICA, INC., NEW YORK:
CPAC Case Studies, 1948-1951 (previously published by the Committee on Public Administra-
tion Cases)
*The Air Search and Rescue Program. 1950
*The Attack on the Cost of Living Index. 1951
*The Battle of Blue Earth County. 1950, revised 1950
*The Cambridge City Manager. 1951
The Consumers' Counsel. 1949, revised 1950
*The Defense Plant Corporation. 1950
*The Disposal of the Aluminum Plants. 1948, revised 1952
*The FBI Retirement Bill. 1949
The Feasibility Dispute. 1950
*The Foreign Service Act of 1946. 1949, revised 1952
*Gotham in the Air Age. 1950, revised 1952
*Indonesian Assignment. 1950
*The Kings River Project. 1949, revised 1950
The Latin American Proceeding. 1949
*The Natural Cement Issue. 1950
*The National Labor Relations Board Field Examiner. 1951
*The Office of Education Library. 1950
*The Reconversion Controversy. 1950
*The Sale of the Tankers. 1950, revised 1952
*Self-Insurance in the Treasury. 1949, revised 1952
Smith and the OPA. 1950
*The Transfer of the Children's Bureau. 1949, revised 1952
*The TVA Ammonia Plant. 1950
1. The Firing of Pat Jackson. 1951
*2.
#3.
#4.
ICP Case Series, in progress, 1951-
*5.
*6.
*7.
*8.
*9.
<
Cancellation of the Ration Stamps. 1952
The Emergency Rubber Project. 1952
The Glavis-Ballinger Dispute. 1952
The Regional Director and the Press. 1952
Production Planning in the Patent Office. 1952
1
Edited by Harold Stein
The Rural Electrification Administration Personnel Report. 1952
The Veterans' Gas Ration. 1952
The New York City Health Centers. 1952
W. Scott Payne
Kathryn Smul Arnow
Paul N. Ylvisaker
Frank C. Abbott
Kathryn Smul Arnow
Clifford J. Durr
Harold Stein
Joseph F. Marsh, Jr
John Brigante
Harold Stein
Herbert Kaufman
Charles Wolf, Jr.
Arthur A. Maass
W. Scott Payne
Paul N. Ylvisaker
William H. Riker
Corinne Silverman
Jack W. Peltason
Louis W. Koenig
Kathryn Smul Arnow
Robert L. Gold
E. Drexel Godfrey, Jr.
Ellen St. Sure
William H. Riker
Martin Kriesberg
Martin Kriesberg
Winifred McCulloch
Arch Dots on
Winifred McCulloch
William H. Riker
Herbert Kaufman
----
f
UNIVERSITY OF MICHIGAN
3 9015 06792 8682
=:
!
:
་
:
2.
J