338.5 IJn4su lion. Somma lions cf the ministration I lonTX. aaxvuoddODNi sionaodd ooov AM 10»w 092 da ^3QH\S SS3HM00^ k <]!)»< aii» 3sn| smaiARY OPERATIONS OF THE OFFICE OF PRICE ADMINISTRATION IN THE TERRITORIES AND ISLAND POSSESSIONS REGION IX OFFICE OF PRICE ADfniil STRATI ON JAJ'IES P. DAVIS - REGIONi\L ADMINISTRATOR MAY, 1947 • ■ S9ff?5r ' '''V?W,. t'' '^[3 ■'- V ■5' spBKfi,.',, ,-;, , ■ ■■,rf. V\:''*;'''i;#»F' 'i**'■ : . ' ' ,-. • \ r ■! ,\f'^ :-. V ^ • .',v ' ’ 9 \ ■* ■ ' ,ipf,*||l ... ,' ' ^ ■'-1'V'' ■^' ■ l'' '. "' *' , I'V . ■ .,' ••; ^.. ■' . , •),, ,'■■‘f, : -■ -,’ ., , ‘’- • ■'?• V 14' '■' •■■' ^ * ^' 1 . i, -iC ;»■':'V- ■v'Wr '. ■''"■■ " ,; ’;^' 4i:''r ',•4 >• / 'i—iif» , ti • ' ■■/ ‘ \ •'^'* ■ .r,'!'•'■’^ L K • ' r* *■ ,;'■; i--n■ ■ ' ; ■ / -v'-; vyy'! . t;/-'.V r 4'■ .-y:; u'. *1 : »Y ; f • .i 1 >' • . • ■ • , ■^ •** ' "b/r' ,v'M' , /. ' ■' ' '•: ''' '■/ . . * . .i'H \ mr . : ^ ,•:/ •'■V' V A. f 1 . '• ' ’, . > ■ . J y'tW /" ■ ^:Vv.-yy^ - A > ‘ »' •' ' t . ■■ !• ‘yr*'. ' ^'v’* - -'vlff' : '■.•*‘*.i)V' *'Si ■"''‘‘v.--' ;r' - y ^ V ',; >;' y.,v .. :.K,'. ■ . V :V'' . ■^' • '■r 1^1 ,y ■V . '''Jt ti' t2v .'i’f y • < -J , ‘ ^-1 :' ~''.'Vi *A -m i . ir . .'.W ‘'.' >‘'v,.‘ 4’'*^. ■ •‘I™ ' ■ ■ ' 'i"- '■ - ' ' ' *‘ • ' ■ • . , -t,-'iVy s*' i . . , ’ •. ‘fl • .. * ’:V'' rj « ( r ' - . 'V ; ■ ’ J"'-- ^ Vv/V\ • 'J ‘ '\ ■ ^ , :i y V> t ' •■>. '-.*■ ' ''y .y , ' FA V \ • yrv^ * ’ ' ‘,., •■ • ;m ■- ■ yy^i y:< *) W' ■ ^,'■ ‘FW-V ., A , 9 ■, •s-iLC^'r5?ii'. ny. .v»i" ' ■ • I ' /. ■ I j 4'< 'Mik r ,, -r.-v .'a ■11 •‘ A-'.' 1-iar. . K^. % '/I * .^,JI W'^■?:-wi‘’ .>V46#'1 p’: iti>-itetffilLj'-i: ?JjK^ •-,>*', i^'V; -i^r .“'f-fs■b'rA.t ■ •;»-/‘>jt'>?iE- 'Xs«.ji|^j..a H'Jp.' Iji - ‘ 1.’. >.‘,! -..** i.r V'lf fiVx^ n rrHAf-5l5^^lb - .'j ■ ■ •‘ ■'* ir^3'| biTA Si>^ .* ’ I "5*1 *>. '■ ri'iH■--: qAi%ijilr. n'^1 <3)fi^. v w --,%';;• >^ ' 44 ^^ ■ f 4 II T i n ^ li j i ( tjin —wi n i H» ■. r: . s xifi r 6-sifK. fSyjtv t: -olM ^-y t*t ) "A ■■ ir-i't ^ ‘'^^-J*^^■ ' ''?R > '#'•. I f jJ ■( V'lr'/* . • “ '”'* 'Vi'; ’ ffsi’c' 5o» - -fci VA j;--r‘ rr •; v*i;r- in ' y.'. .V '.O^ .;.A,5>i s y, ■'. ly f ■ ’■.*.••.•"■ .' .•■ d r.v ■ ,'. iT.j T . ,’r. 0/ •-T 4 'f> ' ’* '^■• - ‘ ‘ r‘ o^\-. - ., nrti' '•?**;f,'.ja V 7 t.*'":’-'4f ■' L*-*4 y:iM H*,'. * ir • -1 4 -• ' 1 ^ < ^rr • ,..i'* «. *•*'? A .«vd . .1«3«# ;vN*. VM •■. ##ilA - 3 - D. ....with the approval of the Deputy Administrator in charge of rent and the Regional Administrator, a territorial rent officer may be appointed to each territorial office. E. The principles and methods of communications established in Administrative Order No. ii shall apply to Regional Office No, IX and its subordinate field offices with such modifications as differences in organization and the technical means of communi¬ cation may require. Section 3 (oT Supplement 3). Additional Functions of Regional Office No. IX. It shall be the responsibility of the Regional Administrator for Region IX, in addition to the duties assigned by Administrative Order No. U to; A, In cooperation with the operating divisions in the National Office, assemble and analyze economic, price and other data necessary to thd application and administration of price, rent and rationing controls in the territories and possessions, em¬ ploying so far as possible the existing organization and staff of the Office of Price Administration. B, Consult with the heads of other Federal agencies and with the governing officers of territories and possessions on problems of effectuating commodity and rent control policies in the terr; tories with special regard to the use of and liaison v/ith terri¬ torial governmental agencies. C, Establish, tiirough the appropriate National Office division heads, liaison with the responsible heads of industries pro¬ ducing or distributing commodities in the territories to secure the promotion of and compliance with commodity control policies in those territories y ft-ft-' .t.i . ,• -r TTi^rr-T ' •(/.. r. -(.-I I 1^. '•;■» i; JJC r'l ., • v'lli • V.-*. < !«' ai : Cii -lli v«' ! tn« ' » »'r. - j lit f Vi - u - D. Reconmend to the Administrator action necessary to apply general commodity and rent controls in the territories and possessions, and recommend to the Senior Deputy Administrator such nevj- poli¬ cies, adaptations of policies and adjustments in methods and procedures as are necessary for efficient administration of such controls. Administrative Order No. li was revised later but the operations of Region IX were not changed after its original establishment. J/Bny of its operations continued to be based on the first informal understanding be- « tween the Regional Administrator and the national Price Administrator and many things were done becaxise "they have always been done in that manner" Ihe Directors were appointed and each of the Territorial Offices established soon after the Regional Office vra.s authorized; A la ska May 19^2 Puerto Rico June 19^2 Virgin Islands June 19i{2 April 19li2 June 19ii2 LAND AND TRS PEOPLE Canal Zone 1 / Hawaii Geographically, Region IX embraced the easternmost, westernmost, northernmost and southernmost extension of the Office of Price Administra tion. The Virgin Islands arc a group of islands acquired by the United States in 1917 W purchase from Denmark. The group, comprising tliree small inhabited islands, St. Thomas, St. Croix and 5t, John, and many tir^ iminhabited islands, lies approximately li;00 miles southeast of 1/ Until March, 19113, OPA acted purely in an advisory capacity since iTawaii was under military' rule. * \ ( 6 - 5 - New York and only [lO miles east of Puerto Rico. In 19U0 the population of all three islands was 2^,000 but at the present time probably is in excess of 30,000 — predominantly Negro. Living standards are low and the Islands benefited relatively little from the war boom. Puerto Rico, with the three very small adjacent islands of kona, Culebra and Vieques, is situated approximately ihOO miles southeast of New York and 1200 miles east of Miami. It has a population of more than 2,000,000 Spanish-speaking persons of whom less than 20 per cent speak English. The average money income of wage earners in 19iil (a fairly prosperous year) was $3S0 per family per year. Unemployment has been gradually increasing since early 19h2, and the island experienced few, if any, of the economic benefits resulting from war production. The Territory of Hawaii is a chain of islands in the mid-Pacific Ocean approximately 2100 miles from San Francisco. Almost 99 per cent of the population of more than 900,000 live on five principal islands, Oahu, Hawaii, Maui, Kauai, Molokai. Racially this population consists of Hawaiian, part Hawaiian, Caucasian, Chinese, Filipino, Japanese, Korean and Puerto Rican. The largest single racial groups are the Japanese, which accounts for 37 per cent, and the Caucasian which com¬ prises 29 per cent of the total. The pure blood Hav/aiians make up only 3 per cent of the population. Labor shortages made it necessary to recruit large numbers of work¬ ers from the mainland. A wage spiral began in 19ill that was unchecked I until the establishment of a Vj'ar Labor Board office in Honolulu in 19iil-i. A study ty the U. S. Bureau of Labor Statistics in 19ii3 showed that the average monthly income of Virage earners was s;)Ul9 per family. Volxmie of business in all lines of endeavor tremendously increased and Hawaii was a ••war boom" area c ■tv \ / - 6 - The Virgin Islands, Puerto Rico and Hawaii all have a semi-tropical climate, warm but not hot the year round. Alaska, with an area a little less than ore-fifth the area of the mainland thited States, extends from a point approximately 600 miles northwest of Seattle, 1800 air line miles north to the Arctic Circle. The estimated population of 100,000 people consists of approximately equal proportions of white and Indian and Eskimo. Alaska had a large influx of population, both civilian and military, during the v^ar. Pur¬ chasing power reached a very high level and labor shortages were acute. The war brought greater prosperity to an already prosperous Territory. There is a very marked contrast between the United States islands in the Caribbean and the Territories of alaska and Hav;aii. In neither the Virgin Islands nor Puerto Rico was there a true inflationary situa¬ tion. Instead, there was low purchasing pov/er with the pressure on prices caused by short supplies resulting from transportation difficul¬ ties, and increased costs of commodities because the continental United States is the principal source of supply. Havraii and Alaska, hmevcr, were definitely war boom areas. Both benefited economically from vmr construction. Full employment at increased wages caused purchasing pov;er to be far above normal, THE PANAM CANAL ZO^JE It has been said "The Panama Canal Zone is unique among all lands 1 / subject to the jurisdiction of the United States." Unlike the other areas under jurisdiction of Region IX, the Canal Zone is not a state, territory, possession or dependency within the generally accepted mean¬ ings of those terms. Because of this uniqiie position and the peculiar 1/ The panama Canal in Peace and War - Norman J, Padelford >2 '^ 1 ^/ 353 ;?^^ ©<: ic^'UiXuil nirt? cfe^-'jV / / »; - 7 - situation v/ith respect to the so-called "Government controlled economy" in the Canal Zone, the local activities of the Office of Price Administra¬ tion were quite different from the activities carried on in Alaska, Puerto Rico, the Virgin Islands and Hawaii, The Office of Price Administration as such did not exist as a separate and distinct organization in the Canal Zone. Instead all ration orders promulgated by the Office of Price Administration and deemed by tie Regional Administrator as being applicable to and necessary in the Panama Canal Zone, v/ere administered by the Governor, v;ho in his capacity as Rationing Administrator for the Caml Zone, acted through two boards known as the Canal Zone Rationing Board and the Canal Zone Gasoline Ration ing Board, respectively. The clerical work, tire inspection service, in¬ vestigation of violations, publicity and other detailed activities of this set-up were handled by regular employees of the Panama Canal organi¬ zation under an arrangement whereby the Office of Price Administration, with the approval of the Birreau of the Budget, transferred funds to the Panama Canal for expenses incurred in administering the rationing pro¬ grams • GENERAL FEATURES OF THE CAt-AL ZOIJS The Canal Zone is an area approximately ten miles wide, extending five miles on each side of the Canal from deep water in the Atlantic to deep water in the Pacific, except the city of Panama on the Pacific side and the city of Colon on the Atlantic side, which arc adjacent to the Canal Zone communities located at the t'wo Canal terminals. The Canal is UO .27 statute miles in length from shore line to shore line, and 50.72 miles from deep v/atcr to deep water. The actual area of the Canal Zone is 552.95 square miles, of vfhich 362.01 square miles is land area and 190 .9U square miles v^tcr area. No land in the Canal Zone is privately ov/ned, and the Zone is in effect, a Government-owned reservation .i4i ■' y m 'm, ■:. L- *■ v4 '' ;>, ■>'?» ikoiir ctr ' a ^ f^r M\4i^h ^^.v\ ■;^■^v.n <\(}U ( '•;^]' ■ >,. ,.^vv-v-ij. . .J^ >* Z/r/'V.’/n vrjr'. ffi\v**-*J -j/ri mt -'r?t. ii..U:.;iv c»-i_.if?', .'f^ .^ 1 ■X; '‘>r,X . . "• V .ft'sVt-f ^rvX' ?''U^--’-ji W iT^ •i.-te-w .V 'V ^ ;j. . *;;:»| .^v. .,^/ i.i>'- m ^ 4^HI • i-v' 'tw* t :n-i^5^J^?.^ -4ii UK‘* ; j'.. : ^0, C'/ >v;h V ''■v'’ . ■ «. • : v> ■ • _ 1^ J^$. [1£k' M^|^40||. 4tfi - '.'v>*..r.- :-; i4r^..-.v5,'3H^'‘« iif, ,.; «l; ■ •* ■ .-- /.4( .% < W '.,. Xt—'•• '‘' ‘‘i ^ . 1 .^ 11 ^- aW v'^' ••*/» H]ltf litlBi^M^l 1,'^^ <• i‘*. >* i ^ V 'iC^u^ .‘‘it * .vtl ^:^ rrrf4 -%p ,lg4$$Ji 4» 7 ‘f. - *> ■ :' . ':! '..•.r*V HfSr ff\im ■ • ^Jp . * s ^ ^ ^ 4 tr^i IfMi:} . i* ir»,. t-.. > •■•f i.-'/£tl»«i|i = .•3’i'<'.i4.j*q(( ;-^«p ■ xKii ?B »'* ■ ‘ ^ =• •. • I . 5<» . ^ ■? •.v,4Pj _,. l^-t ^ I"' T- ■' 1 - .Ml -. ax dedicated to the operation, inaintenancc and protection of the Canal and its appurtenances. The population of the Canal Zone consists chiefly of American civilian employees of the Panama Canal and the Panama Railroad Company and their families. United States Army and I'hvy enlisted and civilian personnel and their families and native and West Indian employees of the United States Government agencies on the Isthmus and their families. Practically all tlie American employees of the Canal-Railroad organiza¬ tion and their families live in the principal communities, which arej Cristobal, Ii&.rgarita, and Gatun on the Atlantic side of the Isthmus, and Ancon, Balboa Heights, Balboa, Diablo Heights, Cocoli, Pedro Miguel, and Gamboa on the Pacific side. Tbe civil population of the Canal Zone in 19U5 was iil 4 , 688 . RATIONALE OF RSGION IX In the organization of an office to administer price control in the Territories and Possessions, it is significant that the Administrator selected as first Regional Administrator a former Director of Territories for the Interior Department, Dr. Rupert Emerson, whose ex].:)erience in handling Territorial matters liad impressed him with the necessity of en¬ couraging the Territories to govern themselves. Organizationally, he conceived, it as desirable to maintain a sirall staff in the* nature of a home base iii .fashj.ngton, and larger, bettor equipped staffs in the areas to bo admixiistered. Administratively, he believed that controls could be more effectively and efficiently imposed by those who knew their people and the local econony and who v.^erc respected and trusted locally. The $ emphasis from the outset, therefore, was on decentralization of functions, a condition which the National Office saw the desirability of achieving at a much later date. / \ ; f ■( \ ■ / - 9 - I Despite this initial objective, it became immediately apparent that at least for the early stages of development, a well-rounded price control staff must be maintained in Washington. Price control v;as little understood even in the Capitol, but technicians and techniques were be¬ ing quickly developed. Experienced personnel were not yet available to staff the field offices. Pricing methods were being tried and modified or discarded. It was, therefore, important that the Territories should be adequately represented in ViTashington by a staff equipped to keep its fingers on the pulse of developments in price control. Furthermore, the nature of the dependence of the Territorial econo¬ mies on the continental United States necessitated coordination of matters having an indirect bearing upon price control. In the outlying areas the control of prices was inextricably bound vrith matters involving shipping, transportation, communications, labor, rationing, export-import controls, customs,, and the like. A further factor requiring the maintenance of a strong V/ashington staff was the efficiency gained in coordinating much of the v^ork of the several Territories. Inevitably those matters were administered in Washington. Changes in conditions and circumstances exaggerated by a war economy required constant modifications and variations affecting each of the Territories. The integratien of price control programs with other governmental activities affecting the economies of the Territories be¬ came an important function of the Washington Office. Although each area had problems peculiar to itself, each area also had identical problems of organization, administration, staffing, and relationship v/ibh other branches of the government, such as the Interior Department, Agricul¬ ture Department, Office of Defense Transportation, viar Production Board and the Vifar Labor Board. By centralizing the handling of common problems, '»• - I- t - 10 - the Regional Office was not only able to save nuch time and money but alsc could contribute substantially to the elimination of the confusion result¬ ing frcm working at cross purposes. Furthermore, since regulation-making at the inception of Territorial price control v/as the business of Washington, and the field offices in the continental United States were not even adequately equipped to regu¬ late locally, it was necessary for the Territories to look to Washington for the development of legally sustainable regulatory measures tailored to their needs. The price and rationing regulations applicable in the continental United States could not have been structurally applied to the Territories without creating inequities vfhich could have imposed undu( hardship upon their economies. Ivkny of the early regulations wore made applicable to the Territories without conscious consideration of their economic effects. Fortunately, no one sought to enforce them until they were amended to meet area conditions. The inability to apply regulations and utilize pricing techniques developed for the continental United States became apparent when the GMPR was unwittingly mde applicable to the Territories. The freeze type of regulation utilized in the General liiaximum Price Regulation first issued in I'feiy, 19li2, selected base periods vrfaich had no reasonable relationship to relatively appropriate base periods for each of the Territories. In Puerto Rico and the Virgin Islands and Hawaii and Alaska, there was a considerable lag betv/oen the time the goods v/ore procured in the conti¬ nental United States and marketed in the Territories. This lag might extend from one to three months and as much as a year in some areas of Alaska, Selecting freeze dates, therefore, became a problem, not only closely tied in with economic development in the Territories, but also with economic development in the continental United States. Ihe prices V • '.‘■''if • 10 'w t..i. '‘/I IOl^ES%tej '?<(J' 19 *^.■^'.if^^^ ^ >|'tjBf' y ‘i '.. ' 'r'tl ■‘'(''■Ji '4. ..IIWW ^ t »!r*Tt-/7 !• i•f^ifv«;f 4iri i Mfa# »«y«ffrrio Mvfi wlf i.‘T - ^ H • 19 trill’ .'.^j/'? »*! ■.% w., .. -iv^ty*’ > ». ' "J ’••!?1*‘ ra .fbK I.OIW « t#* ...f K >1^ 1%^-4 4HP ' i I k** I .■•| ■' J '■'" ■ IV ■^'V ^ny «* i-in* 1 * 'Ji- ^- '.'r • » ~ L'TO*' ■ '. .IJ •■ f ■^•iSltwr^ Ojr j<»iitc.* !rfio*‘-Tf ’ .*'» t-’t .’>*■•!.. (-'.rnM- Mi96|iura^ (AMtiri Ag ’ 1115 ".'^ I air,*7. , , Jl.rr AWl^ ' j |il| Hf/IT ." ■■»' -.'/> 4 ■• »* ■' '■)■:. . IW ■ 9ie«t r’ • ■» •r ;i > '-'2: '! ■ iS> ^i -. Ot.Q .\r^t3'tjr tw K T^ » .;fa; i cjfH£.<^f9C^r AJi9 - 11 - of some items were frozen in the continental United States; others were priced on a dollar and cents basis. Neither, as of the date when they were frozen or priced in the United States, represented a basis for a selection of a freeze date or a price date for the Territories. Ihe margins provided at various levels of production and distribution in the continental United States bore no resemblance to the nergins reasonably required at various levels in the Territories. Tivhereas most items market-' ed in the continental United States v/ere produced here, most items market¬ ed in the Territories were brought in from the continental United States. Whereas the normal method of distribution in the continental United States involved sales by the manufacturer to the wholesaler or jobber thence to retailer, the levels of distribution from manufacturer to consumer in the Territories might involve manufacturer, wholesaler or jobber, exporter, importer, viholesaler, and retailer. Wliereas transportation costs for the most part might represent a snail proportion of the total cost in the continental United States, transportation to the Territories and within the Territories was a sizeable factor. Vilhereas labor costs in the conti¬ nental United States were relatively high, labor costs in the Territories would vary from extremely low levels in the Virgin Islands and Puerto Rico to extremely high levels in Ha^jaii and Alaska. Vn^ereas rav; materials produced in the continental United States were utilized to produce agri¬ cultural commodities or manufactured commodities in the continental United States, the rav/ materials utilized in Territorial production were for the most part brought from the continental United States. i/Yhereas the stand¬ ard of living in the continental United States was relatively high and permitted increases in prices to be absorbed by the consumer or shared by the various levels of production and distribution, the standard of living in areas such as the Virgin Islands and Puerto Rico was such that f m 14- " - fnU .It ft>*ti« Mmvr tr i ta 4 .'"iriw ^ z$n»»tni5 ♦ t; : t:%ni 3 ?i . • ijftj '/■ fip«f4'i5 «afi| ,. « , 'I > Aw srx's^'A ^ cc iM# 4 » ••il.(i’'J :th Ip A CA.fc 36 i-r ■: . a x/S :^‘ * 3 k 4 |^iywiop -iKalt;' - <♦**.- 11 ? . c .’. •;E;^<‘*•►^ ^a^cJI tuM -^<5 ."'r..-i/fyon .♦ t ^ 4.4 .<)•*.,; .r^i* . -.'li hViUpa’ 9 i|a i-Lt »& p{fitj^n *‘.'> uiv* *>0^ fti 4f^§Kf 4* 1>« V . t?. vf . «iMB at nnA*.n^H».*:n' It? jEKKiv^r^ J^-vtoo e^pWlf I -•i 9 iSJa$ - r a .7 n.. '04 ittf ni •xMttummt et £" 1/^ i\tr tsvttt:j[ij>ih ;• ^ • % >5?' / • >> . ’ V * - • ' I . I 7oie } V. flBh. sKvii^ ' / ■ ^' 9fi7 cu >iRii jM^'^iiiiRin* T fifiA * ^ ..^ ^ * • ,u tTJttfS^ i'- 7nDC^ . -.1 ^'iBq J^»r», Id 7. 53^A^ptrll-.aflKr ^ 1 < '1 •'-- -tTlVv: 'nU >7?' rfilf * it ' JU .„ „ i ■ f •>!/;»' ♦Vr'a^t '^utM c«l’V>i:“n-. -U ni f&iijs ‘ ;.. Ldli|ii4|.i;^7Efty j$i U 4 M- • * .. ' • ,4iMt4CA . -• • Kia/;/■.•7 ...•» i| •-ij:.n . •.. -Jiiil t ',> ttfJr.jt. -iVidt AtiJ -j hi l i f l > '•■•v-t- '•' ' A* Xltf 9l’ie?‘. £-1 .Ai r.’&c TMTa : -.7« I It) •>: , Idl 4i44|Mld1|r fa^ i •‘•' ai^<’ X$ *• I it4MbV .*vi‘> '.^*2*’ ./i?T liua tMinClft^ nt 4^*-' ■-'• i ‘•rtl I -^-rtS • . 4 , I *if *^ :■ : ^,ir. ofU Wii - 11 - of seme items were frozen in the continental United States; others were priced on a dollar and cents basis. Neither, as of the date when they were frozen or priced in the United States, represented a basis for a selection of a freeze date or a price date for the Territories. The margins provided at various levels of production and distribution in the continental United States bore no resemblance to the margins reasonably required at various levels in the Territories. V^hcreas most items market-^ ed in the continental United States were produced here, most items market¬ ed in the Territories were brought in from the continental United States. Whereas the normal method of distribution in the continental United States involved sales by the manufacturer to the wholesaler or jobber thence to retailer, the levels of distribution from manufacturer to consiimer in the Territories might involve manufacturer, wholesaler or jobber, exporter, importer, wholesaler, and retailer. Wliereas transportation costs for the most part might represent a small proportion of the total cost in the continental United States, transportation to the Territories and within the Territories was a sizeable factor. Yilhereas labor costs in the conti¬ nental United States were relatively high, labor costs in the Territories would vary from extremely low levels in the Virgin Islands and Puerto Rico to extremely high levels in Hawaii and Alaska. Whereas rav,r materials produced in the continental United States were utilized to produce agri¬ cultural ccHiimodities or manufactured commodities in the continental United States, the raw materials utilized in Territorial production were for the most part brought from the continental United States. i/Thereas the stand¬ ard of living in the continental United States was relatively high and permitted increases in prices to be absorbed by the consumer or shared by the various levels of production and distribution, the standard of living in areas such as the Virgin Islands and Puerto Rico was such that > • - v’llT * fiC^ vv^ fl^ ir»w -'.rt B •' “' yft^riSii •tW ffi 6 n n ofO'i# v*' . ‘ *u'rr?i,*7l*:t? rcf * t-v « : *' • •»'.' -rc^- otti a It m-^^oalri *.. Hi. ("rri... ^ •^'Vf ^xi< '’-*• " taJ^tift * I .- iK. • .Jt» jri? r.5 ; ,-r-vu )'3*'sSiM • '«>& .' •''Tf» f j *r Hfin iju'.jf: .' •»r»*r' n' '■>- uti »iV4T UBS at lut' U '.1 .-ytc.tc^ -b’ ^A-.y.v.-t rj:: 1 *•£>*; -K .«toUJtt3 t Kl^i-.' .' tJnl J jai?.3 -/JL4at -1, »: >; \ r~‘Sn :’r«p-A'"/ , «iLi ssn %m 4^^, --eafciiiT .•^‘ ^ _ ^ ^ -i*V' •» . ^ ■i ? ’•vt’a /%*» r ' ^ * f .lOff, ^ v’-.r* mat •-i/. •»/ ijf r-iA^ j , -•f.-ntJ ^^;;’ -J ro-i tsttt% •i't^ti ^ I'TtKi 4^ •? ,♦//»' I ^ tJMtm 4li ' ." - b>^ . ^/V ■' y-C ttvnsr rT* 5r jw '-/V 4^ ti ras pressing actively programs to alleviate chaos brought on by v'- ' ' • .1 ^ 4 .\ f'"*. '• 1 1 t ( / ‘’■r I - 15 - the toll of war risk insurance and the closing of channels of supply. Each of these aspects of the v/ork deserve mention. In the emergency that existed in the summer of 19U2, it was not possible for the staff in San Juan to think out a systematic program of price control. Ideas took shape one by one as individual problems v/ere bitten into. The general features of the problem which, it is to bo emphasized, took shape only while and as day by day emergencies were being faced were the follcwv'ingj !• From the point of view of the consumer nowhere under the Ameri¬ can Flag was it so important that there should be effective price control as it was in Puerto Rico, The citizens of Puerto Rico were impoverished; they had no capacity to stand a rapidly rising cost of living. Strate¬ gically, as it then appeared, the island was of maior importance. 2, The heart of the problem lay in controlling the price of food¬ stuffs, These, according to surveys conducted in 19^1, constituted 60 per cent of the total cost of living. Clothing accounted for an addition¬ al 10 per cent. The problem of controlling foodstuffs, and secondly, clothing, was predominantly the problem of controlling import prices since Puerto Rico depends overwhelmingly on the United States as a source of supply. 3. y/ithin the island the imrketirig organization v/as rudimentary. Individual merchants could not be typed as retailers or wholesalers or importers, for they frequently traded at all three levels. Rather, it was necessary' to tab transactions to which appropriate price ceilings might apply and to permit any seller making a transaction of a given type to receive the ceiling price appropriate to it, U. Accounting practices, if they existed at all, v;ere so diverse that it was impossible to apply in any systematic nay the standards of fe^■c.■V^;*^.,^.■■■^;,,^^ •'*'1il£'#'4S?#ite;S.' <'M^. t" ' ^ ( 1 . '* * . ■'-' I ‘ ■ V !•> ^^pV-vTi-v -x., •tr- ■ '''' ■ ,v; ^ i«A^r' '’'' '* '. - ■ ' /' ■'■ ■:v.-.;.,V.’«'rir 4>-tW'li v ■> ‘ •' -.o • ' ' ^liM ' f,f,' '•'".„ ' I ' f '‘. ^' ' * - 1. •i? ’ ' -' ' » ' . <■ V Bjff, . ■ - r . !^1 '■,'W' „„ ■*; .;;:■•> r^'"-, :■ '^ . - J, - •; - ' ■■:--•» OOnM^-: W ■ *-!t< •Wiik.Sv , v-." ■' '. - -■•■ "•■-- ■ . • ' s. »!<•>'■■ ;’/-rS >'V'.*' :.?l — ■^51 :^' ’ ^ ■ ■ r.y; . ViV *9“la8-^f?; v •V • ' ' ^ ^ « -. » I ' **i V':. ' '■ ■ • ':' "’" ' -■ ■■ ^■■■' " ' • ' ■ t^' I..'.,' .' ’ ' ’ < I.. /’* ’■''' ' — , ■ • . '.■O'M; .<:;. . ‘-fr' •< ’,£. }' X t ^ ,: ■'^•^*V-i J' ■-’ ■* ■ , Ti*'.- ,'v'’>':<^" • ^ f . ' ' ' , '■ ■ ■’ ,-' ^ • -*' . . ..'■ ' •• ■ ■ *' * r jt V ,■ ‘rif •*. UJ*. •^' --jXi. . ' «l ■ /v ?'■ .fc k • 1 '. ••f,i ' ■' * H '■'. ■ • . VI. .rl- : i;i'fTf/ v'.-l.. ’tf’;' :^.k'' >‘^'•^'■^•1 •• . -t ■• •C' .;'T ■ -'.ito , o-i'f-'^ ■;) ’ »{ . ify,. f/C»y•|*|,>*>k.< . •. :;r ^ 1 !.• ^ < ■ ..M> ■ >L v^ ¥■ •» *.- -* w! ^■''' I ‘?^>^ai»^vr_i':i.; v.,i.. ■/! . " ki:.1 ■Va' 1 . ’ '-’S.A'^j . j--* ' ■y.;- Tii- ^ V ‘ * y ■ *S • ^ ,*t ..;i — - ,^41 - 16 fairness set forth in the Emergency Price Control Act. Rather, it could at best be hoped that it v/ould be possible to determine what unit margins, either in dollars-and-cents or percentage terms, had historically pre¬ vailed. 5. Ihe merchants of the island had only the most general notions of what price control meant. There were available to them virtually none of the trade and press services which kept raerchiants in the States up to date. In attempting to fill this gap, the OPA found that the lack of communication facilities to small merchants v/as a serious handicap. 6. The language problem was a most difficult one. Conferences had to be conducted largely through interpreters. Regulations had to be translated into Spanish. Publicity had to go out not only in the language the people spoke, but also in a iiB.nner that would command their attention and respect. As the characteristics in the problem just no led were making them¬ selves clear to the Territorial staff, the Regional Office was partici¬ pating in the development of programs v/hich s truck at the roots of the inflation price* A basic factor influencing any control of prices in Puerto Rico was the gjrration of war risk insurance rates. Between December, 19^1, and July, 19h2, these rates increased from a negligible charge to l5 per cent of the value of cargo from the States and 25 per cent of the value of cargo from South America. This v/as one of the first major problems con¬ fronting the Regional Office v/hen it v/as established. It required months of inter-agency negotiations before it v/as finally solved. V/hile it existed, it alone prevented effective price action upon imported articles. In August, 19U2, rates v/ere stabilized under the iJar Shipping Administra¬ tion at 3/U of 1 per cent on shipments from the States and 2 per cent or less from South America. I \ I - 17 - The supply situation was another problem, involving inter-agency action, with which the Regional Office battled all during the summer and early fall of 19h2* At the time the Puerto Rico OPA office opened in June, I 9 I 42 , the submarine campaign in the Atlantic was at its height and for two or three months Puerto Rico was virtually cut off. Tragic scarcities of essential commodities developed and there was great pressure on prices. Rice, the most essential food commodity, which in 1938-39 had sold at 5 “ 6 cents per pound went to 20, codfish from I 34 to iiO, The shipping authorities meantime had shifted all Puerto Rican traffic to the Gulf Ports, leaving large quantities of goods stranded in Eastern warehouses. It was not surprising under the circumstances that prices continued to rise rapidly on foodstuffs not under GMPR and on many commodities nominally covered. With March, 19^1, as 100, the food cost index rose to lU3 by June, 19U2, and 158 by December, I 9 I 42 . Recognizing the probability of food scarcities in the Territories under wartire conditions, the 77th Congress had appropriated ^15,000,000 to be administered by the Division of Territories and Possessions of the Interior Department for civilian food needs in the Territories. It was intended at first that this should be used to assist private firms in stockpiling an adequate food supply, but the extreme urgency of the shipping situation and the increasing difficulties in procurement and transportation in the States led to the decision that the Government must take over the entire food program. On July 17, 19U2, the Departments of Agriculture and Interior entered into an agreem^ent under which the Latter would procure for the former an adequate supply of essential food¬ stuffs, feeds and fertilizer to be distributed by the General Supplies Administration, a Puerto Rican agency, at prices approved by the OPA. (After October, 19ii2, the Office of Distribution of the Department of / / . \ ; v'v/' ;^J . V ) *?* i» t Agriculture~operated its ovm distribution centers.) Moreover, the Interior Department undertook to subsidize the price of the most important commodities so that they could be sold at a price vhiich would not be too groat a hardship on lov/-income families. 'The most important of these commodities were rice, codfish, beans, corn, and lard. This program, which began to function under complete Federal Govern¬ ment operation in October, 19ii2, not only saved the isla.nd from grave food difficulties and possible near-starvation, but gave the OPA the foot¬ hold it needed to bring prices under reasonably good control. Although the jiistification of this program seems to have been evident enough, it was never accepted -wholeheartedlj^ by the major merchants in Puerto Rico, perhaps for the reason that their import commissions were sacrificed. From the point of view of price control, the most important feature of this program was that the Federal Government agreed to announce prices, stabilized for three months, on basic foodstuffs laid dawn in Federally operated virarchouses located at key distribution points throughout the island. At the same time, it also became necessary to allocate lard and rice at the wholesale and retail levels v/hich gave the C'PA a complete list of all sellers and a highly effective v/eapon in its pov.-er to cut off supplies of price violators through its agreement vdth the supply authorities that they would deprive violators of further supply. It was at this point, in the late fall of 19u2 nearly a year after Pearl Harbor, that the OPA was finally in a position to begin an effec¬ tive and orderly price control program. It v;ill be well to suinmiarize briefly the implications of the program in its initial steps in order to bring them into near focus. 1 / This agency was knovm in Puerto Rico in the beginning as the Agricultviral Marketing Adm. (AMA.), then Federal Distribution Adm. (FDA), and finally Office of Supply (OS). For purposes of this report, it v/ill be referred to as FDA since that was its best known title • \ ! r* * i ‘f,*'i** T.r \ '. 17 '■ • * .1 ■^ii / - 19 - 1, A coriununity like Puerto Rico is particularly liable to inflation' ary price increases. Physically it is at the end of a long supply line,, a fact in itself v/hich is likely to produce spasmodic supply conditions* From a business point of view, it is also at the end of the supply line. In times of shortage and national crisis, suppliers in the States arc in¬ clined to protect their domestic franchise, to deal with customers \7ith whom they have close contact, and to nake shipments where relatively little red tape or simple routing arrangements are possible. (The IcrTOr credit rating of merchants remote in Puerto Rico would seem not to have been a major factor, since during the ivar, most exporters insisted on opening up a letter of credit before merchandise was shipped whereas normally they had accepted pa^mient via banks in Puerto Rico once merchan¬ dise had arrived.) 2 • From an operative point of vievi, the OPA suffered greatly in its early stages from lack of staff training in the general economics of price control or in the peculiarities of the Puerto Rican economy as the case mdght be, and also from the lack of inter-agency planning. 3. Both the fact that inherently the Puerto Rican economy was subject to violent inflationary pressure in times of crisis, and the fact that the establishment of controls involved unusually difficult admi.nistrative problems emphasize the necessity of early and farsighted planning. In 19Ul-li2, an enormous amount of inflationary damage v/as done because price controls vrere tardy, and the effort to get on top of the situation required more than a year — June, 19h2, down to the third quarter of 19U3* U. A reviov/ of OPA activities even in their early stages points to the value of active local participation in a program. The experience of the Insular General Supply Administration v;as not fully capitalized. On I • ’ >4 • * . * ® -£ M c - 20 - the other hand, the practice of staffing the office primarily with Puerto Rican citizens of outstanding ability and of limiting the staff sent from the States to a small number intimately familiar with the technicalities of price control proved to be eminently sound. The team was well rounded in terms of experience and training, BASIC D/lPORTaD FOODSTUFFS Vfhen the Federal Distribution Administration (FDA) was ready in the fall of 19h2 to lay down basic foodstuffs at fixed prices for sale to ^vholesalers, OPA v/as prepared to establish maximum prices at wholesale and retail. Prior to this time, however, Ii/IPR 183, conceived as an omnibus regulation to cover the sale of products in Puerto Rico suscepti¬ ble of specific treatment, had been issued on July 20, Products had been brought under this regulation as rapidly as the underlying cost picture was sufficiently defined and as adequate data were assembled. Thus, between July 20 and October 21, dollars-and-cents markups had been established on rice, and flat prices had been established on fatbacks, cigarettes, corned beef, and milk. Tne major progress, hov.^ever, was made betv;een October 29 and December 9, 19h3, when virtually all basic imported foodstuffs were flat- priced. The FDA made these products available and prices were stabilized for a three months period at any of its warehouses. In the main, no grade or brand differentials were specified. Ibrms were cash. It wis certain that FDA prices represented legitimate purchase prices in the States and, in general, the lowest transportation and handling costs that were available. Given this firm basis, ideal from the point of viev/ of price control, the OPA had simply to determine v/hat markups had been normal in the island and to spell out the appropriate maximum prices at v;holosale and retail. In establishing normal markups, the OPA I - 21 - in principle allcvied 'those narkups (do liars-and-cents) which had been prevalent in 1936-39* It modified this principle to allovf normal mark¬ ups in percentage terras'in those cases in which perishability was a major factor• For a time FDA v;as virtually the only food importer in Puerto Rico. Gradually, as private importers were able to establish their ability to obtain shipments of products of the second order of importance, canned goods for example, such items were turned lack to private hands. But from the fall of 19i-i2 to the end of the war, the Federal Government pro¬ vided Puerto Rico with its basic diet, and it held prices at all levels virtually unchanged through this entire period, NON-BASIC IMPORTED FOODSTUFFS As noted above, the FDA grad’oally returned to private hands the responsibility for importing foodstuffs other than basic essentials. This de-velopment entailed complex problems for the OPA, for it ■'//as evident that equitable price control v/’ould have to take account of established brand, grade, and cost differentials. Handling this problem involved the following steps; 1. A concerted effort was made to urge the importer to check his orders with the OPA in San Juan at least informally before confirming them. This v/as to avoid the impossible situation whereby a merchant would receive a consignment of goods, approach the OPA with the bill of costs incurred, which might be out of all reason, and ask for ceilings high enough to bail him out. Such a merchant could not be told that he v/ould simply have to learn his lesson by absorbing his loss. For the ansvrer, which had an irrestible appeal, was that after all this merchant had, in spite of risks, brought to the island supplies which were needed, in some cases desperately. Pi’oblems such as these had to be handled mainly < - 22 " by administrative discretion, but with the strongest possible persuasion to merchants to verify their costs and obtain an indication of OPA's attitude before closing transactions♦ 2. After making the best possible effort to establish the legiti¬ macy of landed costs,the OPA applied importer, v/holesaler, and retailer imirkups normal to the classes of merchandise involved. Recognizing (a) that some variations in landed costs v^rere inevitable even though purchase prices in the States were stabilized; (b) that the products involved were not the basic foodstuffs of most of the people of Puerto Rico, and (c) that in the long run the most satisfactory control could be obtained by flat-pricing, the markups allowed by OpA were som.ewhat more generous than the minima which could have been justified and were designed to leave a small cushion so that cost fluctuations could be absorbed. The first regulation spelling out ceiling prices on canned goods on a brand-by-brand basis was issued on April 30, 19h3» It covered essentially all of the brands of canned vegetables and soups sold in Puerto Rico, more than 300 items. Frequent additions were made as additional items were imported. From time to time the office published and distributed to all merchants in ruerto Rico and to all individual and organized consumers price lists covering not only the basic commod¬ ities imported by FDA but also the multitude of items imported by the trade. LOCALLY GROWN PRODUCTS Vvhilo Puerto Rico lives primarily on imports, it was necessary to provide regulation of four groups of locally produced items which were of substantial importance, namely, milk, fresh beef, coffee, and broad, crackers, and macaroni. The general characteristics of each of these regulations may be briefly noted. - 23 - Examination of the milk problem in Rierto Rico established the follovring important characteristics j 1. The marketing system was rudimentary. Only half-a-dozen dis¬ tributors had pasteurization facilities. Milk was sold to the consumer principally from "puestos" or stations, usually in containers provided by the purchasers. ViTide differentials in prices prevailed from one locality to another, attributable mainly to inadequate transportation and refrigeration facilities. 2. Quality standards wer.e provided by the Itepartment of Sanitation but were meaningless in practice. The Army and Navy, however, provided close inspection of the milk v/hich they purchased. 3. The demand for fluid milk had increased enormously owing principally to the fact that the Arrry and Ifevy were purchasing in large amounts, and to the rapid rise in consumers* incomes particularly in and around areas where military projects were ■underway. The regulation designed to cope with this situation was issued on April 30, 19h3^ and had the follaving features: (a) It di-vided the Island into three price zones determined by studying the differentials between localities which had normally pre- a vailed. (b) A schedule of retail prices was provided for each zone, which made allowances for pasteurization, provision of containers, and delivery (c) On sales by producers to distributors, producers v;ere given a weighted average price computed monthly. This v/as calculated by the distributor by weighting the prices which he received in each of the zones by the quantity of milk which he sold in them, (d) A general report to the OPA was requjjred of all distributors showing the quantity of milk sold in each price zone. - ' i - ..rf .X i ■ i 3 ^ :i ■ I * y ^ 3 . / « 'I / y. '' /* r*- V* - 2h - f) It was recognized that this regulation v/as highly unorthodox, that it would provide producers with an incentive to divert their milk to those distributors who sold in high priced zones. The lack of trans- \ portation and refrigeration facilities was counted upon to minimize this diversion, but OPA recognized from the outset that a formal order to deal y^ith the diversion problem might ultimately be required. In' fact, the diversion of milk to high priced zones gradually became a serious problem and on September 15, 19U3j a restriction order was placed in effect which was designed to hold milk in the areas in which it had customarily been marketed. The defense of this regulation lies in examining its alternative, flat-pricing on an island-^dde basis. Such a regulation would have placed a heav^’’ burden upon consumers in those areas Y/here milk had al¬ ways -been cheap. Furthermore, no v/ar-born factors had altered the fundamental cost situation v\rhereby costs v;ere high on those dairies located near metropolitan areas v/here purchased dairy feed was used and where dairying y/as conducted as an organized operation, but whereby costs were low in rural sections y/here cattle simply roamed the range and where dairying was not ^stematically organized. The regulation covering locally produced fresh beef, issued January 1 , I9U3, had features quite as unusual as those embodied in the milk regulation. The following were the principal elements in the situation; 1. Puerto Rico had no live stock industry'" in the usual sense of the term. Rather, cattle are used extensively as work animals. Those that are not useful for this purpose or y;hich do not produce enough milk to satisfy their avner are sold for what they will bring. One cannot establish in general a cost of production associated with the supply of fresh beef i. - 25 - 2. Beef which is slaughtered, like milk, goes through primitive narketing channels. Cattle on the hoof are sold in the seller's fields* They are slaughtered in nothing more elaborate than an open shed. The slaughtered beef is sold at wholesale in no v/ell-defined carcass cuts. 3» Puerto Rico customarily depended upon the United States as a source of supply. When imports were reduced, the demand for locally produced beef increased enormously and prices rose rapidly, ii. The consumer in Puerto Rico does not recognize the extensive list of consumer cuts which are found in the States. Rather, with more or less common understanding but with considerable room for disagreement, the consumer buys tenderloin, round meat, stevr meat, or soup meat. The regulation set up to meet this extraordinary condition had the following features* 1. On cattle on the hoof, a maximum price of $5*00 per "arroba" was set for cows and oxen and $ 6,25 per "arroba” for other types of cattle. An "arroba" is a Spanish measure, being the live weight equivalent of 25 pounds of dressed meat. In practice the buyer and seller first reach an agreement by inspection that a given animal has a certain live v/eight and that it will yield a certain number of pounds of dressed meat. The "arroba" equivalent is then derived. It will be recognized that since the "arroba” equivalent did not typically depend upon objective factors but on the judgment of buyer and seller, the ceiling price of live cattle did little more than to define a point about which the jBrties could bargain. At wholesale a uniform price of 21 cents per pound v/as established. t Again, it v/as a matter of bargaining between the parties to determine what quality of meat was to be traded at this price. •(■u V .f‘ ' >4 ' X . .,,1 \ A . ! • • 'f 'i 'V i'? 'l ^ ^ * * ' ■ . < ’ '• vy/O'i^i,ii', ,v , _• •VI r;^ ^ ■~. '-wrrf i-.,- ' ^ : ^ { • . j *’ r v^ . rr^*' ■•,». 'v/ ’j,.j;-. ,, ,vf .^j ^ . , • V . •n ' V •# * .T. ■■ v‘ ^ I ■ U'rr h' ■-C ■ ■ ■ . 'k’i JJ t,. ,i . , . ••- J'fti vf' rc". ;“/)*V / - .! J'i :i 1. s t. > ; ■' •^; , ' > «■ « V‘|J : - VJ.' . ':j I 1 i ,'(■ V ti Ja •r.r * » fc'-* X ■ I-3 3 i - 26 - At retail, alternative schedules were provided. If a seller wished to differentiate tenderloin, round, stevf, and soup meat, dollars-and- cents ceilings for each of these grades was provided. If on the other hand he simply wanted to distinguish tenderloin, he was provided with an appropriate ceiling for this cut and a second ceiling to apply to all other cuts, whatever they might be. The retail schedules, like those noted above, provided a point around which buyer and seller could bargain with reference to the quality of the meat that changed hands. The defects of this regulation from the point of view of enforce¬ ability vrere well recognized, but nothing more exact could be provided in view of characteristics of the trade. Nevertheless, in cases of gross violation, the regulation could be enforced as indicated in a number of cases which were brought. Aside from legal enforceability, it is believed that the regulation was a considerable practicable achievement. In an econony in viiich practically every price could bo made the subject of negotiation, it was important to supply standards of equitability of charges vjhich would be ammunition in the hands of the seller or biyer, as the case might be, in trying to justify an asking or bid price. Several factors in the background make it v;orthvirhile to discuss price ceilings on coffee even though the regulation itself contains no unusual features. For a number of years prior to the war, the coffee industry'- in Puerto Rico had been declining, l/'nliile the product was of unusually fine quality, the high cost conditions which prevailed made competition with supplies from other sources unprofitable in the American market. Pro¬ gressively higher duties levied by European countries had discouraged shipments to these outlets. In order to alleviate this situation. < r - 27 - logislation was passed in Puerto Rico under viiich the entire supply was pooled and one part of it ims sold in overseas markets at aompetitive prices while the reniainder was sold in Puerto Rico at the much higher prices made possible by the limitation of the quantities alloQ^ted to that market. By 19h2, however, declines of production, attributable to crop failures on the one hand and to shortage of pickers at wages which the growers could afford to pay on the other, had left Puerto Rico v;ith supplies smaller than v/cre required by the home market alone. Prices rose rapidly. The basic issue before OpA in establishing prices was the extent to which the consumer was bound to underTO’itc the losses sustained by the industry, principally from natural causes, or furtner was obliged to permit fortuitous wartime demands to reverse a long term dovmward trend which the operations of a free market had brought about. The Agency based its case for the ceiling which was imposed on the fact that vrithout advancing prices to consumers in Puerto Rico greatly beyond levels which had prevailed before the war, it would be possible for producers to receive a much higher price on the average than they had ever known. Y 11 4 - 28 - over a period of time was made possible in the spring of 19^3^ when the FDA. agreed to a highly simplified schedule of ceiling prices on flours of various specifications, which gave the assurance to the baker or manufacturer that his most important cost item ’would be stable* T5XTILE PRODUCTS AND SHOES Textile Products and Shoes were originally covered by GMPR. Control hovrever, was little more than nominal. Since specifications for individ¬ ual items ’were changing constantly and since even brand identification was then the exception rather than the rule in Puerto Rico, the pricing standards provided by GI^/IPR vrere at most only superficially logical and at least were cumbersome to apply. Vvliile the trade characteristics in these products were in many respects similar to those in cases noted above, several unique problems were raised: 1. In both textile products and shoes Puerto Rico is prinarily a market for remnants, second^ and rejects. Brand items are the exception. The practice of setting price lines is not systematically follai’.'’ed. Except at the retail level, trading is frequently done in job lots* 2* Sources of supply in the States were much more variable than in the case of food products. The importers shopped around, for merchan¬ dise v/herevor they could got it, frequently from brokers and jobbers rather than fabricators. The possibility of esta’ " ishing the legitimacy of the export prices charged by merchants in the States was therefore greatly lessoned, 3* Goods imported vrere of the widest possible variety. In some cases the importers did not know precisely for ’what they had paid their money until they opened shipping cases. \ \ < I U« The style factor, which is intangible except as it is a function as cost, nevertheless, required some recognition. 5. Landed costs, even if they were legitimate, were subject to wide variation from shipment to d:iipment as routings, channels of pur¬ chase, and similar factors changed. 6. As in other cases pre'^/iously noted, the functions of merchants in Puerto Rico were not standardized. A given merchant might be an im¬ porter and at the same time sell both at wholesale and at retail. He might at one time confine his activities to one trade level and at another time to another trade level. 7 . On practically all goods sold in Puerto Rico, the merchant does not typically adhere to conventional markups. If he can get more, he gets more; if he can get less, he takes what he can get. In textile products and shoes these characteristics are especially pronounced, since in disposing of a job lot no cost attaches to the individual item and the merchant has no cost guidance to tell him v;hat he should receive. In these circumstances the only feasible regulation vra.s one to be painted v/ith broad strokes; the broad fields of textile products and shoes were divided into only a few categories into which individual items wo\ild fall, each category ?fith its appropriate set of markups. In view of the instability of costs, it v;ould have to be a cost-plus tj'pe of regulation. It v/ould have to cope -with the job lot problem. And, it v.^ould have to have special record-keeping provisions to offset, to some extent, the lack of enforceability of its substantive provisions. The Textile Regulation divided all textile products into three broad categories. In selling merchandise on which direct costs could be identified with individual items, ceiling prices were derived by adding nercentage markups at v/holesale and retail appropriate to the ( - 30 - category into ' -■*.“> n^i- act C--6: ^ -fti- ' ’f .’^^fitSJ $3^ * ^!' ■ \f, - l.'-i'J :/> '''iif} ^ --• # Vft*-* •‘'' * ^••s' ' ' .'-' :mm 11 A<^->5 :. .^.■?J’f.o*':at *ftlHl A .i jj __.'■ -A . «: ’ . “ttr % ^ ’ rtJ- '# . >v?5l; • . 'V'W'^' -• ■' * f i W^jr»‘X^» ’- :j 1 c ■ .'ir-;v^ I ^• '1 ^.v'i/.lj 'V 4^ I • 97^^ I^i-' :'' S* • .1. ’r^»M ♦%' ‘. fi [ ^*4^*- . ■ < nv .‘ ■ ^'' i’3T; .■‘Tl' ■ vr * i 1^/1^ M ^ ■*.* '•.' .:•!!;>;« *■■■ ■^* ■i -* .*^vif-,t :frr ■!:}t>-ii^■ ■-.¥'■ "- ' -■^' • '4. ;•“■» V • . '>4 ; . -.' Mrf *’-. ■: f .i.sv ,“ ‘■t? .''l^^(?| itJ^j^.d-r ’ll • ■/** ' . r-j ’-' f.Qr^f •«■ * *',c.*«tr fj '•.‘*Hi*'‘;| _’,.*» is • ■‘"V >i w'it '•I .'*; -^r^' ** '2#^ *% ■ Jf' ' I iV I* ■f J!t^i [ a, , ... * wit*iarccept for the few primary producers, margin control rather than over-all price control is the practicable plan. Except through a govern¬ ment supply program, it is not possible to stabilise acquisition costs to a degree which v/ould make the freeze type of regulation practicable. Standard foodstuffs can be flat-priced on a margin-control basis, and flat prices in this field are essential to control. 2. The isolation of Puerto Rico and its unavoidable dependence on the mainland for essentials makes it imperative for the government to plan in any emergency adequate stockpiles of essential foods and the immediate taking over of the entire supply program for essentials. 3. Puerto Rico consumers can be organized to give povrerful support to any price control needed. This is, in part, due to- their low income and desperate self-interest in'low prices. li. A price control organization can be staffed almost entirely from the island but should have a few mainland executives and specialists familiar ^Yith commodity trading. 5. Any Federal regulatory program in Puerto Rico must operate in Spanish if it ^s to be understood and supported by the great mass of small businessmen and their customers. < >. ■ > ' I,■■ '.i / ' ,T I , ■ '•.-: !' C'.-- V ■ ' », n ' >?*' . '■ ' . ■«- ' ' ' ' ^ •■* .'f.% ■ • ■ ..'wi liTi \> j,'.' A r ■''1^ ;■,./' vA;r ■•:4 5a''/'.' • . ■ ' ' •■ i(' . f ^ . .35 - VIRGIN ISLANDS INTRODUCTION Th© most important characteristic of the Virgin Islands economy pertinent to price control is the extraordinary dependence of the islands upon imports. Practically all foods important in the- consumer's budget, except meat, all clothing supplies except for minor craft ivork based on imported yarns, and all construction materials except sand are shipped in from outside. The principal sources of commodity imports normally are the conti¬ nental United States, the British Virgin Islands, Europe and South America, Foreign trade, except that from the British Virgin Islands, nas shut off or greatly reduced by the vjar. Normal trade routes and commercial connections nere disorganized. The nature of the marketing structure is to some extent unusual. The number of importers in the grocery trade has always been fevj. Dost important retailers are importers. They sell at retail on their ov'n account and at wholesale to hucksters. An organized wholesale market does not exist for most commodities. Normal markups tend to be relatively high, due in part no doubt to the combination of importing functions '1 th retail distribution in the same firms. The economic significance of price control in the Virgin Islands was to a certain extent, local. Commodity exports from the U, S. Virgin Islands are not large in terms of the magnitudes usually associated with inter-regional and international commerce. Price control in the U, S. Virgin Islands, however, had some foreign importance. A group of ' British, French, and Dutch Islands u'erc dependent on St. Thomas as a distribution center. The U. S. Virgin Islands are important as military bases and v;c-ro r • t I y 1 \ . ^ ■*3 36 - acquired from Denmark for this purpose in 1917. ^ considerable amount of military constructiai v;as undertaJcen in the islands during the 'var. A submarine base was developed in St. Thomas. Air bases were built in St. Thomas and St. Croix, Fortifications were intensified. For a time, the port of Charlotte .’Imalie v;as used as a point of trans-shipment of bauxite enroute from. Dutch Guiana to aluminum production centers in the United States and Canada. Price control of military supplies, such -as petroleum products and building supplies, v;as rji important function of the activities of the Office of Price Administration. Efficient Price Control in the Virgin Islands, therefore, helped to prevent an undue spiraling of the national debt. Social a.nd politica.1 values ’:ere also involved in the price program in the Virgin Islands. It was recognized that the citizens of the Virgin Islands are entitled to the same economic protection as tha,t accorded their fellow citizens on the mainland. For that reason our go^'ernment made every effort to preserve the morale and economic welfare oi the modest population of the Virgin Islands as part of our democrcatic ■/’ay of l.iving, PRICE RSGUL.TIONS The dependence of the U. S. Virgin Islands on imports of necessity influenced the price control program, (a) The greater part of price control activity had to bo concentrat¬ ed on the prices of commodities shipped in from outside sources, (b) The control of inflation in the Virgin Islands wens dependent fund-Tmc-ntally on the success of the price control program in Puerto Rico and the continental United States, The propinquity of sellers and the directness of their contacts with the Office of Price >.dministration simplified the problem of trade education with respect to the various price regulations. I ^•-.^ ^«-- .-i-*'. , JilW . s.^ri-o i - ( A.?, w rr’’Vi »' ■ V ■'« \ f - '■» ' ;?1 •".p: Pilf ■fe!a(;v ^hi-,’* ''■■.'i'rt#jttli*' ‘ II * I .'i'.* . I& ^ja,. ;aj /I* ' j; ■*■ ( ^ - -i. (f ;.{,/ ,i.’?.* . .. ^ ■* ♦** ,: t^i I , i. : I' W' i v'l 'l^'•f .tj. (• ■*4#^ ' -rf*'"' r)^\ ' ■ :■^ ■ - ^ J ■ ■■■'3 ' '•'j, i: -1 •••‘.A'VTi i ’ji' ‘ft 'f »/.. |&. i:.{. ,t V j ?V 'B .v' ; ,p'< I f A •• ' ■ ' -V " ■ . ,:, 4J^». .1? «# ' -t* ii-ir# ». •' 1 ':i ’ . *■’ • ' • :• ‘r': I ^ « fT* r f^fi^ ■ ->•» ■<: - -tyL fts* ‘'■'*m .s * > A'iu '1 '* 37 Relationships betv;een businessncn and the Office of Price Administrar- tion in the U, S. Virgin Islands vvcre on a highly personalized plane due to the small number and the compactness of sellers. Most lines of producers* goods and many lines of consumers* goods are handled by only a fevj concems. To some extent, this reduced the need for a large number of price regulations and enabled the Office of Price Administration to exercise its functions consistent \v'ith the preservation of individu^il variations present in the normal structures* Four major price regulations issued by the Office of Price Adminis¬ tration v;ere raa.de applicable in the IJ, S. Virgin Islands: (1) General Maximum Price Regulation, as amendedj (2) Maximum Price Regulation No, 201, as amended; (3) Revised Maximum Price Regulation No, 395, as ainended; (li) Maximum Price Regulation No, 395-A, as amended. In addition, a few of the continental price regulations covered sales in the Virgin Islands, notably certain of the regulations governing the prices of second-hand and used comoditics: 1, Revised Maximum Price Regulation 139 - covering sales or rental of used household mechanical refrigerators, 2, Maxirajm Price Regulation 372 - covering sales or rental of used domestic washing rnacliines, 3, Ma>:imum Price Regulation 30O - establish' g ma.:dmum prices for used metal coil and flat bedsprings. 4 , Maxj.mum Price Regulation h29 - establishing maximum prices for certain types of used consumer durable goods, 5, Revised Maximum Price Regulation l65 - covering services, 6, Revised Maximum Price Regulation 3Ul - establishing maximum prices for i;sed commercial vehicles. Most of the ma:cimum price regulations applica'nlc in the continental r. ( f. '^'M . •■■■rr »■;'.>. flS: -•'<■!*•!) :ffl" . t^'j s:^ WJ. .i» ■'{• • Wk» :tt4i , '•--•»>j , ■ :■■ ■ , .n^ ■■ >“■•' * v> )- *1 t 'fiJH 0* ‘ .4 J ■Vm I ‘ - 'IT '> f. »:. 'i-Vi. *• r.* f. ^Kii>ti^.,. - , -»'. i-p.^ iV*^f ; * * i f .T • . V * 4 ■J La , t % . • ^ ' < ■ '' ^ ; 11 V» 4' i- ^ ‘ . t' [I. ,' j* t » .».- <*i , . A ; • *• -U-yO, ' ' 4 ^ A ■• ■ -'-■. « ^ <*8.v.'Jr* 's y • ' 1 *»..'■; 'vi !■■• .. W* »f'wT» • • ' w ; w] * ! * . ' ■ ** ‘^ M * - 58 - United States, hovievor, did not extend to the Virgin Isl.ands. The develop¬ ment of the pattern of price control in the Vj.rgin Islands followed a somevjhat different trend. 1, General Maximum Price Regulation, as anended . The General Ilaxi- mura Price Regulation, freezing the prices of most non-agricultural coiTimoditics at the Llarch 19142 levels, ueas applicable to sales in the Virgin Islands on May 11, 19li2. Shortly thereafter, teffective June 26, 19i|2, the base date of price freeze luidor the General MaxLmun Price Reg\ilation ^7as changed to npril 10-May 10, 19li2, for the Virgin Islands in order to prevent a squeeze on importers' margins due to higher replace¬ ment costs of goods. This action was not sufficient to meet the needs of the Virgin Islands. Consequently, a technique of flexible- pricing respon- 3iv« , to variations in landed cost was developed along the lines of the Alaska regulation, Ilaoimum Price Regulation I 9 I;. The Virgin Islands regulation for imported commodities was termed Maximum Price Regulation No. 201 rnd became effective on August 17, I 9 I 42 . The General Maximum Price Reguls-tion had a constantly diminishing coverage in the Virgin Islands. The inportrnce of this regulation be¬ ing confined to a few locally produced articles and a few service rates including certain contract carrier rates. Its coverage in the Virgin Islands vans further reduced by the applicability on August 1, 19 hl 4 of Revrased Maximum Pince Regulation No. I 60 , which covered mnst services formerly under it. 2. Maximum Price Ref-aila tion Ho. 201, as amended . On August 17, 19h2, Maximum Price Regulation No. 201 governing the sales of most imported commodities became effective. The basic formula of this Regulation alloT,.Gd the seller to add to the direct cost of imported goods the dollars-and-cents markups obtained by him for the same or similar commodity in the thirty days prior to 1 39 - Pearl Harbor (November 7, 19Ul to December 6, The Regulation applied to any commodity for ’/jhich a maximum price had been established in the continental United States and v/hich '» 7 as not actually manufactured or produced in the Virgin Islands of the United States. Any seller offering a commodity for '.'hich his maximum price could not be determined in accordance v.’ith that formu].a u'as required to,apply to the Office of Price Administration for authorization of his price. Self-pricing rather than pricing by petition ivas^by far the more important of the met);ods established in the regulation. One advantage of this flexible method of pricing vas t'nat no serious price obstacle to tlie supplying of the Virgin Islands uas irposed during the critical months of the shipping shortage. A price freeze rd.ght have led to serious supply complications. Rigid dolldmum Rrice Regulation No. 201 ^vas amended to supersede all other regulations insofar as imported commodities xiere concerned. Section l/H-8,111 of the Regulation, as amended, read as follo\vs: 1 . (’•The provisions of this Mancimum Price Regulation No. 201 shall super¬ sede the provisions of aJLl other maxim'om price regulations, except T.’hero other maximum price regulations provide that notwithstanding Maximum Price Regulation No. 201 such other regulation shall be applicable in the Virgin Islands of the United States,") Costs ■were abnormally unstable during the period of the serious shipping shortage for a mimber of reasons: (l) Normrl. trade connections with the Continental United States wore broken. The Virgin Islands became abnormally dependent on Puerto Rico a;s an intermediate supply point. The landed costs of goods reaching the Virgin Islands from Puerto Rico arc normally higher, item by item, than those of arrivals direct from the mainland. r I C •S' i / I % r 40 - because extra wholesale margins and additional storage, ware¬ housing and transportation expenses are incurred in Puerto Rico, Goods imported from foreign countries are also landed at higher cost because of the peculiar nature of the customs laws applying to the Virgin Islands. Imported goods are taxed on a. straight 6% ad valorem basis in the Virgin Islands, whereas all of the continental tariffs apply in Puerto Rico, (2) Cost of goods T;hich continued to arrive from the mainland were higher-than-normal and uncertain. Normally, the Virgin Islands are principally dependent on traffic out of the port of Now York, but this traffic was seriously interrupted. Goods were shipped, instead, overland to Miajni or Pensaccla or Galveston and thence to the Virgin Islands, possibly by Wc?y of Puerto Rico rather th.an on a. through bill of lading, I.dami is as for from Charlotte Amalie, St, Thomas, as New York, K. Y. Those additional costs, although necessar;/’ in the procurement of supplies, wore nonetheless productive of price increancs, (3) Some of the customary features of export sales contracts were dropped and credit practices were changed, perhaps in violation of OPA regulations. The reasons for this are obvious. Many commercial connections with the United States v/ere lost, at least temporarily, and the Virgin Islands are so small and numerically unimportant that the continuance of export trade was not con¬ sidered to be of primary importance by most continental firms. The demand for goods within the continental domain was so great that there was little inducement to export. In addition to the disruption of normal transportation routes and methods, import¬ ers in the Virgin Islands v/ero definitely at the mercy of the continental exporter. - 41 - (U) War Risk and maritime risk rates -wero shifted from time to time. The entrance of the liar Shipping Administration into the inter- territorial field and the limitation of allorjablo -vvar risk costs I to WSA levels tended to stabilize and reduce costs. This feature of war risk insurance was not initially successful, however, in the Virgin Islands because many exporters were reluctant to take out YiSL open cargo policies. Binder contracts were difficult and e^ensive to procure, and Virgin Islands importers were too vjerk financially or too custom-bound to work out procedures for insuring their imports themselves. The illegality of including in prices any incurred war risk insurance costs in excess of ' iSA rates was moderately deflationa.ry, but resulted in a problem of cost absorption and mangin squeezes in the Virgin Islands. This problem vjas eliminated vjhen private insurance rates came into line with WSA rates. (5) The severance of steamer communications with the continent pro¬ duced, for a time, an abnorrrial reliance on schooner transportation. The critical supply situation in the fall and winter of 1942 ma.de it necessary to secure acirainistrativc relaxation of the freeze on schooner rates (Private Carriers) at the March or April lO-May 10 levels. The Office of Price Administration had to take a more liberal attitude toward rates for shipping to and from the con¬ tinent than among the Caribbean islands under the U. S. flag. Long distance schooner rates averaged about four times the steam¬ ship ra.tes for equivalent cargo space. Percentagewise, the sub¬ stitution of schooners meant an especially heavy increase in the landed cost of bulky low-valued goods. The reflection of such rates in the prices of high-valued goods of small bulk was modest. The importation of certain tpq^es of commodities was seriously I I V m i 42 - restricted by this substitution, (6) Neu marketing channels vjere 7Jorked out uithin the Virgin Islands. St, Thomas importers v.'cre aggrosive in obtaining cargo space. The commercial relations botv;eon St, Croix and St, Thomas are not extensive normally, but St. Croix vjas placed in a position of abnormal dependence on St. Thomas. Increases in the landed costs of goods reaching St, Croix naturally reflected the change in marketing channels. The earliest price activity in the Virgin Islands consisted in maJeing MPR 201 a. workable regulation. There was some scepticism about a cost- plus regulation of a very comprehensive cha.ractcr, such as ICPR 201 but through a series of educational measures, a high degree of compliance was attained. The most important revision of pricing methods under Ilaximum Price Regulation No. 201 vnas brought about by Amendment 5, effective February 9, 19h3, which delegated to the Territorial Director the aiithority to issue price orders to firms selling products which wore new to them and possibly to the economy as a whole or for v;hich they lacked necessary records. A groat many individual schedules of considerable significance were issued under this authority. V.liile these schedules applied to particular firms rather than the industry as a vjhole, the number of firms in a given field is sometimes so small that the schedule for a single firm actually controlled the price of the article in the Virgin Islands, Continuing emphasis was placed on the tightening of control under liPR 201 vjith respect to: (a) Prohibition of the pyramiding of horizontal markups, (b) Basing "in-line" dollars-and-cents markups for newcomers upon the markups of sellers importing and distributing the bulk of the supply. Tills Discouroged poor buying. / ■< ./ 'f itj j, 1 i ^ 1 ‘■., - V it - .. ( ■•'. 'i¥-^ V ’ - v^ 43 (c) Emplojrin^: the use of fornuln markups b;/ categories on prices for new sellers and for sellers who could not properly establish prices. One of the most significant accomplishments of this period ^vas a comprehensive and exhaustive study of the feasibility of rewriting the Grocery Regulations to use percentage rather than dollers-and-cents markups. The proposal to shift to a percentage markup regule. tion v/as suggested by the Regional Office, since elsewhere percentage markups had resulted in simpler and more uniform pricing, How'ever, facts revealed that in the Virgin Islands percentage markups would have offered an incentive to increase indirect and consequently more costly importing from Puerto Rico, and would, because of the merchants’ long-time familiarity with the pricing technique of IIPR 201, have created enforcement problems that might have extended well into the Reconversion Period, 3, Revised Maximum Price Regulation 395j as amended . Maximiim Price Regulation 39^^ was the culmination of the efforts of the Price Division to improve existing controls under the General Maximum Price Regulation and IIPR 201. Prices based on pre-Pcarl Harbor dollars-and-cents markups were gradually replaced by specific price ceilings and percentage markups. Attention was also given to the relief of trade groups squeezed by the April■10-May 10, 19U2 ceilings under the GMPR. Each trade or community presented a series of problems. Extensive price, cost and profit studies v;ore made and lengthy consultations held 7;ith Cooperating Committaes of the Grocery, Dry Goods and Apparel Trades, the St. Croix Livestock Association, Butchers, Poultry Raisers, Tiro DeaJ.ers, Representatives of Sellers of Services, etc., prior to issuance of specific price regulations devised to fit the characteristics of the particular industry. During the period July 1914^ to June 19h'^, the Price Division continued to direct its attention toward the strengthening of existing controls, A c L- 4 > r. / /. . / .1 44 - najor phase of the price program v:as the conducting of detailed surveys of cost structTire of privately imported grocery commodities cssentirJ- to the cost-of-living in the Virgin Islands, in order to determine the feasi¬ bility of replacing pre-Pearl Harbor markups for these co:nmodities by the institution of flat dollars-and-cents ceilings under MPR 395. Hitherto, because of supply and transportation difficulties, only grocery commodities imported and distributed by the Office of Supply (formerly the Office of Distribution) v/ero placed under flat ceilings. These surveys revealed that a large number of privately imported grocery commodities rare purchased at the manufacturer’s level of prices and tha^t the direct cost uas fairly stable after steamer transportation became available. The program of flat pricing privately imported grocer:/ items essential to the cost of living in the Virgin Islands vvas launched, It the outset, there was considerable opposition from a smaill group v’ho e'ere unwilling to sacrifice t}icir individual pre-Pearl Harbor markups for uniforru prices. This opposition was, however, partly overcome and a great majority of merchants becane in favor of flat prices. The establishment of specific ceilings elimin- atea the store-to-store variations in retail prices because they were precise, simple and understandable to both buyer and sel..er and simpli¬ fied enforcement. Maximum Price Regulation 395 was revised on May 23, 19ii5 in order to delete certain sections because the material therein was repetitious; and to rearrange various sections in order to group similar commodities. The types of pruce control embodied in MPR 395^ as amended, followed three patterns: (a) Specific dollars-.and-cents prices; "(b) Cost plus per cent,age markups; (c) Cost plus doll.'irs-and-cents markups. Maximum Price Regulation Ho. 395-A, as amended. Maximum Price ■s , H U' , , -v I > vt ♦ i*ij •■‘li -W ' r...i 'i * •‘•.C ■ :'M V. fc . I- 1 -”'' >t ■ ..••J"/- -jj > • f< ■■ ^ ^ ^St' :A' •-* ■■*'> ^■' ^ .#4- •i^P l I'-JiCs •' ? ‘1 ♦‘T '.-I Cft .' 4 tat -•: .-r5 / * '** '.'r‘i 45 - Regulation No, 395-A, as amended, originally effective February 11, 19UU, established dollars-and-cents ceiling prices for run produced in the Virgin Islands and shipped to the continental United States. This regulation helped to stabilize the rum market in the continental United States, 5, Export Price Control in the U, S, Virgin Islands , Amendment 7 to Iia>:imun Price Regulation No. 201 and Tmendnent 13 to Ilaximum Price Regul¬ ation No. 395 j effective February 20, 19UU, established an equitable procedure for determining export prices of commodities regardless of where the title passed. The British Virgin Islands, Anguilla and the Fronch- Dutch island of St, I'.iartin, especially are closely connected in commerce ■with the United States Virgin Islands, These amendments promoted the stability of prices in the United States Virgin Islands, eliminated undue price advantages grovdng from unregulated export sales and prevented drains of needed commodities due to artificial price differentials, BUSINESS TRENDS - June 1916 Dry goods stores in the Virgin Islands in the sumr.ier of 19^5 ex¬ perienced a'business decline due to temporary unemplc;>’T.ient which reduced purchasing power, I'llth the cessation of military projects and the with- dra'wal of the ‘’.Yorks Project Administration of the Federal 'Yorks Agency, employment was eliminated for approximately 1^00 employables despite the induction of hundreds of Virgin Islanders into the /rmed Forces, The sharp decline in rum sales furth.er a.ggravatcd the situation. In St, Croix there was considerable uncmplojmicnt until the cane-harvesting season vias opened by the Virgin Islands Company late in January.’', "v^hich continued vjell into the month of Hay. That island experienced an unusually successful h-'rvesting season. Despite this taaporary lag in employment vjhich caused a reduction in buying power there were no business failures in the Virgin Islands, On r c W.'S . 46 the contrary, an appreciable number of noTi/ firms were established during the wartime period, DEVELQPLIENTS AFTER V-J DAY Soon after V-J Day, sei'eral grocery commodities formerly imported exclusively by the Office of Supply vjere returned to private trade. The stage was set for the liquidation of the entire emergency food program in the Virgin Islands and the return of all food items to private inrporta^ tionv For several months prior to the ending of hostilities in August 19U^, Reconversion Pricing was the main theme of OPA, The Virgin Islands, how¬ ever, were not faced with the herculecin task of reviewing thousands'of ceiling prices for all ma.jor reconversion industries, as was the experience / in the National Office, There v;as reconversion of a sort in the local rum m-:inufacturing industry, duo to a shrinka.go of wartime markets. During the war, local run manufacturers made bonanza profits on export sales to the continental United States. The peak in production was attained sometime daring the middle of 19^5. On the heels of V-J Day, there was a sharp decline in export sales and by the end of the year exports had slurped completely. In order to bolster the. sagging rum industry, local rum manufacturers immediately turned their attention to now fields. Among these were tho blending of perfume compounds for export to the mainland. Most of the alcohol previously used in the manufacture of rum vjas divert¬ ed to the production of denatured alcohol or ethyl alcohol for use in tho manufacture of perfume compound, Tho manufacture of cordials, wines, and gin Was also undertaken, as well as the redevelopmnt of the Bay Run industry''. Considerable time was devoted to anaJLysing the cost structure of these nev! industries and recommending fair and equitable prices for the products. /; • I ^ V %v ► n;- ,*-/ V •f ‘ V / > i , : 'iA * 4 ; • - ^ ixxty^b .^ '■^ ■, • ' '^-v . rv-*.‘^ 4;-. ' ^ * iX‘. <05 4 '• C I % I 0- \ « 47 - A recommendation -vvas made to the Hational Office for suspension of » pricG control in the Virgin Islands on imported or locally manufactured distilled spirits and wines, except imported American and foreign wiskeys. Controls had already been lifted in the continental United States and Puerto Rico, and the mm industry in the Virgin Islands was desirous of knowing why suspension was not granted for the Virgin Islands. During the I 9 U 6 sugar cane harvesting season in the island of St, Croljr, agricultural wages were increased y^% above the 19U2 level. This action exerted strong pressure on the economy of that island and resulted in upward revisions of ceilings for charcoal, fluid milk, poultry, cattle (liveweight), and locally produced, non-foderally inspected fresh beef and veal. Charcoal producers were the first to petition for an increase in price. This increase v?as grrntod by ;u.icndnont 21 to RJPR 395. Subse¬ quently, milk producers, the poultry and cattle industry and local butchers petitioned for adjustment in order to compensate for the in¬ crease of labor costs. During April 19^6, the suspension from price control in the Virgin Islands of the service of blending or bottling distilled spirits or wines which are cxer.pt from price control under RSO 12? was recommended. The recommendation was in keeping with similar action taken on the main¬ land to exempt from price control services in connection with commodities no longer subject to price control. The suspension of this service in the Virgin Islands was recommended in order to provide business and employment to a number of persons in connection mth the blending and bottling of distilled spirits suspended from control. During the hiatus, price control in the Virgin Islands was adminis¬ tered by the loccol government. All OPA ceilings in force as of June 30th It*-. I nir-* 7 •’n ZVJB ._ .1 c-.. I S’! I r .a ■Hi V.'.'. iflvV-;- ♦ *0’^ ;r«st o-*"^'-.«T;'’Vfip^- :. r- rr') I , ■ J 'If * • . ’ ‘ ^ (%fdO ' IvaoJ ■ ^ c4i' - “ — ‘ fc ^' tf7 o'-i-- o i ■ -v. ■'.-•.noiira^-j.'T : o> - ai ‘ " •f • . ' nl^JlV ,> J .1 • ''•'.'ni;.- >1 .'iv*rf/ -r*^ ‘ ~: 7k * ■' ' '.'-• ',.■ * '. ‘ ' ' V'i'i'i *'^'1 f- , -M !• f J : I ! «k i, « -4 / ■ 48 - v;ere preserved by the local Price Control Cornnission in the islands of St. Thomas and St, Croix, Slight increases, ho’.vever, were registered for non-federally inspected local neat, cattle liveweight, eggs, bulk wheat flour, table butter, codfish and Santo Domingo whole and cracked corn. In a majority of instances, increases were only to the extent of passing on doll^ar-and-cent increases at their supplier’s level. Business in general was sympathetic toward price control, THE hi:;/ ACT (19I46) b'ith the restoration of controls on July 2o, CfPA was left yath a minor role in the stabilization program. The decontrol of neat, grain, dairy products and poultry until August 20, pending a decision of the Decontrol Board seriously crippled the flat pricing program in the Virgin Islands, I.-oreover, the provisions of Section 2 (t) of the new Act necessitated revisions in former flat pricing teclmiques, '’In-line'* pricing wa,s out and its substitute was "average" pricing. Surveys were conducted in the iala.nds of St, Thomas and St. Croix for the purpose of gathering information required in the adjustment of dollar-and-cent prices to guarantee merchants the percentage markups enjoyed on Ilarch 31 commodities on which price increases were granted at the manufa.cturer's level, fJLso, a survey of commodities under IvIPR 201 on yhich price increases v;orc granted at the manufacturer's level was undcrtal.Jiae .-72 *Kift' ■ .I •h ;> »ir»ili r*. <■ • *'t*-«r . Ai 'vavrtt« * iZflh 41} .p^-titfr , # itv. .i-n* rr ,r tj ' f't, * ilrril M 'jO r4 <^ V) \ij- 1c nc^j - i i ^ ■'■■: VJ.I 4 •* * .' - « I * w >%|. iMrf -•0d>, 'i# - • Im '.n;.: .; f- '.■.5'%' u^rrn tv #*»:/fv.-; 'ihfji.'? ' iil ttt '♦ vi.1 • i.. f^;; rx^u^ * '''«(?&' ■ • '- 't? ■ f/ ,fff ^ 3 .«> - . ftrli , ijftil* .•' .4 'i*' J-'tT- ;. «.• ’h t-rF ^ . "ft H tik. ' if • I .. * ' ,‘'i * %• Jn^vumil PM -■ -. t titliiiilPjllf >•■>. Vi ■»-'•’ : '.Ki, 'jli ij ^ - *. • ffi* -.'.t .b- ir V ■•' . Tftt >1^ -Vfk ^'iisk !>• »I ' ‘j. •I'O SI t V*^'- *■ *.-■ rrV-T'. ■ V'/ ’ ^ IT ' '■ i •V#, . *1MV♦'>w■i4t-iU^;J >.;*<*■»' if ^ , v. . i:.'- 'f( •>! *.- .•(•',v--V“’*^4*rW2 t I- y»-t tfl. €r%.i|J'r.flmp^ ■ in . - ’ i: •' - ^ ■♦• ■: ? fV^\i • iV ..* * V t*' ' ''»*** ’ ^' 19e6, in establishing doll.ir- and-cent prices, coupled ivith shifting and unstable sources of supply, made the tasks an interesting but tine-consiiming one. Under the former Act, if a section of Virgin Islands importers obtained supplies from the wholesaler-jobber level in the continental United States or Puerto Rico, rjid a representative group of importers purchased from the manufacturer's level sufficient supplies to adequately meet the demand, prices ncre vsstr.blishcd based on costs at the lo’.vest or most economical source ci supply.- Under the Nev/ Act, this procedure was no longer possible. In establishing prices for the trade, the average current cost of acquisition of a commodity had to be computed. Bread - An increase in bread prices xvas thu first major problem. Sharp advances in flour prices on the mainland with pass-throughc at the whole¬ sale and retail levels justified an upward revision of broad prices in the Vipgin Islands, Consc-quenUy, an increase of one cent on loaves weighing 1 to 2 pounds, txvo cents on loaves weighing t-vo pounds, and an increase of one cent for each additional pound on loaves "vvoighing over 2 pounds together with a one cent increase per dozen rolls as stipulated by Ancndr.iont 9 to RSR I 48 was permitted local bakers, effective October 1, I9U6. Meat - Effective September 9j 19U 6 , neat prices in the Virgin Islands v/orc rolled back to their Juno 30 levels. This action brought a wave of protest from the St. Croix Livv.stock Association, Approximately 90^ of the island's ca.ttle raisers are members of this Association and they control of the available cattle supply in St, Croix. The Livestock Association processes cattle through the St. Oroix Abattoir for ship¬ ment to Puerto Rico and St. Thomas and sell cattle te local butchers. The Association refused to return to former livcv;eight ceilings al¬ though no request for an increase in price was made. Consequently, - .M' m n-Vi r,> ?■ ^.^4i; f/?-*** v iV' ‘j- ■ ^ • i ■■» *> '< . .. <^ry\'r xry ^ ^ ' ; m-U - • ■. ^■'‘^ * < ifi Tik>^ r ■■ t i*-»ni m m 1 Mi/ « ««'>T V ^1; ,' •'.’* i • \ . f •J»i. * " 4 ‘ .V/I '1, . :;i : -'-i I % -.f .v-.v^^f-t-, wci f f(i fpj j** {■ ■■■’ • t - ># «*;♦' '# TMl- II .n "y'^t .-jV^KI'; ,. ♦ ■ *►■# • ‘fM- ' ■' ■ • '.. 'A* 1# 'TaK •v ' . ... -rJ-.- . ■ .*ff ■ • ’ w** * '*^'-« >'r tl-i ■ *•> '.WiL'V', ^ ^.'Cl ••'JJ • '' .♦M / V- = « «!l 'W • s** ■» w • ♦ ,li • w - ' i. ]J t r«f' r •^J w,> % . '»•< 'f - ' #.■ .v.'ii" ”?' '," ■■ ' ‘^^--'i ■ •■'.. . ( ■'. ■ > V ■t' • X. ^ . 5*. > -HK ■* » ' * ' * ’ ^ < ' ,«»4‘ BM: . t . . ' - ,1. ^. s . .1*1 **• < *' t* /-■ 1- ■' *siT .: i hi tf :<• % • O'-' >i^,Tt .-., ■ •.^' J - •, < • - ^ f *. W‘^'t « • f t .^*4 t * - ’ 'i£> : •twV* * . •• 1.» ^4 ►;.'*< . ‘'^ •> f t»♦ % .'. *' I t*' *it« If* ♦ * I gKU*^*7 'C* l.-''■♦^, ■_"i '# «*4 ‘■:‘ ^' f •»•; 50 consimors and public institutions experienced 9 neatless days, after Ttfhich tcnpers reached the breaking point. On Ssptonber 18, representatives of the St. Croix Livestock Associ¬ ation conferred with OPA officials, at which tine nsnbers presented strong and convincing arguncnts in justification of an increase of 1-1/2 cents per pound liveweight, Fornerly, cattle sold to local butchers yjore subsidized to the extent of 1-1/2 cents per pound. However, with in¬ creased labor and natorial costs affecting the operation of the Abattoir, severe and prolonged drought conditions which appreciably reduced the weights of narkctable cattle necessitated the discontinuance of the subsidy. After a careful conalysis of th;?. industry, their requested liveweight price 'was granted and butchers' prices for non-fodcrally inspected neat v.’ere revised upv;ard to corgoens-ate for the liveweight :ji- croase. Other coranodities - Effective August 30, 19^6, gasoline, kerosene and diesel oil advanced one cent per gallon at the wholesale level, vjith a resultant increase at the retail level in the Virgin Islands, Kral't and SordcB Cheese advanced fron a retail price of 50 cents per pound on June 30th to 70 cents per po’ond, with Anorican Cheddar and Swiss retailing at ^1^0,72 and ^0,85 per pound, respectively. Eggs, irrespective of grade advance to ‘30,08 each in St, Thonas and to $1.00 Xjer dozen in St. Croix. THE BEGINNING OF THE EHD The President's announcenent on the evening of October litth that effective October l$th, livestock and food and feed products therefrom would be removed from price control, followed by the rapid decontrol of all foods and beverages with the exception of sugar, com. s^Tup, .•'nd molasses synops and rough and milled rice resulted in a. co.mplete collapse of the flat pricing program. / \ r 0 I ■» • y !> • • i .1 *a * 1 \ \ 1 .«j 51 - A survey had been corrpletod for the purpose of establishing percent¬ age multipliers on radios and hardvvarc items. Shortly thereafter, radios and hardware rert; dacontrolled. The decontrol of livestock ajid its products rJid practically all foods and beverages resulted in sharp increases in the price level. This unexpected and sudden removal of controls had serious effects cn the e'conony in the Virgin Islands, The laboring nan v.'ho looked for- vjard to a better standard of living on the ^2,[i0 a day minimum rhich the new public works program guarantees, has seen his real wages diminish daily, THE RETURN TO A FTtEE ECONOM' On November 9th, after five years of wartime controls. President Truman in a s’.veeping move terminated price controls on everything except sugar, syrups, rice and rents. Controls in the Virgin Islands, of course, are limited to sugar, syrups, and rice, inasmuch as federal rent controls v;cre not extended to these islands. The President's momentous decision was not predicated upon the equalization of supply and demand - the latter far exceeds the former. The return to a free econom.y has resulted in spectacular rises in the prices of several conrrodities in the Virgin Islands, and further in¬ creases are anticipated, Exarnple: lard which had been controlled at 2h cents per pound leaped to 68 cents: table butter (Danish), formerly 9$ cents soared to Ol.!^ in one establisl-iment; red beans, fonierly 18 cents per pound jumped to 23 cents; bacon, forrrcrly 99 cents per pound advanced to 60 cents, i’/hile some prices have reached the stratosphere, others have increased modestly. Recession is bound to follow sooner or later, Tl';e present sellers' market vjhich exists in the Virgin Islands is expected to continue for quite some tir.ic. V *<*' V Jl \ f*1 f I, .1 •. ( ■- . •. -r., , 4 I n • 'c f A -• ■- ’tb! . 'W t<<^. ■'. n Vi V 'll ^ r '■. ' • I " .r as ■»*« »t el 52 - CONCLUSION In spite of adverse criticism nnd in spite of nistalces made by the i.goncy, Price Control made a lasting contribution to the Virgin Islands, The Virgin Islands have derived great benefits from the institution of federal price controls. Aside from curbing inflationary tendencies in these islands vjliich care at the end of the line and must rely cslmost solely upon imports for their existence. Price Control has been re¬ sponsibly for social and political advances in the Virgin Isl.snds. People in all walks of life wore avaikoned from their apathy to community affairs and were brought together for the first tine to discuss vital problems affecting their community, and to participate in the functioning of price control. They served on price boards, as price panel members, community service monbors, etc, Moreover, the program made consumers price conscious and in the post-war world many of then will bo able to realize consumers' surplus by being aJLcrt, In general, being a people's program. Price Control brought democracy in action to»the Virgin Islands, The OPA also served to improve local business methods, heretofore archaic in many respects. It taught the majority of business establish¬ ments, which previously kept onl.y sketchy records, and in most cases none at all, hov; to prep.are and preserve records and to purchase from economical sources of supply. \ J HI m. m . ' -fa Vi . .• '•» I il 52 - CQHCLUSIOK In spite Ox adverse criticism ;ind in spite of nistalces made by the /.{Tone:/, ' Price Control made a lasting contribution to the Virgin Islands, The Virgin Islands have derived great benefits from the institution of federal price controls. Aside from curbing inflationary tendencies in these islands vdiich are at the end of the line and must rely almost solely upon imports for their existence, Price Control has been re- spnsibly for social and political advances in the Virgin Isl.ands, People in all walks of life wore awakened from their apathy to community affairs and T/ere brought together for the first tine to discuss vital problems affecting their community, and to participate in the functioning of price control. They served on price boards, as price panel members, community service rrenbors, etc, Moreover, the program made consumers price conscious and in the post-v/ar world many of then will bo able to realize consumers' surplus by being 'iLcrt, In general, being a people's program. Price Control brought democracy in action to the Virgin Islands, Tho OPA also served to Improve local business methods, heretofore archaic in many respects. It taught the majority of business establish¬ ments, which previously kept onl.y sketchy records, and in most cases none at all, hov; to prepare and preserve records and to purchase from economical sources of supply. " f ire'll! i • i t. * .. (I 53 AUSKA lUTRODUGTION There are reasons, both geographical and economic, why the building of an OPA price structure for the Territory presented unique and difficult problems. Geographically, Alaska is a big territory^ Its ^06, 000 square miles make it but little less than one-fifth the area of continental United States. In this vast territory live a relatively fev/ people. The census of 1939 gave the number as 72 , 000 — of v/hich approximately half were white. The best estimates for the peak v/ar years set the civilian population alone at 100,000. It is useless to even try to estimate the size of the militar;.^ population over this same peak period, which period encompassed aLnost the entire four and one-half years of OPA operations in Alaska. An exarp.ple of how population figures were upset and s^vollen during these years is to be seen in Juneau’s graph. Alaska’s capitol, and largest city before the war, with a population of approximately 5>000 in 1939 — its population reached a figure of between 8,000 and 9 , 000 at the height of war-time activity in Alaska. Most of Alaska’s population has been concentrated in and around four¬ teen major communities, several of v;hich xrere and still are adjacent to large military and naval installations — presenting problems not to be found elsev;here in the country. Added to this situation vxas the further inflationary factor that Alaska itself was a crjtical war zone, necessitat¬ ing the expenditure of millions of dollars monthly for defense projects. So, as can readily be seen, Alaska’s consumer purchasing power during OPA’s tenure, 19 l .|2 through I 9 I 46 , was at an all time high in the history of the Territory. Thus the inflation potential with which OPA had to deal was tremendous. Procurement of goods and commodities to supply the demand of con- □ . ‘-S’. fi ^ >>Jim ‘-r ^j.n.'kJ-, .»^.-i‘v v.t, ia .• ta^u, ,':;iili!-.'ov»M» * t:*; 14«| ifr'i-tiJ I..: t.l ,**.® 1 4 4 .. - * ^ >: ,-«r - .0? )jft» ^ ■ .♦X.'V •“ lit.. ';j »-11 ♦ -id? «| —• f. TTfN-'t :«a «^l i ■*j\iv t'^AjlOt' •'’'.• ' :■ »*W|I ‘T -A|iii|it'’'ji #•' I i«j[ • • * I, t * • »#dJ * « -•*’ ( ii-t -'Vi*- ( ^i*'- « ' Mi* 7010 ^ i ■ 0,>' ■ ‘ ■. i. . . A* I M f|^^/ft•.f^ M I*. • *» * W I -**>»# hIU It ■ 1 . •• .1^— I*. %lf:»fW«vf3 ‘-* trrvt^i|l»t‘ V I \ *r4 ftolf ^ -an . ‘t*»r *^.lfiwt • » *r'*> • b<< ^ » 1 »*i*i *d.^iii|.i4lir -u ' \ r . > 4r '- a v *>418 '-‘^ *- V.» ,«T» • ‘ «•? . .i'-'’ tf: lr!j V/i 3# * * ’ %.'''/^' \ 9 ^ ^.Ort f /<•>■}■<)(*■ , .**'•• ■•- 1 > - ,^. ^ • ■ ' ■ .‘m* ' ■ ‘ ‘. ..J' •'r^ ■*.' triM -•‘i;c4ie f 4 ^ ♦■ * ■ bM i I . -'t 'hill ' • n»*4 :-V kMi» ■43 ( 4 • t T't‘ .'»*♦' «K k I** • N A lU.'' 55 - brought on by sheer geography and the seasons. In the farther reaches of the Aleutian Islands, in the Bristol Bay and Sev/ard Peninsula areas, in the entire northern extremity of the Territory extending from the Bering Sea to Point Barrow.also in the interior reached only by the great inland rivers, the Kuskokwin and Yukon, these unique problems are ever present. In these regions only two or three boats each-year can be counted upon to bring in the full year’s supply of merchandise and this must be done during the tv;o or three months of late summer and early fall open v/ater. This short shipping season is further complicated by the t necessity of lightering shipments from ship roadsteads to beach at all points north of the Aleutian Islands, and transhipping inland by barge, small boat or river steamer in many instances. Stores in these regions are ,by midsummer building up their stockpiles of food and other necessi- ties which must last the surrounding trading areas until navigation opens again the follovring summer. This means that for these stores there is a single annual turn-over of goods, the economic drawback being that the merchant has to maintain himself within this economy at the added cost xJ * of invested funds lying stagnant for long periods. The customarily high transportation costs reflected in goods shipped to Alaska, ivith the second factor of slow turnovers in many areas, are not the only items which contribute to the higher cost of doing business in Alaska, 'Pages, for instance, liave always been abnormally high in the Territory, Fuel is higher too, and, because of the climate in all but the southeastern and some gulf areas, used much more extensively than it is in the States. In only a fev/ sections of the Territory is coal produced in sufficient amounts to meet the fuel needs. This means that oil, pro¬ duced outside, is Alaska’s chief fuel. This must be brought in by ocean tankers and steamers, even to the many isolated sections where it has to y: j •/ . •. . • I- If'T'S f V. •- V i . t ■ u K. Wik' 56 be delivered in big drums and transhipped from ocean steamer to river boat. To digress for a moment, one of the more famous landmarks of A].a ska, as seen from the air, are the mountainous piles of empty oil drums sur¬ rounding these isolated trading posts and communitios. As they accumu¬ late they are put to unique usage by the inhabitants of these areas..,, they are utilized as stoves, as foundations for board sidewalks over the muddy tundra v/astelands upon v/hich so many of Alaska's far-north comrauni- ties are built, and even pontoons for barges or to float buildings from one shore to another. But to return to the subject of higher cost of doing business in Alaska — v/hether figured separately or together, almost every item which comes under the head of "overhead" and general operating expense, and must therefore be covered in the retailors' markup, is higher in Alaska, Not only is it higher in Alaska than it is in continental United States, but it varies even among Alaska tovms, according to their distances frori the source of supply and unloading point and from each other. It is need¬ less to point out that all of these factors had to bo taken into consider¬ ation in the building of a price structure that v;ould fit the wide diver¬ gences in even the peacetime economic conditions of the different sections of Alaska, Moreover, the v/ar itself brought an increase in both external and internal costs of operating retail stores in the Territory, In the s’mmor of 1942, when OPA v/as just beginning to take shape, v;ar risk insurance rates ranged in cost from 5%^^ of the cargo value in Southeastern Alaska to as high as 18^ in some of the more remote areas, in which v/ar hazards v/cre greater. Even prior to the first indication of war v/ith Japan, Alaska was dealt a stiff body blow by the Maritime Commission, which imposed a . I ,y,. , / . t \ { i I \ . 1 / \ \ - 57 - 45^ surcharge on the already high cost of getting goods into the Terri¬ tory. Fortimately, through the intervention of Alaska’s Governor, this rate ims later greatly reduced. Otherwise this would have boon a vory costly item involved in Alaska's base period price picture -- that of November 1941 preceding Pearl Harbor. '.Tagcs for freight handlers and all types of labor, under the stimulus of competition for manpower for defense projects, rose to new heights. And, as the manpo\vor shortage increased, it became necessary for the transportation companies to hire inexperienced men as handlers of freight both on the boats and at the various ports of entry. This resulted in lanusual losses from breakage, spoilage, and pilferage. The necessity of giving priority to shipments of material consigned to the Army and llavy and to defense contractors resulted fre¬ quently in retailor shipments being left on the docks for v/eoks at a time, vdth resultant losses from further spoilage of merchandise. VOien 'TSA took over all shipping to Alaska, there v/as a tightening up of the processing of claims for damages or losses in transit, and this delay became an added charge to the overhead of the Alaskan merchant. The resultant picture, was, therefore, that of rcto.il merchandising in Alaska being on an extremely high cost basis. And, in terms of vrrit- ing regulations and setting flat prices for Alaska, it meant the CPA Price Division had to take into consideration many more price factors than did any Price Division operation in any OPA district in mainland United States or in the other Territories. Although these conditions covered primarily increased costs to the retailer on goods shipped into the Territory, the cost situation in regard to locally produced goods was not dissimilar. The prices of most of these commodities depended on the price of others which \vorc shipped in. For instance, the cost of pro¬ ducing milk v/as dependent on the cost of hay and feed, which, for the most •• -. '-ii''. VA- K:" •' . T'/' ' I ' u ..' ' '■■■ V'\ ff • 1 - ' » ' t ^ '‘1 ' ■■; 4 r'.' r.;:i ’J' " y* V ' '■'^ ’■'» . ' If'' i- •• I'l i I ** , :U . t' I V, '‘T..;»;jiV,'' .'. '*V- K ' ► T > ' ' /■•'If* i' • ? > <• V' ■'*’ vV-v- ■'*• • ' ■ * ' X v.C •'.<>.4 rr:> ■ ,v *% ..■fi'. ./'n, 58 part, came fron outsido the Territory. LilccTTiso the cost of consmor services of all typos v/as dependent to o. significant degree on the cost of supplies and equipment shipped in to them, as v;ell as on zooming labor costs. Although these mo.ny factors vere knorm to bo responsible for the high cost of lix’-ing and doing business in Alaska, the extent to which each in¬ dividual factor affected the overall cost was not dofinitoly knoxvn at the time OPA came into the picture. In other v/ords, although it was well recog¬ nized that there wore special difficulties confronting the Alaska merchant, no actual analysis of operating costs was available. No economic studios of the Territory had been made. Adequate records wore practically non¬ existent, It was therefore necessary for the Price Division of the Territorial OPA office to start literally from scratch. It not only had to build a price structure suited to varying geographical and economic conditions, but it had to make the analysis on which that structure must be -built if it v;oro to have stability and strength. Elsewhere OPA could rely on statistics already gathered and tabulated, for in the States this econaaic study had alres.dy been m.ade. Since 1914, comprehensive and regular surveys made by the Bureau of Labor Statistics had amassed the in¬ formation on which price regulations could safol-y be predicated throughout the country. THE ADVENT OF GHPR AND VJIIY IT FAILED TO SERVE ALASILl Before the initial Alaska price job of an economic survey was even begun, the General Maximum Price Regulation vj-as promulgated a.nd its provisions ex¬ tended to the Territory of Ala,ska, '.Tith even the limited insiglrt the Alaska office had into the complete oconoraic picture in the Territory, it v/as ap¬ parent that G^'IPR was completely inadequate as a basic regulation for Alaska. Under it, the northern or "frcozc-up" section of the Territory, whose economic complexities have been described to some length in a previous > ‘ fj ' « r^' H fi 59 - . paragraph, v/crc as much subject to its provisions as the ITov/ York Ilotro- politan area. Obviously the uncommon circumstances and v/ide divergences of Alsiska trade practices generally pointed to the un’.vorkc.bilit^/ of a basic price regulation patterned to fit conditions in the States. For equally obvious reasons tho possibility of making arn/ one freeze selling price for goods shipped into tho Territory for resale v/as precluded, no matter v/hat base period v/as adopted. ITith both Regional and Territorial offices just being sot up and only partially staffed there was no time to bring about the necessary modification of GHFR, liberal as \rorc its adjustment provi¬ sions, under vrhich it might have been expected to do a service for Alaska, It should bo pointed out, however, that GMPR vrc'.s put to limited use in Alaska, in that goods produced and used in the Territory remained sub¬ ject to its provisions, frozen to the highest soiling price that each in¬ dividual dealer had had during tho month of Ilarch, 1942, Services also remained under GI'.iPR with March '42 as tho base period mitil tho simimor of 1944, I.1PR 194 Pdj]PLAGES GMPR The Regional Office in 'Tashington, in the absence of a Price Staff in the Territorial Office, wrote and promulgated Maximum Price Regulation 194, as the solution to that problem. Based upon a regulation adopted by the Canadian Government to meet somewhat similar trade conditions in northern Canada, it v/as adopted in July 1942, and became effective on September 1st, Because of the difficulty of getting it into the hands of merchants in the hinterlands, tho regulation was subsequently amended to make the effective date October 1, 1942. MPR 194 applied only to morchandiso imported into the Territory for re¬ sale, v/Rich, in the Alaska economy, means about 90^ of all commodities con¬ sumed in Alaska. Tlic basic difference betiwoen MPR 194 and the stateside "freeze'’ regulations v/o.s that it froze tlio markup, rather than tho selling t / 60 pricG, and, for reasons horctoforc givon, established the month preceding Pearl Harbor as the base period. Thus, at one stroke of the pen, so to % speak, tvvo important steps v;erc taken to protect the retail merchant from the ruinous ’'squeeze" that v/ould have developed under GHPR, It also pro¬ tected him against increases at the wholesale level that had occurred prior to the freeze date outside, but v/hich, because of his distance from his * source of supply, the Alaska retailor had not boon informed of in tim.o to effectuate comparable increases at the retail level. And too, it protected him from fluctuations in shipping charges, over which the OPA exercised no controls. In other v/ords, under liPR 194, the Alaska mcrcho.nt v/as allowed his acquisition cost, even though it had increased since the base period, but he was frozen tc the dollai^and cents m aricup he had sot for iiimself in the month preceding Pearl Harbor, for the same or comparable merchandise. JIPR 194 'vas far from being a perfect regulation, but y/hon one considers that it had to be written 'vrithout benefit of an economic or merchandising analysis, it is apparent that it had its virtues. Its reporting require¬ ments iTOre burdensome and evoked loud and raucous complaints from merchants caught in a labor-short crisis, but it did protect them from the economic collapse that v/ou.ld inevitably have follov/ed had they been obliged to operate under the GLIPR. In spite of ilPR 194's flexibility, which made it possible to follov/ the same general operating technique from Ketchikan to Barrow and points intermediate, it permitted some serious inequities. For an example, it offered no means of reducing prices in the boom to’ms: Kodiak, Anchorage, Sitka and such places, v/here infle.tionary prices and fantastic markups vrcre already established during the month before Pearl Harbor. In these places it actually tended to lego.lizo prices that were definitely far out of line from those in such other sections of the Territory as had not folt the influence of defense projects prior to ITovembor 1941. - 61 It roquirod considorablo Virorking ovor as tho program progressed, but as a basic regulation it was at least as good for tho area it covered as GI'IPR proved to bo for the States, ^ind, with tho launching of tho Specific Prices Program, most of its bad features became unim.portant, Subsequently, revision of tho regulation itself removed most of its "burrs". Only a limited amount of goods produced vri-thin the Territory is used in it. Alaska-produced a.nd consumed goods consist mainly of such things as bakery goods, milk and choose products, and some minor manufactured lines of merchandise. Most of the products from the so-called extractive industries, previously mentioned ca.nned and frozen fish and fish products, fur, lumber and similar commodities .... arc for the most part shipped outside for consi,imption, at least tliey wore during the early years of tho war. Such locally produced commodities as wore used in Alaska re¬ mained under GMPR, unless subsequently put under specifics, as v/as the case later vjlth broad sold in some areas. There wore, of course, other regulations of general applicability to Alaska, several of v/hich became in the course of time very important, but after tho adoption of MPR 194 most stateside regulations were superseded by it. Only a fov/ of tho national regulations r/oro applied to Alasko., The most important of these v/ill be mentioned subsequently. This was the situation "prico-v/isc" when tho Price Division of tho Alaska OPA office came into being in the fall of 1942, four months after tho launching of the OPA program in the Territory. It had tho tv/o basic regulations — 1!PR 194 and the GMPR already in effect, providing a founda¬ tion on -/hich tlic price structure v;as to bo erected. It had also those fovr previously mentioned regulations of general applicability. In September, 1942, a Price Executive and a Senior Economist arrived to take over from tho Director tho specialized job of making tho necessary economic studios of Alaska and formulating the special price program necessary for the \ , )* r % 't I * 4 4 . -..'Ti rj *'% ■ *9* 62 - Torritory, Thoy found a colossal job awaiting thorn in spite of the pre¬ liminary work which ho.d boon done by the Regional Offico, acting upon sug¬ gestions of the Director, not the loc.st of which vras revamping the existing rogulations-and eliminating the various and sundry features impractical for Alaska. IgR 288 - ALASIui’S PROGR.'J;I OF SPECIFIC PRICES In Alaska, as in continental United States, the real remedy for the inadequacies of such an omnibus regulation as MPR 194 lay in the issuance of specific prices. To lay the foundation for a schedule of specific prices, in which it v/as decided to include as many cost of living commodities as possible, a master regulation, MPR 288, v/as drafted and put into effect in December, 1942. Its first coverage was small, serving actually to meet a particular emergency, and serving, too, for sotting up the regulation itself and establishing its main provisions. Then began the long history of amend- \ ments, each of which added new commodities to the list under specific prices. In all, specific prices wore set on approximately 3,000 sepa.rate items, sometimes meaning 14 different area prices for each, before the price control progrc.m ended. Included in those was the complete revision of the specific prices on-all dry groceries, also canned fruits and vegetables, soups, juices, etc., completed and promulgated just before the passage of the I, Renewal Act, under which many of the commodities’ prices wore summarily removed from control. It also included the new m.eat prices established when moat was restored to control, but XThich were cancelled out even before thoir publication in the Federal Register, by a subsequent decontrol order. The task of v/riting spocific price schedules for the Territory was in no sense as easy as it may sound, and v/as a task in no v;ay comparable to that of v/riting specific price schcdulos in the States, whore three prices wore established, based upon the typo of operation and volume of business, and using a multiplier established on the findings of statis- I 'i * - . i I / I a i I I \ f < 63 - tics already assembled and tabulated. In Alaska, the problem of trans¬ portation costs, different in every to'^n, of froese-up" areas vrith busi¬ ness conditions and operating costs undreamed of in the States, plainly pointed up the impossibility of adopting stateside procedures. The method that came ultimatelv to be used, after months of study, was to select 16 principal communities, two of’vvhich .... Juneau-Douglas and Skagway-Haincs .... are really twins. Then the ceiling price of an item was figured for each of these towns, based on its w'holesale pri.ce in the Port of Seattle, from, which all shipments at that time were made, to which base was added the cost of landing goods to each of the ll; commiunities. To that figure was added an increase, on a percentage basis , which corresponded writh the historical markup used for each commodity in that particular comjnunity. This latter figure v/as secured as a result of a careful, pains¬ taking economic study of the costs of doing business in thaw parti¬ cular community. The collection of data on which these studies wore made vras done principally by Board Clerks and District Office personnel, under careful directions formulated b;/ the Price Division. But, in addi¬ tion to this, trade meetings w^ero held in the orincipal toiTOs of the Territory?- for the purpose of securing merchant reaction to the proposed prices before they vrcre adopted, and valuable suggestions made by the merchants themselves often led to revision of the schedules to cover unforeseeable costs of doing business in som.e particular community. In other communities, surveys wore made by Foard Clerks and other Price personnel and in the m.ore remote and isolated areas, by Price Aides, to sample public opinion on the proposed prices. x\ll of this procedure was time-consum.ing, to an inordinate degree, in the disrupted transportation and communications systems of war-tinc Alaska, but it was necessary if the economic balance of the Territory were to be preserved. And, short- ii \ - 64 - staffed as the Price Division was at this crucial period, it accomplished its task with surprising smoothness and celerity. Specific prices were particularly important in Alaska. In small towns, where the extension of generous credit was quite prevalent, and contacts qi ite personalized, consimiers were hesitant to complain directly to merchants, or to price panels made up of their friends and neighbors. Investigators and Inspectors were seldom able to work in the more remote and less accessible communities for any length of time, and checking the compliance with ceiling prices under MPR 19U where records were scarce and inadequately kept, not only took a lot of time but was a difficult job even for the most astute Board Clerk. The tendency to resort to law and litigation is notably weak in Alaska, especially in the smaller, "more neighborly" toi;ms. Only a very few Administrator's Own Treble Damage actions ever irere filed in the Territory and complaints against merchants, both to price panels and the OPA offices v/ere usually accompanied by the urgent request that the name of the complainant be kept out of all actions against the violator. So in general, specific prices were conducive to certainty of compliance and, as a group, Alaska merchants were so apprehensive of disorderly and inflationary prices and the effect of them on their post-war position, that specifics were welcomed by them generally. REGUIATION OF FISH PRICES IN AIASI(A - MPR Ul8 V/hile setting of specific prices y/as carried on continuously from December 19ii2 to the end of the price control program ar 1 formed, during these fo’jr years, a major part of the y^rork performed by the Price Division, it v/as by no means the only work done by the Division during this period. Its attention to the problem of prices for fish ymis also of great importance, and this phase of the vj-ork, though more or less seasonal, yras perhaps produc¬ tive of more headaches than ever came to it as a result of its sustained and continuing program of specific pricing. Fish is important in the economy r I 65 - of Alaska. It ranks far ahead of gold, even vmen the demands of the trade are normal, and, in the face of world-vride virar, and incessant demand for more and more proteins, market demands for this succulent food have been far from normal. Because Alaska fish were going to the markets of the world, through lend-lease purchases, the whole problem of pricing it at all lo\'els became a national, rather than a territorial one. Because of this the prices were set by the Fish Section of the National Office. The Territorial Office did yeoman service in gathering and compiling data on fish operations, at all ^leve^s, and analyzing, at first hand, the situation that existed up and dov/n the coast. To som.e of the fishermen, who were greatly restricted by the prices later set by IvlPR Ul 8 , the national regulation v«rhich was made applicable to Alaska, and the price set for the canned product did not make sense at all. They believed to the end of the program that the figures had been set with less than even-handed justice. Ttiis is a cry not unfamiliar to Alaskans. It rings through every session of the Territorial Legislature and drives the nails into many a party platform. And OPA personnel heard its ringing too, vath clarion clearness throughout all its places of operation. Tne fishermen admitted that the prices set by MFFu i;l 8 'were higher than those prevailing prior to the outbreak of the war. Their main gripe lay in the fact that prices vfere sharply reduced from the level they had reached before the issuance of MPR I 1 .I 8 . It vtas useless to point out to them, that the established price gave them an income com.parable to that attained by high salaried v.-orkmen in other lines, 'fhe fishermen believe in price control, but ... like so many others who have given the program vocal support, they believed in it for the things they bought, more intensely than for the things they sold. The imposition of prices for fish under the national regulations made applicable to Alaska, of v;hich tlPR i|l 8 was the most important, in an industry ]■* f .'IH ■ ' * It . 1 » 5 ’' ^ 'i^xV ^ 'J , ' t lin' /, 4'- I ) •i.' ^ ■^' I iK-' ■ » \ e k 'V -* •*?'■* ■■’iv ^ j ^ 1 . 66 - rife v/ith stiff and soinctirnes cruel competition, brought many arguments to the fore regarding historical practices. Being on the scene, the Alaska OPA office had to hear out all parties, to explain the National Office regulations to them, and them to the Regional and National Offices. Ilith an ovenvhelming T/orkload in other lines, no loss demanding, the Price Division found this no easy task, but nevertheless gave it sympathetic and generous coverage because of the importance of fish in the diet of a world so seriously short of proteins. A valuable by-product of the v;ork of the Price Division in this respect is the mass of data it assembled on the fishing industry of the Territory. Such data had not previously been available from any source. It has already proved of vast value to other departments of government, and should greatly strengthen the effectiveness of both the Territorial and Federal Government in the future in their dealings v/ith Alaska’s most important industry. For such purposes, the contribution of Alaska’s OPA office should provide benefits that v/ill inure to the welfare of the Territory long after the OPA as an agency has passed into history. MPR 165 LIPR 165, which was adopted in the States in the early months of OPA operations, and v/hich established coiling prices for Services, vras not made applicable to the Territory. Apparently this v:as because, at the time of its issuance in the summer of I9I42, the pric Division v/as, as yet, unorganized in the Alaska Office and the necessary economic stuc^’’ on which equitable service rates could be set could not be made. It was the expressed intention of the Regional Office at that time to have this economic study made, as soon as price staff v/as available, but the urgency of other pricing matters, heretofore discussed, prevented this. So Alaska remained under GiiPR, in respect to the controls over service charges, through all the hectic first years of OP.i's operations, when the impelling necessity of getting v;ar projects completed * <1. . n»:j v?- ■ ‘ >^ ■*“. i.5l®^ .; ** /. M . .. /i -•■T.a /.« ■ i ' eft '> ^ lis f '. ( ■ s ••» ■; . f >.•* V V 1 - •^.■. I •' C- • • /■: ♦ * tl • • ♦ « -*• 4 /V «■ .. t *■ . • ^r • 'iT* • 1 ifc lijh if. jj 67 - sent wages zooming sky^'^ard by leaps and bounds, under approvals grant¬ ed by succeeding wage-control agencies. Small service establishments felt the impact of the cut-throat competition for manpower keenly as their costs of operations rose. Delays occasioned by the employment of unskilled labor resulted in loss of production, and added to unit costs, while operators remained frozen to rheir March 19^2 price levels. Applications for adjustments came thick and fast during this period, and much time and attention was noco,ssarily spent on this phase of price operations — provocative of bigger and bettor headaches, in this country where the average small operator carried his office under his hat, and records, required for adjustments, vrero actually non-existent. Hovrever, the Alaska Office work-.;d along for throe years v.^ith the Services still allegedly controlled by GilFR, before the Regiona.! Office finally yielded to the inevitable early in the spring of 19hS, oka^/ed the extension of MPR 165 to Alaska and made it the basic regulation for the control of Services in the Territory, Even then, however, it faced tremendous problems in the matter of service controls, for approved wage increases occurring during the hectic throe ^/ears of war contruction, as v/ell as unauthorized increases forced b;/ competition with vrar contrac¬ tors, could not always be absorbed — and the demand for adjustments con¬ tinued to be insistent and, at times, im.perious. I-IPR 191; REVISED It was during this period too, that the Price Division found it of first importance to give attention to the revision of LPR 19U itself. The issuance of liPR 288 had operated to reduce man^.^ of'the difficulties of operating under 19 l 4 ^ but only so far as the comr.nmitie's covered by 288 were concerned. This included the larger towns in the coastal areas from Ketchikan to Nome, and Fairbanks, Anchorage, and Palmer on the Alaska - 68 - Railroad. Subsequently, too, tho specific schedules applicable to Home were expednded to all the Seward Peninsula areas, where li^'htcrage charges were a factor in operating costs. But these communities by no means include the whole merchandising area of Alaska. The small villages in Southeastern Alaska and tho entire coastal ar-a as far north as Barrow, the railroad towns, the trading posts in the interior, and other merchandising establishments in tho far reaches of the Territory remained under MPR I 9 I 4 . Under this they were frozen to their pre-Pearl Harbor markups, but allowed increases in acquisition costs. At time w'ont on, it became increasingly hard to compute pre-Pearl Harbor markups. New goods, in no sense comparable to those customarily sold in 19 i 4 l, were coming on to the market in increasing quantities, necessitating appli¬ cations for prices, and othcr.viso resulting in mounting operating bottle¬ necks irritatinr to merchant, consumer and the OPA alike. Furthermore, no provision of IffR 191; permitted reduction in prices in communities where markups had been inordinately high during the base period. To meet these difficulties and overcome these barriers to effective administration of the price control program, tho Price Division, in the spring of 19hS, issued its Revision of IiPR 19it. A general streamlining of the basic regulation vras achieved and the worst burrs in the basic structure v/ere eliminated bj^ this revision, k new feature of this re¬ vision gave tho merchant an alternative method of establishing his mark¬ up. If his records were inadequate to permiu him to determine his dollar and cents markup for the month preceding Pearl K'rbor, he could take 9/10 of his percentage markup for tho base period. Another now feature, knovm as the Director’s Initiative, was intro¬ duced. This permitted the Director to roll back prices in comiaunitios vrhere boon conditions had existed in the base poriod, to bring them into line with prices in other communities where operating costs vrere compara- !<-* -Vr, # •' ft. ^1 - 69 - ble . Although the cessation of hostilities in Alaska had ended the conditions in many of the tmns that created boom prices, and compe¬ tition had also reduced prices to normal levels in m.any other i-laskan comniuaities before RMPR 19lt became effective, use of Director's Initia¬ tive was freely made in many places. Significant price decreases re¬ sulted — also loud protests in certain areas where it was still possible "to make a killing". OTHDR BIPQRTANT RIGUUTIOIJS AIRLIGABID TO AUSKA It has boon pointed out that the provisions of IviPR 194 and its revision had the effect of rendering most stateside regulations in¬ applicable to Alaska. Some feviT of the national regulations did remain in effect in the Territory, however, and were impoi’tant factors price- vflsQ in Territorial operations, ivmong those were two — IIPR 13U and 136 — dealing v/ith the rental of and the coiling prices of hoa-\r^ machinery used on the ve.st construction and road building projects of the interior. These vrere quite as important in those areas as the fish regulations were along coastal nlaska, and also quite as productive of headaches. 'i/Tnen the executive order v/as issued, calling for the cessation of all mining activities except those connected v/ith strategic materials, all placer mining operations in the Territory wore at once suspended. That immediately made available for resale, or rental purposes, vast quantities of heavv’’ equipment which viras urgently needed by v.rar con¬ tractors. Fantastic stories of high prices charged for this equipment flooded the OPA office and it t\eis found most expedient to pull out these t\vo regulations, heretofore unmarked and unnoted by .i-laskans, dust them off and streamline them a trifle to moot Alaska's needs. Also expedient was the chore of educating both contractors and ovmcrs of the machinery to the fact that ceilings had been established for them, and violations I , ■ * ‘ i * 70 y.’’ould not be tolerated. Millions of dollars 'nere undoubtedly saved by the government on war contracts and by private individuals in Alaska because of the operation of those regulations in those areas v;here vast airfields and other heavy' construction jobs were underway throughout the vmr years and continued, in fact, until long after V-J Day. A-i. fevr other stateside regulations were now and then found to bo important to the job of controlling prices in' Alaska. But those a.bovo named constitute the most important "foreign regulations" that played a significant part in the Alaska price control program. Generally, the Alaska OPA wote its o?m, and even the ones that were adopted from Out¬ side invariably bore the insignia of the ro!-gulation writers who tailored the program to meet iilaska’s individual needs — -Alaska's own Price Division. •5 71 HAvVAII INTRODUCTION , The operations of OPA in Hawaii were unique, in that prior to March 10, 1943, price control was under the Office of the Military Governor. OIA representatives were sent .to Hawaii in June 1942 to act in an advisory capacity. The staff was gradually enlarged, however, until by March 1943, when OjtA assumed full responsibility, all price operations within the Office of Military Governor were handled by the OPA staff. Almost immediately after December 7, 1941, the Islands became a mil- .itary reservation. From then on there was an increase in military personnel until it became apparent that the military was fast becoming the most im¬ portant industry in the Islands. The flow of money from military personnel alone would have significantly increased volume of business and created problems of obtaining goods to meet demand. In addition, however, there was the influx of defense workers which had been noticeable in 1941, but which was greatly accelerated in 1942. The labor shortage started a wage spiral and the increased income created a tremendous pressure on prices. Purchasing power reached a new high and volume of sales of local firms was doubled, tripled and in some cases in¬ creased tenfold. In the early days of the war, business was disrupted considerably, boats did not arrive with any degree of regularity and shortages developed in lines where inventocies had been low -- particularly on the outer islands . This situation did not last for very long, however, and adequate supplies arrived regularly after the first several months follov/ing December 7. The inflationary situation, the disruption of normal supplies, the instability of costs all presented problems in price control v/ith which ^ r *rJ- ' ■' ‘i-u I •' ' -.V •' ' 1 I, ' I y-'►‘Y >fv / - ^,v I 72 - the OFA had to cope. ThE FIVE FACTORS ^ To understand the economy of Hawaii one must realize the importance of the so-called "Big Five". These five firms-Alexander and Baldv;in, Ltd., Castle and Cooke, Ltd., C. Brewer and Co., Ltd., American Factors, Ltd., and Theo. H. Davies, Ltd., - founded by early missionaries, dom¬ inate the entire economic life of the Islands. The development of these companies began in the early days when these "factors", another name for agents, dealt with whalers and trading ships. They provided the ships with supplies and often acted as middlemen in the sale of such commodities as were brought to Hawaii. Hawaiian sugar planters generally arranged for the transportation and selling of their sugar through the captains of the trading ships. It was a natural development, following the collapse of the whaling industry and the great expansion, that the factors were encouraged to divert their capital and to concentrate on sugar. Marketing problems, the iso¬ lation of Hawaii, the problems of supply, the risks of crop and market fluctuations, and the great outlay of capital required, all operated to induce the planter to turn to a single concern that specialize in these fields while he dealt with the primary plantation problem - maximum pro¬ duction . According to Shoemaker, the long-run result of this policy was to deprive the plantation of its independence and to develop a highly inte¬ grated system which centered authority in the factors. At any rate, by 1900, two years after Hawaii was annexed to the United States, virtually all the capital in the Hawaiian sugar industry v/as in corporate plantations. 1/ This section is based on the U.S. Labor Department study by James H. Shoemaker, Labor in the Territory of Hawaii, 1959. - 73 - Today 35 of the 38 plantations in the Territory are managed by 5 factors, known as "The Big Five”. The factors are the business agents for the plan¬ tations. They purchase supplies, finance their operations, market their produce and represent them in practically all of their business dealings. In return for these services, the factors are paid a commission, typically 2^ percent, on all dealings on which they represent the plantation. These five firms own. and operate the I'Aatson Steamship Line (sole water transportation link with the U.S. mainland) and a group of large hotels, act as wholesalers of a v^ride variety of goods, commission agents and rep¬ resentatives for nationally advertised lines, general importers, and insur¬ ance agents. Two of the firms imported in 1941 approximately 70 percent of the food brought into the Territory. Their positions are also dominant in hardv;are and dry goods. All of the factors operate, in one community or another, plantation stores and other retail outlets. They dominate both the sugar and pineapple industries which are the main industries of the Territory. In addition, various small industries, mercantile establishments and utilities, are either operated by the factors or owned by their direc¬ tors and stockholders. Typical of these are Honolulu’s largest department store, a chain of grocery stores, and a large market. Since the Big Five are managed by interlocking directorates, the con¬ trol of the economy of the Islands, highly concentrated at all marketing levels, is in the hands of a very few persons. THE ECONOMY Hawaii possesses every element characteristic of a trading economy. The Territory is highly specialized in sugar cane and pineapple; it is insular, and its population is relatively high in income. In normal years, the total imports and exports of the Territory approximate ^100,000,000 each V c - 74 f Most industrial materials and manufactured consumer goods are imported, although there are some small local manufacturing activities. The marketing structure does not differ greatly from that of any American community whore the volume of manufacturing is low and most goods are brought in. Most merchandise proceeds through two usual levels, whole¬ sale and retail. There are some seven hundred wholesale firms in Havmii, % mostly centered in Honolulu. Ninety percent of all the v/holesale business, however, is carried on by one-fourth of the firms. The typical retail firm is small although the total volame of large retail establishments is sub¬ stantial. In both the wholesale and retail trade there is a lack of spe¬ cialization of stores. There is a tendency to combine clothing and dry goods with the sale of groceries similar to small continental communities. For purposes of price control probably the only complex merchandising relationship v/as that betvreen the islands. The small islands of Lanai and Molokai have always drav/n their merchandise from Honolulu and occasionally from Maui. The other four islands normally order the bulk of their supplies from the mainland. The amount of inter-island shipping is controlled by two main circumstances - the availability of mainland shipping - and the quantity of purchases. PRICE P.EGULATIQNS On March 10, 1943 the Military Government relinquisl- d control of Hawaii and the Office of Price Administration assumed full responsibility for Price Control and Rationing. As soon as feasible thereafter April ceilings and adjustments through appeals were supplanted by specific price regulations, applicable at first I to the Island of Oahu and later to the islands outside. Attention was first directed to food prices and subsequent schedules v;ero chosen on the basis % V * \ ■' t * r Nsn’f' JU^*’5?(r^«K'frit ■ '.’-rsv V •■ . -T.vv 4;t trrJte ' ^ W MI^ ‘ tap «;$ •it 'jlsr «j* I ♦-■Hi’ f*"*t «W* •.V)5c •* .rr f 7/ 1 r.U:1^9%%* n ■,* >'t«c f.;r;’ 1 ' (HI rn' « i'J • _J.l* .-Wnifti'' * , '•fl I 0 ot • ’ ■»' ■ V*’«i|P •■ A^IPWPT^'' tl#dwa ' ■' • '^: vir,- fir ^ .-^v U-1 tajii ^ * JKSIH ' \'^' ‘'" ■ ^-i: It :* ■• ^'►.; 4 'isvi .*■ . * t U:. V 7 ' ■ It •- •< **¥«-•- Ys ir«A]yi|l«i# . , ‘- 'x^kiaii -i-j-.-ifl*-. 'i^ X«ti >sxret - ^ V.’ •■ r* linOMJi >M»7 U” f .• ■ ■ '^c- , ‘ ;t^ ifcif ; 2*aiS^ (K • ufirTt.;:*®! grii.r« "..'ni ju#*;.! .-«*»<< li-itrt/ I i it .'■wpd? T-J'-.i-J Ni iiSi'i«)1'i Wyp f t. X I ^ UtiMlBt* )|>t|(‘4i v« lili; fi:.: V ..t H.ijc. -1 .iw ■•# .• #T ‘4'- I f;3[fctkA ..t* ii3 • i* .V.o*’^ M Hi li .“iad “-r «( i--li'. ' ' ’' ':. *{£^ ,■>. • ^ ' ' ^*J * *■•■■! r.Js,!#; ■■ ; .>fTi ‘^.j--4 !iift> jr." •; jL:6''Pi Tr.‘ 7 7' •■ ■ '(r“■ V , t •*»\ . yi' -.'ni i .*?r N i y' 75 - of volume of business, conditions within the trade, and possibilities of writing adequate and enforceable schedules. Gradually a study was com¬ pleted of all OPA regulations in force on the mainland and some were a- dopted as applicable in the Territory. A consolidated maximum price reg¬ ulation was issued for the Territory which included all existing local regulations. This master regulation became Maximum Price Regulation 373 and most of the Hawaii regulations were a part of this compendium. In general, the procedure in writing price schedules follov/ed one pattern. A member of the price staff was assigned the job and an industry advisory committee appointed. This group was a carefully sampled cross- section of the industry - the large, small, chain, and independent; "haole” l/, Chinese and Japanese; the urban, suburban and rural; the cash and carry, service and delivery. The appointment of the industry committee was given wide publicity in the press. The relationship of OPA and its industry advisory committees v;as a reciprocal one. Many small (and particularly alien Japanese) members of the trade sometimes hesitated to approach ’’the Government” directly. Though the committee problems of the industry were funneled to the Office of Price Administration. With the aid of the committee, the price analyst worked out provisions of the regulation, including a definition of "landed cost”, or a decision to use invoice costs, and appropriate margins or markups. Frequently factual reports by the Accounting Division provided valuable back¬ ground material on the industry under consideration. There was a great variety in the types of provisions in the regulations issued -- for instance, there were a number of types of "landed cost” Dif¬ ferences result from trade practices, attitudes of the particular business 1/ The white population descendants of early settlers from the States are known as "haole” . 4 I \ - 76 - men involved, and, of course, the progressive experience of the office under various regulations. Regulations were written, in so far as possible, in the language and terminology of the trade. For example, most grocers in the Islands (except Ivlaui) are accustomed to a margin-on-selling price, v;here- as fresh fruit and vegetable merchants are accustomed to think in terms of percent markup on cost. These differences v;ere reflected in the schedules. Attitudes of individual members of the industry advisory committees tov/ard the OPA differed widely, of course. Some were apparently motivated by little besides the very natural one of self interest. Others mixed a concern for their own profits v;ith a very considerable regard for tho qual¬ ity of merchandising in their trade and for tho protection of the general public. For example, frequently merchants objected to a provision which might open the door to "bad buying", i.e., purchases at high cost, or the entry into the Islands of merchandise of inferior quality. The continuing advice of the committee was sought from time to time in reviewing schedules as difficulties wore encountered and experience revealed the necessity for changes. After the provisions of a regulation were determined, with the advice of the trade, the Legal Division prepared the regulation and it v/as signed by the Territorial Director under authority delegated for Region IX. There then followed mailing out press releases, trade information hearings — at which the regulations were discussed, and frequently the issuance by the Price Staff of a trade bulletin describing the regulation. In some cases abridgements of regulations v/ere issued for particular portions of a trade, such as the bulletin issued on tho grocery regulation to the drug, depart¬ ment, and hardv/are stores, giving excerpts of the pertinent sections. En¬ forcement was, of course, the last stage, and this v/as done exclusively by that division. '' ■- -- ».u»k ^ ytH?i ♦ntn -"Mtt'-W A>«r IK* -r^^'r-',L^3k9 m# •■■.'IH/f /Ijf - » • - W^'r*<-wi« I 4 *,„ .« > ■ a T E» y ♦s .*«•.• %-s^ 1 ^ nil--'‘v;.rt*'Viv.-4*^^v fii. v • Jir» (V*r «<|«ir i» « i ( « ' cilil' • '■' • . '*'t --'» **•: r»i^« I ti- t .♦-.'ll 1 ’-.»»*)W ' J A > ^ •19 .9i4ilm ■• W^Sir. - ^.4/ *♦ 1^ ^ « ‘ ■ *'■ • •'• -Vji ■’ -* ■ , 4 'y ' ■ '* _i illl ihrf.^ - .J j I 1| «> . In ".' T >a- T* ■* ^4- - ,-' *1 iftl wTV itv^ Off tre _ - -•. t. • X« il*>j^! f i'>': i *‘-.^ '♦tf 3 V ',a Of j .•■' i ^S-'r.j i-( *»#.*,*' ♦ ♦ ? 'J*-* I’i */• (t.-i.j-*,.‘? ►—■»* - .1 r*. -.J iM-l4j it •»«* * *v.i* i4r ft :i^= . - 77 ~ EFFECTS OF THE SCHEDULES The effects of the schedules issued by the Office of Price Administration were complex and they were svreeping. Price schedules necessarily have some repercussions upon business methods. An example of such change, which proved highly beneficial to the trade, is the vegetable market. The merchants in this trade were historically a highly individualistic and competitive group. Under OPA procedure the San Francisco representative of Region IX forwarded by air mail, at the time cargoes were loaded, invoices of all fresh fruits and vegetables on board. These invoices were received in Honolulu well in advance of the shipment. Prices were computed on fixed margins and a trade meeting called to discuss the newly computed prices and special problems. < As a result of these developments, for the first time the trade met as a body. It also became clear that once around a table much buying and selling could conveniently be done. After pricing v\ras complete, the trade was given their im’’oices, and as soon as the OPA staff withdrew, proceeded with the merchandising of the produce. The requirements of many price schedules that accurate records be kept may well leave its mark upon the Territory. Many merchants, e.epecially the small and the alien Japanese, learned about margins and other procedures f for the first time. Cost accounting data requirements in some instances led businessmen to their first careful analysis of their business expenditures. In the sales of some extremely popular brands of merchandise, exorbi¬ tant margins had formerly been earned. The justification from the merchant's point of view was that he had incurred, usually, substantial promotional expenses and should be entitled to reap the reward. It was, of course, im¬ possible in the framing of schedule to make exceptions for specific brands. Margins were therefore much more even as between various brands of the ssxm.e type of merchandise than they were before OFA schedules appeared. , A A t ■* ^ ‘ I ^ 78 - PRINCIPAL PRICE SCHEDULES Groceries - Yfliolesale and Retail - At the wholesale level, groceries were divided into forty-four classes of commodities - some broad (fruits and vegetables, canned) - some narrow (popcorn). Ylfholosalers were permitted to take a series of specified margins on selling price on these categories, basing their computations on ’’landed cost” — the sum of the invoice, not more than six months’ storage in San Francisco, San Francisco trucking to the wharf, ocean freight, tolls and insurance with war risk insurance lim¬ ited to War Shipping Administration rates, and, finally, a limited amount for local trucking. The wholesale ceiling prices, thus computed, were filed with OFA. On the basis of these reports about nine hundred specific dollars-and-cent ceiling prices wore fixed covering, it is estimated, about 95 percent of the volume of grocery sales. On all items not specifically mentioned (the miscellaneous odd lots of merchandise) the retailor was given a series of forty-six margins-on-solling-price, frorri v/hich he computed his ceiling prices. Most margins at retail ranged from 12 percent to 25 percent, de¬ pending upon the volume and marketing problom.s of each commodity. These same margins were used as the basis of computations of the specific ceilings. Only one wholesale margin could be earned in the Territory, even if the goods moved from one island to another. Thus all islands vrere stim¬ ulated to make their purchases from the mainland directly, although some¬ times a v;holesaler would buy from another wholesaler when the primary wholesaler was willing to split his margin. As a result, a retailer ordered merchandise direct from a wholesaler located on another island, whereas formerly two wholesalers viore often concerned in inter-island movements. as well as a retailer. r \ T y/;' . .W‘^4 ,'-C' # • /■ *‘^ • I#. k < .-1 h rJiki 5., t *1 > V r *7 4 « f ^i;. . , » • 1, •« i a ‘«i wp’ -■ • < » A t_ :V' - *. i * ,« li?..' 4, tl I - 79 At the retail level the Islands were zoned according to transportation costs. Due to the mir, many ports were closed and trucking costs in some areas were so high that some supplementary revenue had to be allowed to cover them. The islands of Molokai and Lanai bought entirely from other islands and therefore allowance for ocean transportation was essential. In general, the policy was to set a single price level -- the 900 specific prices referred to above — and then permit retail grocers in Zones two and three to add 2 or 3 percent when making collections and thus cover, in the aggregate, the total additional trucking or ocean transportation costs pe¬ culiar to their area. On certain of the bulkier and heavier items (such as rice, flour, crackers, toilet tissues) it cost more than the 2 or 3 per¬ cent allowed to ship or truck the commodity to the distant zones. On others (such as canned chicken and turkey, luxury fruits and vegetables, canned seafoods) it cost loss. The allowance was sufficient on the average to cover the total transportation in excess of that incurred by the average merchant in Zone One. Island Coffee - Kona coffee, grown on the Kona coast of the Island of N Hawaii, after some processing locally moves to Honolulu to be roasted. There¬ after, most of it is consumed on Oahu f\nd other islands-, the U.S. Army being the largest purchaser during the war. Formerly much was shipped to the main¬ land for blending purposes. General ifaximum Price Regulation 28 set specific dollars-and-cent ceilings at the following levels: delivered roadside, for the "parchment" or raw coffee; f.o.b. mill in Kona, for green coffee; ex- vrarehouse in Honolulu for green coffee; and roasted bulk and packaged in Honolulu at wholesale. A margin was then provided at retail. The regulation set ceiling for the millers sufficient to allow for trucking to the Kona mill, milling, a milling profit, trucking across the island to Hilo of the semi-processed coffee, ocean freight to Honolulu, r c K c I r t 1 I 80 and trucking in. The roaster of the coffee in Honolulu is universally the wholesaler so that single margin covered the costs of roasting, profit on this process, and the wholesaler’s charge for distribution. The roaster- wholesaler margin was based on that prevailing in 1941. To take care of packaging, a separate ceiling was set when the wholesaler packaged for the retail trade; otherwise a bulk-roasted ceiling price applied. Dollar-and-cent ceilings at retail would have been placed on this prod¬ uct had it not been for the scarcity of containers occasioned by the war. Odd-sized jars, etc., had to be picked up by packaging v/holesalers at widely different costs, and it seemed fairest to allow the full cost as actually incurred. Vdien the roasted coffee was shipped to the outer islands, a transpor¬ tation differential was allowed, as in the case of other inter-island move¬ ments . Imported Fresh Fruits and Vegetables - Imported fresh fruits and veg¬ etables were priced boat-load by boat-load because of the.wide swings in cost and condition of such merchandise. The OPA representative in San Fran¬ cisco collected and transmitted complete invoice material by air mail at the time each boat left, so that by the time the boat docked in the Territory a trade meeting had been held, the prices had been computed and legalized. Typically, the quantities available were so small that each boat-load was sold prior to its arrival. The pricing was done by taking a v/eighted average of the invoices of each commodity, adding ocean freight, insurance, etc., a?d thus arriving at "landed cost" in the Territory. To this viras added 15 percent on cost for the wholesaler, and then a specific dollar-and-cent'wholesale ceiling was set; to this was then added a markup on cost ranging from 33-l/3% (oranges, potatoes) to 45^ (lettuce) for the retailer. The ceiling, again, was spec- V r- f C A i t. ■ ’ / \ \ U 4» I r f *• ; • '■ > '*."■. > , v< .krtV'ilKfe J'vV ) I liJfA j \ 1 > ( 81 - ified in dollars*nnd-cents. The percentages varied slightly in light of the spoilage history of the product; in seasons v;hcn oranges v;cre coming in v/ith a high degree of spoilage, the percent was higher. liarkups were not altered to take care of spoilage on the boad-load currently arrived, but only on the basis of past arrivals. All of the islands used the same system. In v/eeks during which no boat went directly to an island from the mainland double wholesaling out of Honolulu was permitted, but when boats proceeded to each island directly, Honolulu prices applied. Island*grown PYesh Fruits and Vegetables - Hawaiian-grown fruits and vegetables were priced by specific dollars-and-cents ceilings at both the wholesale and retail levels. Periodic changes were made in this schedule which covered approximately 95 percent of the various kinds of fruits and vegetables grown in the Islands. In the majority of cases a change in the ceiling price of a commodity had to be carefully examined from the produc¬ tion angle. Too high ceilings might cause over-production and the reverse was true of a ceiling that might bo too low. Since the Office of B'ood Production was made responsible for increasing production of locally-grov.ai produce, in order to save shipping space and to improve the diet'of the Islands, much reliance was placed on their recommendations. Their staff included a number of competent experts in the field of local production, who were always consulted before price changes were made. Statistics of costs and output wore particularly weak in small-scale agriculture, hence the judgment of experienced personnel was especially important in this field. In general, the wholesaler of Island-grown fresh produce was allov/ed a markup of 15 percent on cost, and the retailer between 25 and 50 percent for most products, depending upon such factors as^perishability, loss of weight in retailing, and ease of selling. A committee of governraent offi¬ cials, local farmers, and morchs.nts advised the OPA in the revision of these 82 - » margins from time to time in light of the spoilage history of the various crops and the production record. Taro and Poi - Taro, a type of tuber vegetable, grows in either wet or dry soil. The root, high in starch content, usually approximating the size of a large sweet potato, is made into poi. It is first boiled and peeled, then pounded (if hand worked) or ground (if by machine) until a starchy gelatinous mass is formed. This is fresh poi, and is kept and used as needed. Poi is prepared for the table by mixing with water to the proper consistency. It is eaten cold. Poi is the Hawaiian equivalent of bread. It is the "staff of life" for most Hawaiians and many orientals, and is widely consumed throughout the entire islands. Besides being a basic staple of the adult diet, it is a valuable baby food, highly recommended by phy¬ sicians . There are two types of taro, the wet-land type (submerged culture) and the dry-land type (non-submerged culture). The former is more suitable for manufacture into poi. 1/Yet-land culture had been declining long before the war, due to crayfish infestation. 1/Vith the advent of war, laborers left the taro lands for more lucrative emplo^vaent on war projects with the result that taro acreage decreased. In the face of a greatly decreased supply, the demand for poi increased dispronortionately because of higher incomes and increasing use of poi as a baby food. In early 1942, the Price Control Section of the Office of the Military Governor established a ceiling price on poi. Taro, however, was left un¬ controlled. Poi grinders found themselves squeezed between the fixed poi ceiling and the rising taro costs. By the middle of 1943 three out of five of the poi mills on Oahu were operating at a loss. A detailed examination of the industry was uiidertaken by OPa in response to a request by the poi grinders for an increase in the coiling on poi. The investigation revealed I • ’ ■ ■ liBivTiaw ■'I' 'i''i'-■■?•,• '• — ■1 . •' ' r \ k'.tirvmaarr': ' r ■•*■ , » •'. ■ VMlm :-W- rriv ,: —«!, . '» ■• • ' <^*V . ' \ !b'"- •'/‘t-■■ ■■•'■..''A ' ■ _ -tel lii • • ‘ ^ I . , ; \ A (' Af*' ■ <■“' .•'' ,,.' ^ V ” y '-^jy'"•' y^'" '■' ''A ■ 'i'a •••", ■ .At r>^.y y *. V‘. ■ A \ •'1 ' > ' •St y " s-u. rK ^‘■■"y^yy N>/ , .'t: .► .t. •■ ,"' ■' r’if.. -';■ W'^ ' ', » ■/ ' "'h 1 ^ • '.' v'-,.jf*’ .'f’" .\\n> ?* Vv ■'j\ ' A 4,''i' •■> , j ' • '* '> ' '., i ^v';-S ? '. ^•t' ' i / ' i > •.V i 'i'.^ ■ ;'•■ '^5A 'h .t»'-i i: > . •.,’/ ’>V ‘ •3;^. • , .'j.A„.-vyr ■ a! ' -yjL.: • '■••'-A t- A*® ; ' *v ^ V'- t 83 “ that there was intense competitive bidding among the grinders for the lira* ited supply of taro; that there were too many grinders for the very small amount of taro available, and that on the whole the methods of grinding taro into poi were primitive in the extreme. Test runs at the various poi mills on Oahu, Kauai and Maui were made to ascertain vrith accuracy the amount of the yield. In order to eliminate competitive bidding for taro, ceilings v/ere set on taro. A decrease of 90^ per 100 lbs., was effected for taro, and an increase of one cent at wholesale and at retail was granted for poi. Meats - The moat schedule at wholesale was divided into two major sec¬ tions: (1) meat imported from the mainland; and (2) island-produced meat. The pricing method for imported meats was a cost-plus system, common to all territorial wholesale food schedules. It provided for a landed cost based on invoice cost at point of origin, mainland rail freight, a limited amount of cold storage at San P’rancisco and specific amounts for refrigeration and deck freight. To this specific dollar-and-cent margins v/ere added for va¬ rious packers’ products. The second section of the schedule set dollar- and-cent prices on all Island-produced carcasses and wholesale cuts at both the slaughterer’s and the wholesaler’s levels. Carcass prices com¬ pared favorably with mainland prices. At the retail level extensive cutting tests were made, as a prelim¬ inary to framing a schedule designed to yield to the retailer approximately a margin of 25 percent on selling price. It v;as necessary to ascertain the total yield from a carcass and price the various sections in such a manner as to aggregate the desired margin. The allocation of revenue as between cuts required close attention to the volume of movement of each cut re¬ flecting the consumers’ demand. The end result was dollar-and-cent ceiling prices per pound for all cuts on all islands. The zoning system, described 84 - above in sections on groceries, applied to retail sales of mainland meats also. Mainl and Eggs and Dairy Products - Specific margins vrere set on eggs and dairy products. The net cost was used as the basis for the dollar- and“cent margins allowed. Butter v;as given specific dollar-and-cent ceiling prices. Island Fish - The island fish schedule for Oahu was originally pre¬ pared by the Office of the Military Governor, and was worked out v/ith the advice of the Hawaiian Tuna Packers, the largest concern in this industry. After the outbreak of the war, fishing came practically to a standstill in the Islands because of the elimination of the Japanese fishermen and the restrictions upon off-shore activities of other races. The diet of the Islands calls for "fish and poi" as prime requisites, and from the beginning one of the items of greatest scarcity was seafoods of all kinds. Loss of weight involved in cutting was carefully considered in setting ceilings. This differed according to the type of fish. Enforcement prob¬ lems in fish were always extremely difficult. This v;as due to the scarcity of fish in the face of a great demand since fish is basic to the Hawaiian diet. Y/omen's Girls* Wear & Accessories, Men’s & Boys’ Vfear - These sched¬ ules covered sales at wholesale and retail for all women's and misses' and men's and boys' wearing apparel upward from size 7. At wholesale the mark¬ up cost allowed v/as 120 percent of landed cost, or 125 percent of the manu¬ facturer's selling price on every type of garment. Each wholesaler had the right to choose one of these methods, and he had to file with the Office of Price Administration a statement showing which method he had elected to use. Having once made a decision, a wholesaler could not change v;ithout permission of 0?A. Alternate methods were provided because some wholesalers found it 85 difficult to calculate thoir "landed cost" and otheis expressed a preference for a markup on landed cost due to the variance in shipping costs between different items of apparel. At retail the markup varied according to the merchandise and according to the source. The women’s wear schedule had classification groups such as: (1) dresses, coats, Jackets; (2) slacks, sweaters and blouses; (3) underwear and nightwear; (4) foundation garments; (5) millinery. The men's wear schedule had four major classifications: (1) topcoats and overcoats; (2) suits, sweaters, underwear, shirts, etc.; (3) work clothes and active sportsv/ear; and, (4) handkerchiefs and accessories. In pricing any article listed in the schedule, the retailer found the article in its proper classification and then used the appropriate multiple figure, depending on the type of purchase. The schedule provided a set of four markups for various typos of purchases. 1. First was used for direct purchases from the mainland manufacturer, and provided a markup percentage on the manufacturer’s selling price. For example, a dress bought from a mainland raanufacturer would be in the first classification and the retailer's ceiling price would be 175 percent of the manuf act’uror ’ s selling price. 2. The second method vias used for purchases from a mainland wholesaler or Jobber and provided a lov/er markup. This same dress would have a ceiling price of 157 percent of the v/holesaler' s invoice price. 3. The third method was for purchases from local wholesalers, jobbers, or local manufacturing-xvholesalers or manufacturing-retailers. The dress cited above would have a ceiling price of 152 percent of its invoice cost. 4. The foiu-th was for purchases from local manufacturers, the retail ceiling prices of which were 170 percent of their invoice costs. n .. .-.m " ^ » » t Aj>"u .'I'i- nitnl* ^ • > V‘ -iit' IV^* '.r''3'-•• jild|t>CTliiA[.‘life W.7 ,,<^p ' '»' ^l^'WVrt, t '1 ‘4’ *. v'»lt ITT V. :. M ^rt**t|! ,.6 i< '. • .'.%’r-KA3i*!i t'.v-#,<.,>j» /r ^4' 'i ' . .: •'r*-»i*l>^M**|i ’» ¥*^r^^vvt; tOB :-'<- giilMi ■ '" . : . ■;,, in,;, luw •. i-.vt^ I." tS; ‘;.^>» ,'^rTi,(ii ?'V>4 |WwIm(» ,t-.xa.Mm j&lfet (S) ’' ^«J r-a *' ., . ■ f\/' ixJkJ g „ . ^ “v. ■ . £*^■^y"ii l» *41. I»VV|/ wf# .y# ^'» y ^_ ,' ' ',5 • i ''t. “iof fli-^vct toi'i ;-j'-ijfts , -. **!{/•'' . -jji %r^£*4i»4 ■** r:o*i' .•**>•.>* r- ?.» BJ*** ^1 .' }. - -V. ’ 9 r f ^ ^ %r*! . t * .Wc iM vitw t tfi ' , ' — 'V'K . ' .^ ' isf 9i ^ li. '-'t.' 8 L-. .*'!*/--!. ; «tri, an . 'u p — g - . vfttfrv ; ifctr ‘tnlWnai i.'./ ■rt.'-ri :£174 c; ■ f? Y '• t(4..s- *jr .iP -AT; ^.5>’f*i/fr. T» 'ksr*.f >: ti4 f/ U?,' ^ 1 t(f Bdii 1)lj Cl > 4 f/•.'*.) flw ir#*'’ so'it ' •■' .''v'o M ■) ' .* *■ i.f,-* ' " K r /'It IP i/' jt*'*..'*:■ ,'i!4fi'‘i,/*lyr' (-. • ■. •’ »> « . V/i ’ 'J^m ntjv* ,« 7r .‘A**-*, •••r^ I*.- 1^ \_ 'i . ■•.' ^ ’irf 3? •qi«jvrJ ' • "4^•'■2 f. ai:t :r": ■ jm. ■ i*ac 4b^4< jif' N ;>■* ►A 86 - The result of these methods v;as to maintain uniform prices at retail for similar merchandise, regardless of the type or source of purchase. The more directly an item was bought, the higher the markup, as shown above. The schedule also provided for special pricing of job-lot and end-of-season merchandise upon appeal to OPA. Because of the qualitative differences between merchandise and the almost complete lack of ’’standard” staples in this field, no dollar-and-cent peilings could successfully be placed at retail, and the price control from wholesale to retail had to remain on a percent, or markup basis. Shoes and Slippers - Shoes became an increasingly important cost of living commodity in the Territory after the influx of war workers and service personnel had considerably increased the population. Many natives and orientals who formerly did not v/ork and remained at home, wore no shoes or wore tabis, slippers, and other oriental types of footv/ear. Their higher standard of living increased shoo purchases to some extent. Shoe ration¬ ing on the mainland made itself felt in Hawaii by the dumping of many odd makes and sizes on the Hawaii market. The General Maximum Price Regulation held all shoes to the April 1942 price level, but this was found unsatis¬ factory, due to up-grading caused by the introduction of these unknown makers. The shoe regulation set percentage markups on cost at v/holesale and retail for all v;omen’s, misses', men's, boys', and children's and infant's shoes and slippers which were imported from the mainland. The maximum wholesale price for all shoes and slippers was 120 percent of "landed cost” as defined in the regulation. The maximum retail prices v;ere based on stated markups over invoice cost, as in the apparel schcuules, and for the same reasons. Three sets of markups, providing for various types of pur¬ chases were as follov/s: i*) . a.^ iltf-i-- ii^ ; i i*jr ‘nMT r ■it. ,.<■ "a • .V ryv '^ ■-. ^ • •• ■ ■ - ^ r.-, . . ■ '.:_e •«. V»‘ ^ ♦*■ '■•'■ ■<* • ►yv:' # ' ^ - rv-v V,j!^ ... •d! til. » t*f Ol'H' ^ ’- 1 . 1^ ■n "l ii'. xr,. = ■* if r.vy^fiv'r:-’,^.- -., 7 ;:/?.- 'V ' .. iC. ••‘H'ltt < >r .■■■■- J“ '■ T ' I T . 1 • -ii • \> • * i" r .. A'lUf'i ■ •.i'.i'iV'X. • ! Vj(: «ivf. A 87 1. The first was for direct purchases, or drop shipments, from the mainland manufacturer, and provided a ceiling price of 175 percent of the manufacturer’s selling price. 2. The second was used for purchases made from a mainland wholesaler or jobber and provided a ceiling price of 150 percent of the wholesaler's invoice cost. 3. The third was used for purchases made from a mainland v;holesaler or jobber and provided a ceiling price 150 percent of the wholesaler's invoice cost, plus certain transportation costs as defined in the regula¬ tion . Nationally advertised prices in effect on the mainland were maintained by several stores with the permission of the Office of Price Administration. Lauhala and Lauhala Products - Lauhala is a processed loaf of the native hair, tree and is used in weaving baskets, bags, table mats, and other sou¬ venir goods. The leaves are stripped, dried, and in some cases bleached before weaving. Originally this work vras done by the Hawaiians, but with the influx of war workers and service personnel, the demand for native handicraft became so great that many other people v;ent into the manufacture of lauhala products, especially the Japanese. The work is usually done in the home, and prior to the war, sold at very low prices. With the increased demand dealers came into the picture, buying the entire output of various weavers. Those dealers in turn sold the products to other wholesalers, each adding a substantial profit to the v/eavers' price. The result of this double and even triple wholesaling was greatly inflated retail prices. Dollar-and-cent prices were set by the regulation for the producer, and gave a markup on cost of 120 percent to a single wholesaler and retail prices were figured on markups on cost of 50 percent. ( ‘ M. 'J.-.'U-IS'.-!^ ^-^tl« ^ ■ ^vwfei^f* a-^' M U'.;?, 'yr^ (»4y ' ^ *1 ■ r, _ 'i' A‘t‘; ohm^ >r>Mt i^y. .fifr;:r«Jt* . ;*•'■ -i*? ’jr ;o. :r. :-. Jii fa • ^ ■• fcaitiv^ 6,. ■ w^ 3 r,f ' 5r.- ■ " y »'• t' ,J ’ .. />;-■' >;. ndt ool’^^ ^«^•^i->•T*^.,ty‘|. rDctfof; v^*. t-' ► A// *» ,Tif SJ^ v•c^•• KiflTl'.'tltOff v-::< , * *7 • ■ . . '.A ■ .'‘ ''O * f. ■.'> . .S' i^-, ♦ .• . lie'll U ^.7 *;’*'’* ' -V ''. , '. .. ‘V "i - ^/-^£ li4?|<^-- ^VT ¥■ k1 ■..‘•W, . ,^. ^-^^i] -I- r wlfCk teu. "T r ;)fc iiaa^* «i ^n; MmA Si9iiaif »«p/jb ^ <1 M lio* tfwe-iiLjv •. i^H'ijft ^ ad? .einK*^ YiiVftV . r ■: < '- * ^nv- ^>ti\fit^yir,rti ai*j if^ic rjito -rioijd #!UiteJA5Lcd • V ? •. ‘ >v , ' . • 'V-/ ^ ^ -tkVl ei p>.; «»# n*Dv/^>^;j «/. e^/^f * iu?. ili;u'' . ’RiR it^o iron • .«>*».•; oT *>.{ Ji.* .•j.av o-<^vt ■ *90 :^rirtf •'tuXI^V'i I '••-?«» ' ' J ■'•' ,A ,,■ ■i r ^ •.' i ! ■*’• ' 43l : .V. ^ fa . •-*> •»/Vi «»»'-■-■’n teu ««Uir« J-t .U r Z Qt "tv ^i«o .f" <30^ V/' xf/J^ * III 88 Jewelry and Certain Other Items - Tliis schedule covered all articles commonly or commercially known as jewelry, v;hether real or imitation; all articles made of, or ornamented mounted, or fitted with precious metals or imitations thereof; and certain other items such as clocks, cigarette cases and lighters, binoculars, field and marine glasses. At the time of its inception, the prices of jewelry in the Territory were exorbitant. In many cases goods passed through the hands of numerous mainland and local wholesalers before reaching the retailer. Under the schedule, the manu¬ facturer's selling price was selected as a base for establishing maximum prices at wholesale and retail. The wholesaler’s maximum price was the manufacturer's selling price, plus one-third. The retailer's ceiling price differed according to the type of purchase. Vflien bought directly from the manufacturer, the retail price was double the factory cost, l/hen purchased from a wholesaler, the retailers used as his maximum price the lower of the following: (l) two times his net cost, or (2) two and one-third times the manufacturer's selling price. This formula allowed the dealer a markup on cost of 100 percent when purchased directly, a markup of 75 percent on cost when purchased from a local wholesaler, and approximately 57 percent on cost when purchased from a mainland wholesaler. The retailer realized about the same dollar-and- cent price, regardless of the source of the purchase. Ho made less profit if he bought from a mainland jobber than when ho purchased from a local jobber, or from the factory. The manufacturer was obviously the cheapest source, and the Honolulu jobbers, operating under this schedule, had lower ceilings than many mainland wholesale concerns operating in this field under mainland regulations. Liquor - The problems of liquor control and liquor pricing v/ere extremely important in Hawaii during the war. Not only were there unprecedented numbers < * / ► A 4 { 1 89 - of service men in the Territory, but blackout restrictions, curfew, and war¬ time morale had all to a degree emphasized social drinking. Authorities strictly enforced the numerous liquor restrictions and had the whole-hearted cooperation of the community in so doing. Liquor stocks were frozen in Hawaii by the Military Governor on December 7, 1941, the day of the attack. All bars and liquor stores remained closed until February 28, 1942, at v;hich time they were permitted to open under restrictions laid down by General Orders No. 28 of the Military Governor. This order likewise froze all prices at the pre-war level. Liquor v;as rationed in the Territory at first by the Military Governor and later by the Territorial Government under the pov/ers of the M-Day Dill. Civilians were limited to the purchase each week of one quart of hard liquor, or one gallon of v/ine, or one case of beer. Iviainland liquor v;as on sale only from time to time, tlie supply being limited in the early months of the war by lack af shipping space, and later by rapidly dwindling supplies in the mainland. Under 0?A, liquor prices v/ere controlled at all levels, manufacturer and rectifier, v/holesaler, retailer, and dispenser. Prices for mainland bottled goods at wholesale and retail v/ere controlled bj/ a maximiam price regulation freezing all liquor prices at the December 6, 1941 levels. Spe¬ cific markups on cost for new brands (as outlined on the mainland) were as follov.'s: 15 percent at v/holesale and 33 percent at retail for hard liquors; 25 percent at v/holesale and 40 percent at retail for wines. These markups were all on a defined landed cost. Service Trades Regulation - Service trades were frozen to April 1942 ceilings under the terms of GMPR No. 1 of the Irice Control Section of the Office of the Military Governor. Other than the filing requirements, little li* 4 ‘ il - 'tt •* >. /V ■t*-' m -*■- .imv- J 1*^'' ft •%. ■ >- , »1 t.i. 'tit ^rvr -n * ♦ ■ v.^ ’ ^ *'"f I ri*n ^.>4 90 - attention was given to the service trades until December 1, 1942, when the Price Control Section issued i\(iaximum Price Regulation 20. This regulation followed closely the mainland OPA revised I'lPR 165. V/inter service trades and other seasonal provisions not applicable in Hawaii were deleted and Supplementary Regulation No. 11 to tlie mainland GMFR v/as incorporated, vi/hen the Territorial office of OrA assumed price control functions on Iv’iarch 10, 1943, MPR 1G5 was declared in effect. The enforcement and application of the service trades regulation was exceedingly difficult in the Territory since there was no wage freeze and thus a large part of the costs of service trades were uncontrolled. The wage situation was further aggravated by a tremendous labor shortage which could not be relieved to any great extent by bringing in labor from the main¬ land. A freezing of practically all workers in the Islands to their jobs in some measure alleviated the situation. Far more adjustments of service ceiling prices were necessary in Hawaii than on the mainland, for the reasons outlined above. In addition, maximum price regulations covering specific trades were issued. These are described briefly below. Power Laundries - This schedule, applicable to the Island of Oahu only, was issued on Juiie 23, 1943. It covered fifteen principal items of men's and women's clothing and household articles, comprising about 75 percent by volume of the work done by power laundries. Typical prices v/sre: men's dress shirts, 18p'; sailor ju:npers and white pants, 20;^ each; Army and Navy khaki shirts, 20<^; khaki pants, 25;^; sheets, 7pf; pillow slips, 4p'. Blackout of Automobile Headlights - Under a Genero.l Order of the Mil¬ itary Governor, issued shortly after the war, all headlights on automobiles were required to be blacked out to meet certain rigid specificatioxis. At the same time a specific price was set for this v;orl". Three successii'o modifications of headlight requirements were made. The last prices wore ^5 •li 4 , r t ? ' * ‘ ■ ■* - :’"i "”*'T JS^ HsyJtJitJljf’ ' .-xV -■»* '.^ ■ h^i ^ '"•f .'ir -#M«c; <4 ’ i /r O-Xe/^. » vtn . tm^iH -f'- >? r.- Ti- « 91 for a complete job of installing a light shield, painting the upper half of the light red, and blacking out the lower half (with the exception of a 3 / 8 " slit at the focal point). Now Lumber - Lumber became an increasingly important cost-of-living commodity in the Territory of Hawaii, due to the lack of importation and also increase in population, particularly on the Island of Oahu. Since all but a fractional part of the lumber used in Hawaii must be shipped in from the Mainland, the Territorial regulation provided for ceil¬ ings only on those types and sizes of lumber wliich v.'ere themselves under specific mainland price control through applicable Maximui.i Price Regulations. The Hawaiian ceilings were computed by the use of a percentage markup technique, based on landed cost. The percent of markup depended on the quantity of lumber entering into a given transaction and also on the method of its delivery. For a sale from stock from distribution yards, the celling price was 150 percent of the landed cost, if the amour^t of lumber involved was less than 1,000 board-feet, and 145 percent if the quantity was more than that. The ceiling for dropped shipments w^as 110 percent of the landed cost for any size sale. For lumber deliveries in Hawaii, there were customarily free delivery zones, comprising the territory v/ithin a five-mile radius of the distribution yard. Charges for deliveries outside this zone could be included in the computation of the ceiling price for a given transaction. Although prices on lumber sold in Hawaii v/ere brought under ceilings on November 15, 1943, lumber dealers were given until November 30 to file a comprehensive report covering their delivery charges, their inventories, and list prices for all but inconsequential items of their inventories. Second-hand Lumber - Second-hand lumber became very important due to the shortage of new lumber. Second-hand lumber prices, previous to being V I s I I ; * (* 92 - regulated, v/ere higher than prices would normally be for new lumber were new lumber available. For instance, used lumber was selling for as high as 4130 per thousand board-feet, as against new lumber selling at ^81 per thousand board-feet were it available. The second-hand lumber regulation covered all persons selling second¬ hand lumber, either at v/holesale or retail. It covered all lumber that had been recovered as salvage from any source whatsoever . Second-hand lumber for the purpose of this regulation was broken dov/n into five clas¬ sifications, as follows: Firewood Salvage Reclaimed Common refined Clear refined with specific dollar-and-cent maximum on each classification. Second-Ha nd Automobiles - The prices of used automobiles in the Ter¬ ritory of Hawaii increased rapidly during the war. In l.,/<;:3 sales in the Territory indicated that prices for popular 1941 model cars had reached a point 33$^ above their original prices when nevf. This v/as true of older models, although to a lesser degree. Despite the fact that used cars continued to depreciate in value, selling prices continued to rise. Used cars were important in the Territory where they provided the only means of transportation for vast numbers of essential v/ar v/orkers. Like¬ wise, the supply of used cars was limited, since none could be shipped into the Territory. A meeting of all used car dealers on the Island of Oahu was called early in 1943. Doalers appointed a committee to represent the industry in working with OPA on a price regulation. Maximum dollar prices wore provided in the regulation for each car model and body type for all years 1935 through 1942. Cars older than the model year 1935 could not exceed the maximimi prices for the most comiparable % ' A **^-11 u .AT#r J|»V 1 ia’ '' ■ ‘■'>^ v-’» •-■;^’ V^Mf■-'■'X- --Jit- .■:'jr»A-'|j|K#«-‘^. ■ '-'i ' y \ I;!*? >%ii‘ .Ml •: i^.v. ri>v.t'^* WiJ. •• ?' . I*"-?*>!''...y I .*.f #/i •:■•.. <« r.i-'v^KN ••- f».f*i ; v - ■ -'.'.rTr'/Ar, ■ *(w' ;tir ' ♦iM Hi ft ' , ►», - • ip*< . .<>1 -- ..! * . ? n - 1 »'4.»t' f . «#. itf '*■ )•- • , hi "A e *» ■ V t :“iA •• »« •» I ' ^t J? !•'. *■ - t- Ifik’ . . />v A.wl * ' • •“ A * ♦lip < t -;il 'r- 0■•' n r... _ • 4 • * f- I « , •• •.UflJ.T • . \ >ii Hi -4^ * n 4.%!ii.«.‘ i. 0 iin»^ iif f . v;4 hU*^f^ r u-‘*i .,'■'. I 4*6* 93 - 1935 model. Dollar "base prices" for 23 makes of cars, divided into approx¬ imately 3,000 body types, were provided. Certain "built in" items v/ere listed T/ith specific additional alloxvance. For exariple, radios carried an extra JfrSO v/hich was added to the base price . The regulation covered all sales of used automobiles, whether by individuals or licejared dealers. The "base price" listed in the regulation v/as the price at which an individual might sell. A dealer had to sell at this price if the car was unv/arranted. If the dealer, hov/ever, gave a v/ritten guarantee for 30 days or 500 miles, whichever first elapsed, he could add ^100 or 20 percent, whichever was larger, to the base price to calculate his maximum selling price. "Base price" in the regulation was calculated as follov/s: the retail price for California as listed in the National Automobile Dealers Associa¬ tion's Blue Book v/as used, to v/hich a determined differential for freight was added. This differential v/as determined as follov/s: For 1941 and earlier models, freight was computed at rates in effect on October 1, 1941. For 1942 models, current freight rates wore used. The amount of freight thus determined was then in each case multiplied by 1.33, follov/ing the historical practice in the Territory of taking a .markup on the freight in the sale of nev/ cars. To the results of this computation a depreciation formula v/as applied. This formula was based on the relation which the California price of each used car bore to the price of that car v/hen sold nev/ in California. This used car regulation carried a provision which called for a 2 per¬ cent quarterly depreciation rate commencing April 1, 1944. This reduction in maximum prices v/as intended to take into account the wear and tear on used automobiles to discourage withholding of little-used curs from those with essential needs, and to provide for an easier transition to normal > •" » . ■ • ■ . I ' s 1 ■ ^ ■>’;% ■ ••;- • I f^ ?r' '•■ . . , ) ; . 'h. ^ n I 4'. • . ° i j-;; .*“., ft . \.i j- \v .i ■‘ ^i'-. ■■^'■:'^ ■ i ■; -.5 / t ' • • ^ r rt^i J * v '• • _,V n i ■ V r-w • I t. ■^' •S' *> 1 V / i,. '*> >\'i f-A.? ^ •' I ’'A ;; ‘^V' JL*'. ,s. ■■■} K ^ A x*. I V 1 / I'. :r f . s' , -j -r ’ : i i. 94 - values after the war. The effective date of this regulation was Docenber 1, 1943. ADJUSTMENT PROCEDURES Prior to the appointment of a Price Executive for the Territorial office, the fixing of prices for new commodities and the adjustment of ceiling prices was done by an Adjustment Comnittoe composed of the Di¬ rector, the Chief Counsel, the Price Attorney, and the Chief Economist. A member of the legal staff acted as secretary of the committee and pre¬ pared letters informing applicants of action taken. Memoranda for the cojTimitteo were prepared by various staff members, recomraending action and substantiating the recommendation with suitable data. Thus, the Adjustaent Committee acted both as a price and policy group, determin¬ ing from time to time criteria to be follov;ed in certain types and classes of commodities and trades. To a largo extent, mainland criteria were follovv'ed and such margin data as were available v^ere utilized. In January 1943, a docket system v^as instituted for the Adjustment Committee, dividing appeals into three groups: fixing of new prices, ad¬ justment of ceilings, and service trades prices and ad jus'xr.ents. Later on the Adjusti.ient Committee met only on special problems referred to it by the Price Executive. i % . X ^ r ► . t I «... -’ll O 95 - RESULTS OF PRICE CONTROL Until the advent of the OPA in the Territories, there had never been any data available for these areas on the cost of living. The OPA succeeded in securing funds to assist the U. S. Bureau of Labor Statistics in setting up a cost of living index for three cities in Alaska, for Honolulu, T. H., and for four cities in Puerto Rico l/ (See tables I, II and III.) Unfortunately there are still no data for the Virgin Islands showing changes in the cost of living during the war period. The indexes for both Hawaii and Puerto Rico shov/ changes in the cost of living since the Office of Price Administration instituted its controls over prices. For Alaska, however, the index covers only the period from March 19^3 to September 1^45• March 19^5 was some months after the OPA office was organized there, although it is about the time vdien the Price Division started replacing the over-all controls originally used under the Alaska MPR lOl;^/ ^ith specific controls over individual commodities. In Puerto Rico the OPA held the increase in the cost of goods and services to 9 percent for all items and a little more than 9 percent for food up until June of l'^i 46 . During the early years of price control several important food items were l/ In Honolulu and Puerto Rico this project has been continued by the local Departments of Labor, In Alaska, unfortunately, the index had to be abandoned in the fall of 19Lj.5 for lack of funds, 2 / See section on Price Control for explanation of the type of control exercised under lilPR l^U* \ (i -- 96 - subsidized by the U» S. Department of Interior, This subsidy v/as removed in late 19^5 ceiling prices had to be increased substantially. With the weakening of the Price Control Act the increase from June lo46 to January 19U7 was 26 percent for all items and 5^ percent for food. Clothing prices were only 3 percent higher in June 19U6 than at the beginning of OPA specific pricing. From June 19U6 to January l^U? clothing prices jumped nearly 7 percent. In Honolulu the overall increase in cost of goods and services in June 1*514.6 was only 6 percent above March 19l*-5 v/hen OPA took over control from the Military Governor. Food increased less than 3 percent during the same period. In the six months following June I 9 I 46 food increased 39 percent and the overall increase was 19 percent. Clothing increased during the six months follovdng June 1014.6 slightly more (S.!; percent) than the increase (7»1 percent) during the entire period from Jferoh 19143 "to June 1046 . For the period for which data are available (March 19li-3 'to September 1914-5) the 3 cities in Alaska the overall increase was 3 percent in Juneau and Fairbanks and 5 percent in Anchorage -with a similar increase in food prices. In all the Territories the largest increases were found in the miscellaneous group. This group includes such items as transportation, medical care, recreation and personal care, over which the OPA had no powers to control prices under the Emergency Price Control Act* Vftiile There is no actual cost of living index for the Virgin Islands, a comparison of prices in June 1*545 with prices in 1*542 of a group of food items indicates an extremely effective control over food items. This comparison of prices was mnde by the Virgin Islands OPA office and are the only data available by which to measure the k I- • ■ ■ T. « :«4. 'teAl •wj -f i* 97 effects of price control in those islands. (See table IV), The const of living indexes and comparisons of prices are the statistical measurement — or the tangible evidence — of the results of price control in the Territories and Island Possessions. There are the "intangilbes” , however, that are just important and in some ways more important. The attitude of the public toward OPA is perhaps an even more accurate measure of the success of the OPA. The OPA in the Territories had the support and cooperation of the local Territorial Governments, the labor organizations, leading civic groups, the newspapers and the general consvimer. This public confidence developed from an original attitude of skepticism, some natural resentment to "outside inter¬ ference from the Federal Government", through a period of watchfulness until the people themselves were convinced that the OPA was necessary and was securing results. Perhaps the most important result of the OPA operations in the Territories has been that it provided an "'experience in democracy. For the first time, the people were given an opportunity and encouraged to particate actively in a Federal program that affected every indivi¬ dual. This is perhaps best expressed by a quotation from Dr, Caroline V7are, who spent the summers of 19^5 1 ^ 14-6 in Puerto Rico teaching in the University! "The OPA is, so far as I can learn, the first real example of community organization in Puerto Rico, the first attempt to build a structure in each community which is representative of the groups and interests that make up the whole community, and to reply upon such a representative, voluntary organization to know the needs of the people of the community, to articulare and to build public opinion. ^1 98 - and to help see that the needs are served*'. A similar thought ivas expressed in a report from the OPA Territorial Attorney in the Virgin Islands: ** A review of the activities of our three Local Boards for the first half of the year show a splendid record made by these unpaid employees* This is true in rationing as well as in price matters. Members and volunteers are well integrated in the OPA program - a Federal program. This is highly significant in any small community, but more outstanding here where democracy is only 20 years old, and civilian participation in governmental affairs is very much younger. The United States never ’'advertised” here before OPA came. Social attitudes are definitely and gradually reversing, and a feeling of genuine kinship is unconsciously supplanting that of being a mere alien appendage held for purposes of military security only. The social implications are manifest - they cannot be over-evaluated. For this stop fonvard in cultural integration the United States must thank OPA. This experience was no less true in Alaska v/here community feeling is exceedingly strong, and in Hav/aii v/here all racial and economic groups contributed so much as volunteers to the success of the OPA programs. The success of the OPA in controlling effectively the prices in the Territories has been due in large part to the confidence, the support and the active cooperation of the people of our far flung Territories and Possessions 99 - MLE I PERCENT CH/iNGE IN INDEX OF COST OF GOODS /iND SERVICES IN /ilTCHOR/.GE, FAIRByjTKS, AND JUNEAU, ALASKA March 15# 19^5# "to September 15, 1^14-5 yoichorage Fairbanlcs Juneau All Items 5.1 2.6 , 2.6 Food 5.6 2.7 2.9 Clothing 8.5 I+.o 5.8 Rent 1 .1+ 0.3 0.1 Fuel and Electricity -i+.o -h.°y -12.0 House Furnishings lii.6 8.1 7.5 Miscellaneous 6.1 i+.l 6.0 1/ Ice is incluied in this group. 1 / I,., I ' J \ i J- t ■J k.' £ > /• (I 't: / I / - 100 - TABLE II INDEX OF COST OF GOODS /JID SERVICES, HONOLULU, T.H. (March 15, 10^5 - 100) Indexes Percent Change - I2/15A6 6/15A6 5 / 15 A 5 to 6/\3/U6 6/15A6 ■ I2/15A6 ^JLl Items 126.5 106,0 6.0 1^.5 Food 145 *0 102.7 2.7 5^.2 Clothing 116.1 107.1 7.1 8.4 Fuel-Light Refrigeration 105.7 100 0.4 5.3 House Furnishings 117.7 186.1 6,1 10 .Q Miscellaneous II 8.5 111.5 11.5 "6.1 Transportation 107.2 o 6»3 - 5.7 11.5 Medical .Care 121 .« 112.6 12.6 7.5 Household Operation 115.1 104.2 4.2 8.5 Recreation 124.6 120.5 20.5 3.4 Personal Care 121.0 11^.2 1«,2 1.5 - 101 - TABLE HI INDEX OF COST OF GOODS AND SERVICES, PUEP.TO RICO (March 19i+l = 100 ) Jan« 1014.7 June 10146 All Items 182.5 151.9 Food ^ 217.5 167.5 Clothing 157.1 147.1 Rent IOI4.O 104*8 House Furnishings 151.6 146.5 Miscellaneous 147.1 136.7 Percent Chan ge June 10[4E December I0I42 June T5, IOI46 to 6/15A6 to Jan. 16,10^7 145.4 0.0 20,1 154.8 9.5 29.9 1L4.7 3.1 6,8 104.9 1.0 - 114.6 8,6 3.6 136.8 12.8 7.6 - 102 ) TABLE IV COMPARISON OF PRICES OF CERTAIN BASIC COMMODITIES, ST. THOMAS, VIRGIN ISLANDS (October 19^42 and June October Present Price Coramod ity Unit in42 (June loi 7/heat Flour,, bulk, hard or soft lb* $o,o6 i 0.05 Cornineal n . 06-07 .05 Rice, all types It .12 .06 Cheese, processed, Cheddar, loaves of or over " .^46 .48 Milk, Evaporated, 6 oz* can .06 .06 Milk, Evaporated ihi oz» t1 .12 .11 Salt Pork lb* .21 Salmon, Chinook, ^(-1 can can .1*0 .38 Tomato Soup, Premier, t- 1 can n .12 .12 Beans, dry, red, kidney, imported lb. .12 .09 Beans, lima, dried, imported ft .12 .09 Garbanzos, dried, imported It *12 .09 All other imported dried beans, all grades n .12 ,08 Pork Fatbacks, pickled ’ fi ,18 .10 Lard in tierces and cases »l .26 .20 Salmon, Red, Alaska, Sockeye, =^1 can can .k2 Salmon, Chum, -•^•1 can n . 22-,23 .19 Laundry Soap (bar) ' bar *ie .12 Campbell^s Vegetable Soup, tin tin *12 .16 Tomato Juice, Libby’s, 42 can can .15^114 .17 Sausage, Vienna, Libby’s, U oz. can tl ,lh .16 Potted Meat, Libby’s, 3‘4 oz* can T» .07 *09 Tea, black. Premier, "I- lb# pkg* .32 .34 Peas, Early June, Premier, 42 can can •21* .25 Corn, Sv/eet, Premier, =l'2 can It .10 .22 Salt, table. Premier, 2 lb. pkg* .11-.12 .114 Cocoa, Hersheys, 8 oz* can can .22 .25 Sv/ans Down Cake Flour, 2~5/l; lb* pkg. .32 .38 Ivory Soap, Large oake .16 .15 Sugar, granulated, bulk lb. .08 .07 Sugar, yellow (brovm.) bulk •I ,06 .05 Coffee, Regular and Drip (Premier) ^-1 ft .ii2 Toilet Soap, Lux, Regular cake *09 .10 Codfish lb* • « .18 Milk, fresh, per qt* qt* CVJ • .12 Bread, 1 lb* loaf lb* .12 *12 Kerosene, U/5 quart b ott le .05 .05 - 103 - raticwing RATIONING authority OF REGION IX ’Thile the Territorial Offices were actually District Offices in the OPA organization. Region IX and the Territorial Offices were inde¬ pendent of the National Office in carrying out their rationing functions. This vms accomplished "by a General Order for each Territory. The power to ration was delegated to the Territorial Director in each Territory subject to approval by the Regional Administrator for Region IX. These General Orders made the Regional Office a ’’National Office” with respect to the Territories and Possessions, having all of th>3 duti'?.''. ard ^’esponsibilities which the National Office had with re¬ spect VO ehe states. The distance of all the territories from the mainland created constant comunication and shipping difficulties, and any condition which might actually involve rationing had to be anticipated before it became critical. Surveys and research were constantly being conducted in all the Territories. Meetings with trade, industrial and civic groups 1 / The authority for the General Orders referred to is derived from The follovring Vfar Production Board Directives; 1. 2nd Revised Gen. Orders 20 (Puerto Rico) and 21 (Virgin Islands) were issued pursuant to vr.P.B. Supp. Directive 1-J, effective 7/l/42. 2. Revised General Order 33 (Canal Zone) was issued pursuant to V, P.B. Supp. Directive 1-L, effective 9/l0/42. 3. General Orders 47 (Alaska) and 48 (Hawaii) were issued pursuant to W.P.B. Directive 1 - except that subsequently ( 8 /II/ 43 ) F*P*B. Supp. Dir. 1-V was issued for Hawaii. 4. All above orders were superseded as to foods by Vfar Food Order 68 for Puerto Rico, Virgin Islands, and Canal Zone and by Vfar Food Order 57 for Alaska and Hawaii. - loU - ► were held frequently. Close and continuous Cooperation was maintained with other government agencies and territorial officials in order that the office could be well advised at all times on the state of local supplies and inventories of essential commodities. rationing policy The rationing of commodities in the Territories varied from the National program in accordance with the special needs of each Terri¬ tory. Each Territory had its own ration orders for the commodities which were rationed in that Territory, with the exception of bicycles (Revised Ration Order No. 7 was applicable in all territories) and automobiles. Automobiles v/ere rationed under RO 2A in all Territories but this order was administered by Region IX rather than by the Nat¬ ional Office. The rationing of typevn'iters under RO 4 a was abandoned in all the Territories except Hawaii at the same typev/riter rationing was terminated in the States. Amendments to ration orders frequently originated in the Terri¬ tories. Tl’hon local conditions dictated that a change was necessary and the proposed change was acceptable to the Regional and National Offices, the entire situation was studied carefully by the Territorial Office, surveys made when necessary, and an amendment, or on occasion, an entirely nev; ration order was drafted and submitted to the Regional Office for approval. Sometimes substantial changes were made by the Regional Office before the regulation or amendment finally went to the Federal Register. As an example of a Territory-origanatcd order, a situation arose in Hav/aii v/hich called for the rationing of used passenger automobiles locally, although such a program v:as never undertaken on the mainland. ""T \ T* ’■1 I i \ t \ - 105 \ Every aspect of the problem was studied before a decision was reached by the Territorial Office as to the necessity of rationing this commodity in Hawaii (RO 2C). Changes in the regulations which originated in the Regional Office were usually occasioned by a new procedure evolved by the National office or a new turn in the supply situation V\rhich necessitated drastic change in rationing procedure in the Territories as rvell as in the States. ALASKA The setting up of the Alaska OPA office and the transfer of the rationing program to it occurred on May 18# 1942# at the time the pr' ce control program became effective at the retail level through- cuv cho country. Only tires and tubes and automobiles v/ere rationed at that time in the United States. Trucks and busses never were placed under the rationing program# but remained purchasable on a system of priorities set up by the OUT and the TJPB. These two agencies cont¬ inued for several months to handle thoir programs in Alaska through the Governor’s Office. Since the public never formed the habit of differentiating betvreen government agencies# the Alaska OPA office was alv/ays on the receiving end of numerous inquiries concerning ODT and VJPB operations# until, in sheer self-defense# it got a collection of forms and regulations and took on the job of disseminating inform¬ ation and distributing forms for both ODT and VJPB# on a purely volun¬ tary basis. In the late fall of 1942 the Territorial OPA office# acting on the urgent request of the Office of Defense Transportation, took ove'r the Btiporvision of taxi operations in the Territory. A provision v/as J - • iv; rSii: lii» itii| ' ‘ v»] ', ■ f "•:.*-j;i -.*i* V;. ■.»«» .4' >o4lBl^ &'3isM r V’.tm€ mm i‘V^T *»;u • * \ A • !••••’ " .« - .n ^ * ri- V#w ^ - 106 ■written into the new Rationing Regulation setting up compliance with all ODT requirements as a condition necessary for tire and tube eligibility. The supervision of taxi operations became an additional du'ty of the Rationing Executive, who set up forms and procedure and immediately conducted, by mail, a training course in this important work for Board Clerks* The assumption of this extra work-load added materially to the responsibility of both the Territorial Rationing Division and the clerks in the local board towns. It also added a full share of headaches, for usually taxi operators were in no mood to be regulated and every Board Office became a battle ground on which many a vigorous scrap was con¬ ducted. The OPA office received no compensation for this work, but took it on willingly to avoid the necessity for another government agency having to sot up duplicate machinery in each town, vj-hich would have been necessary had not the services of local boards been requisition¬ ed for this work. TIRES AITD TUBES The gasoline rationing program set up in the States v/ould not bo applied to the Territory, and the old rationing regulation v/hich it superseded vms cumbersome and difficult of administration. The Alaska OPA office therefore, in the vi nter of 1943, wrote a now regulation for Alaska (RO iP), secured its approval by the National Office and built its tiro and tube rationing program on its provisions. The ad¬ ministrative procedure vms greatly simplified under this regulation, a nevi streamlined list of eligibles was established and rationing auth- ori'ty and procedure was more strictly defined, so that for the last three years of the program it worked with greater smoothness and efficiency. * « (I BICYCLES AND TYPE'/JRITERS The bicycle rationing program was added to OPA’s operations in July 1942, thefirst allotment being 40 for the two months period ending Sept¬ ember 8th. This was never a complicated operation although it had to bo learned and administered and ration board clerks from Ketchikan to Uomo had to be trained for handling it in the various tovms. The typov.Titer rationing program which also made its advent in the summer of 1942 was both difficult to interpret and complicated to administer, but the available staff of 4 — a director, assistant direct¬ or, stenographer and general clerk — attacked it v/ith vim and vigor. The number of dealers in the Territory was not large, and most of them had disposed of their new stock before any awareness of the rationing regulations had been created. The tremendously increased demand for typewiters gave enormous impetus to the sale of used typewriters, both by dealers who bought them up from private individuals for purposes of resale, at greatly inflated prices — before theprice control program in¬ tervened — and by private individuals, who sav/ opportunities for un¬ loading machines of ancient vintage at top prices. One instance was found of a dealer who brought in a largo number of ’’Spanish keyboard” typewriters from Mexico, reconverted them to the English stylo and offered them for sale at tvdee the price nev; American typevariters were selling for — when they were available. His activity v:as promptly terminated by the Enforcement Division. TERRITORIAL R/.Tia:iITG LEGISLATIdi One of tho immodiate results of exempting Alaska from the general rationing program vms tho tendency of Alaskans to ship outside, to re¬ latives and friends, commodities which v/oro rationed in the States. (i - 108 - Transient workers, returning to the States after temporary employment in Alaska, filled trunks with sugar and coffee, cases of butter and canned goods, and hundreds of pairs of shoes and rubber footvrear pur¬ chased in theTerritory* This considerable flow of goods was known tf be going outside, eit,her to be sold on the black market or to supply friends and relatives with contnodities difficult to got in the States. Boat crews on vessels plyning between Alaska and Seattle, fishermen returning to homo ports in the States joined tho ranks of those parti¬ cipating in this minor racket. This practice had tv;o very serious evils. It tended to v/ithdravr from Alaska supplies virgently needed vrithin the Territory, and it led to violation or evasion of rationing regulations in tho States. The Alaska OPA office in tho spring of 1943 therefore took cognizance of its re¬ sponsibility in this matter, and, through the cooperation of the Govenor of Alaska, secured the passage of an act by tho Territorial Legislature which prohibited the shipment from tho Territory of commodities which v/ere rationed in the States, except in tho xfurso of established trade or business or for the personal use of the shipper, and established suitable penalties for violations thereof. Enforcement of this lav/ v/as, of course, tho responsibility'- of theTerritojy»s enforcement, authorities. Diminution of tho practices that led to thi* action was imraodiately apparent following its enactment and publication, and, duringthe years that followed, complaints of this off-color practice practically ceased. The work tov;ard the passage of this legislation vras an '’extra¬ curricular” activity of tho Rationing Division, but it v/as a service im¬ portant to tho rationing program generally. c • T VT*. ■■ A J - 109 - H/JfAlI UNPgR THE MILITiJlY GOVEMOR Gasoline rationing xvas started in the Territory on December 7, 1941. The sale of gasoline was suspended on that date. Various informal schemes of rationing were tried such as limiting the amount of gasoline sold at any one time, restricting motorists to one-half a tank full of gasoline at any one time, etc. The systems developed on the various islands were different in many respects. Oahu set up what was, of necessity, the most highly refined of any of these rationing schemes. It vxas not until February 15, 1942, that the Oahu authorities de¬ veloped thesystem which was continued in force until mileage rationing was made effective on October 1, 1943. This system provided for the issuance of a basic ration of ton gallons a month to all registered passenger motor vehicles, fif the applicant was unable to carry on his occupation v/ith the basic gasoline allotment, he was permitted to apply for additional gasoline on an extremely simple form which merely re¬ quired a statement of the number of gallons needed and the reasons for this need. If the applicant was issued supplemental gasoline, ho was not allowed any basic ration, that is, his ration v;as merely enough to cover his occupational needs. Commercial users applied on this same form and v;ero issued identical coupons to those given to passenger ve¬ hicle operators. If the Commercial user had his own storage facilities, ho was given a letter which stated the amount of his monthly gasoline ration and tho oil companios vroro informed of this allotment and viero instructed to deliver no more than tho approved ration. Tho gasoline coupons used \ander tho Oahu rationing plan v;oro cardboard tickets. These coupons wore issued in five and one gallon i ijT ♦# ' .iv^ '^li .If*' ■% r \ )VM|^ W' m * lllL. r-^ * W & ' .»!■ •* f • «- ■ I 'V. • I . r '•:♦'<■, r.w'' V' €C^ s.'- *?w I , i>;'it' .7 j- «T^ - 110 denomimtions nnd tho cf\rdboard was over-printod vj-ith a largo lottor designating the month of the issue. The rationing month was from the 15th of one month to the 14th of the following month and cupons were valid only during a one-month period. The application for distribution of gasoline rations on Oahu was handled by approximately 300 issuing stations including (a) 15 first aid stations operated by tho Office of Civilian Defense, (b) 5 major defense construction contractors, each of vrhich had from one to tv;enty sub-stations (c) about tv;enty Army and Navy posts, (d) approximately 340 business establishments. Basic rations wore issued merely upontho pre¬ sentation of tho registration slip for the vehicle, v/hioh was stamped with a letter to indicate that a ration had boon issued for that partic¬ ular ration period, ^or supplemental rations it was necessary that the applicant sign a receipt form. The decision as to the amount of supp¬ lemental gasoline to be given to any individual was technically made by paid employees of the OMG rationing office. Often, infact, tho decision rested with the issuing stations. Under the OMG, filling stations v;ere required to fill their tanks at avery delivery by the oil companies v/hethor they had sufficient coupons to pay for tho delivery or not. This requirement was imposed by tho Military Govenor because of military necessity since it greatly increased the storage facilities of the island, and perhaps more im¬ portant, it resulted in a more thorough dispersion of gasoline stores. All filling stations vrero required to make monthly reports shov/ing de¬ liveries, and to turn their coupons over to tho oil companies. A check of those reports was made periodically and if a dealer vaas foimd to have received considerably more gasoline than he had paid for in coupons, he v^as called to account. d * '■'fii'ttF * r i. * - Ill White gasoline (for hosehold and industrial users) vfas not rationed on the Island of Oahu any formal method# although dealers vrero re¬ quired to keep sales slips which were turned over to the gasoline ration¬ ing office. Each of the outer islands was under the command of a different Commanding Officer and as a result different systems of gasoline rationing were developed on each of these islands# Fundamentally, these systems had one thing in common, namely,that all used a ration card which was issued to the operator of the vehicle and upon which deliveries of gasoline to the vehicle were noted by the filling station operator* On the Island of Kauai the basic ration was tliroe gallons a week, and it was necessary that the motorist use the three gallons dviring the specified week. On all tho otherislands, the basic ration was ten gallons per month. Kauai also required that theindividual buy his.gas¬ oline from the same filling station at all times. Maui required that the filling station operator keep a complete record of every sale made, including the name of the operator, license number of vehicle and number of gallons delivered. All of this information had to bo filed with the local gasoline rationing authority. Since more than 70% of all the gasoline sold in the Territory is consumed on the Island of Oahu, tho outer island rationing schemes were relatively vinimportant insofar as a reduction in tho Territorial con¬ sumption of gasoline v/as concerned. With the arrival of an OPA rationing official in the Territory in December 1942, comprehensive studies of the various rationing programs then in effect were begun. As a consequence of those studies and after consultation v;ith officials of the Regional Office it was decided to intro¬ duce some variant of tho mainland*s mileage rationing system* . s 'III 3.'-V.’ '»' :j> trt i ■ ■> '^m, -^‘i >•,: ..n<^ ^'^^• >mm a i •.5.irI>riTrJ W «ihf ■> , '•’■'ij M ■ .'T v;' -•? .*»■ ‘W-|fj|j nif ''xt/'v-ja-'r ' a ic^ ;■•= . ** S.» , ^,{ *^1 N iV ■'■ V-;•: smi ^ ’ tie^ ■ - ■>'.. tnjKII^ M l ' ~ ■ ,-v,^ ,T»,r <• r. , W'" i .’t lil'' :r#^ 1^3 -X' .»/C‘Ua >'i dir«f '/<-' HllUll '4 • * */^*t **1^ * n<-VAxr*( ■ .» ; >*■ u;;i-t* ^ ' '-' I' ilK*'^ ;-*' *<.^1 ^f#*^){^t^ ■-* \ •%■*•■-^^'■..,*•■» ‘ 4. v;m* f.' *. yjyiKhe tv. ^ : • ♦ t2- ■ ■- » . , L- 5 *> v<-«4ei" ■• .V n . *t\ . , .i..f.' «i . i.ite'' * . .. '^ >5 vHd ,r ^rrtxm ■» *. - ». » > 0 '«>- <**',^S* Jill ’''^A^sneai ?c» V - 112 - ) Briefly the reasons for changing the OMG gasoline system are as follows: (The discussion below is specifically concerned with the Oahu system, but the same argument applies in varying degrees to the systems in effect on the outer islands. The arguments presented are not necessar¬ ily in the order of their importance.) 1. The old system required that every motorist apply once a month for his ration. This, of course, required a considerable amount of time both on the part of the public and the rationing office. 2. Rationing b^*- moans of ITar Price and Rationing Boards seemed in¬ finitely more desirable than by the multitude of issuing stations and by the paid staffs of the rationing agency. The arguments in favor of ration¬ ing by boards are too obvious to warrant restatement here, but it may be vrorth v;-hile to note that \the validity of these arguments was amplified by the existance of a variety of racial groups which can very easily be the cause of criticism of unfairness and racial discrimination. Even though no other change in the system of gasoline rationing had been con¬ templated, Vfar Price and Rationing Boards v;ould have been established for handling all rationing decisions since the Rationing Division v/as firmly convinced from the beginning that this was the most democratic and practical device for rationing. 3. Ihe OMG gasoline rationing program of the Territory ha.d been developed long before gasoline rationing v.-as completed on the mainland and as a result vms seriously deficient in careful planning and legal draftsmanship. T.'hile its operation could bo reasonably effective under ^ a military government, the difficulties caused by absence of an explicit and detailed regulation v/as always apparent. To an unfortunate atent, the operation of the old system turned upon the personal knov;lodge of \ ■■ r 1 ( • / 7 ' \ '3 s / i - 113 - those who were charged with its management. Oral understandings, rather than written records, werethe rule. Under the initial stress of vrar con¬ ditions such a system could bring about desirable results, but as tine went on and war conditions became the norman thing, these weaknesses of the old system became increasingly apparent. 4. The most serious flaw in the OMG gasoline rationing scheme lay in the use of loose coupons. Prior to January 15, 1943, these gasoline coupons wore not even marked ’’Not Transferable” and oven after this date there was no method of identifying the rations issued to a vehicle viith that vehicle* As a result of this condition, gasoline ration coupons were transferred as a kind of currency. Identical coupons wore issued for all motor vehicle gasoline uses, thus coupons issued for use of trucks could be used in passenger cars v/ithout any serious possibil¬ ity of detection* From an enforcement point of view, the difficulty of the OMG scheme was that the hosponsibilitj,' for proper use of the coupons rested entirely with the consximer since the dealer had no way of knovT-ing vrhether the ration had been issued to the vehicle* Because of the small size of the staff and the geography of the Territory, it was decided not to start the nev/ gasoline rationing program throughout the Territory at the same time, but instead to stagger the effective dates from island to island* Thus the regulation 5F wa.» made effective on Kau^i on July 1, on Maui August 1, onOahu October 1, on Hawaii on December 1, and vms effective on Molokai on April 1, 1944. AUTOMOBILE R/JIONING The rationing of passenger automobiles in the Territory was first instituted in July 1942 by the Land Transportation Control Office of the Office of the Military Governor* At that time there v/ore no new vehicles in the Territory since the /jrny and Navj’’ had acquired all such vehicles shortly after December 7, 1941* Some of the local dealers had 0 ■* "' ' '■’ ■-■ *. ' • -' •>/ , > ' »' . «f w :-r^,- iMu , •*<■» '‘- 4.« vA^ /‘I .*- -r^*- • vt: Jinif swirl*'?.- < --ton • T» i3t; .?3lwi> ■* ..,#4-«»f«“ •• ■ * jrS**» • •’ *CiT? •it' ■4..5fcll 1 '!' - ftii.uc *. , , Ut ■* Jv»' * V «. -•*«r to-.;■ nrtittii 40 'r.M>4!*> •!W'5.''i:; <_ . - ^1' X m. • ^ it ,J .J. .'^>.» -.i 4 - 111 . • new cars warehoused on the coast and these vehicles were released to eligible consumers who were allotted shipping space* The committee used the eligibility list set forth in the Ration Order then in effect on the mainland* Betvifeen July 1942 and March 10, 1943, approximately 50 new pass¬ enger cars were brought into the Territory under this system* On March 10, 1943, the OPA assumed the responsibility of rationing new passenger / cars under Ration Order 2A* MI scellaiteous consui^ier durable goods The rationing of bicycles and type'vvriters was instituted bj'- the dlG under orders issued June 2, 1942* These orders remained in effect until March 10, 1943 vrhen they were ratified by General Ration Order 49 issued by the OPA on that date* Consequently the OMG orders for these two coiTimodities continued in effect in the Territory* The CPA rationed stoves, hot water heaters and household re¬ frigerators in the Territory of Hawaii beginning June 1, 1943, through a delegation of authority fromthe t/PB dated May 20, 1943* On January 20, 1944, the delegation of authority to ration refrigerators wns revoked and distribution of new refrigerators reverted to WB* The reason for this revocation was to enable T/PB to allocate any available refrigerators to persons who received V/PB building permits* VIRGIH ISLAITDS Prior to the establishment of the Office of Price Administration in the Virgin Islands on Juno 6, 1942, rationing was the responsibility^ of the Governor of the Virgin Islands in his capacity as Rationing Ad¬ ministrator of the Virgin Islands* Tires, tubes, autoi.iobiles, bicycles and typewriters were rationed by a Rationing Board on each of the islands 4k V ( V - 115 - of St. Croix and St. Thomas. These boards were appointed by the Gov¬ ernor. Gasoline was being rationed by the Police Department in both Municipalities. In July 1942 tvro rationing specialists were sent from the National Office to Puerto Rico and the Virgin Islands to assist local offices in drafting the necessary rationing orders. They arrived in St. Thoma.s July 20, 1942. The insular government continued the administration of rationing until the OPA had time to work out a rationing program. GASOLINE RATIdllNG Ration Order No. 8 became effective August 22, 1942 and provided for the rationing of gasoline by means of coupons. It followed the lines of the orders in effect in Puerto Rico and the continental United States* It had no sooner gone into effect, however, than the supply situation became so acute that an amendment was issued (September 11) giving the Territorial Director the power to issue emergency rations. The Director accordingly declared a state of emergency and from then until November 12, 1942, gasoline was issued by special certificate only to the Armed Forces, Government agencies, and the most essential civilian services. These two months will long be remembered by the Virgin Islands Office and thepeople of the Virgin Islands. At times there was less than a 48 hoxars supply of gasoline and no certainty that more was forthcoming. In order to keep the most essential services operating, supplies had to be borrowed at times from the military reserves. By November the shipping situation was more stable and supplies were sufficient to return to a program of rationing through the Local Boards. Following the suspension of gasoline rationing in the United States and in Puerto Rico, simultaneous action was taken in the Virgin Islands, effective August 18, 1945. ' f' .. . V ( /.VV' ■ ^ I- . I' i. ' I’iX \ J ' 'Vf^. , J V , r J ■ ) # \ '■#1P •% . I \ «v . I f '-, ’ V • • #i « ■ > \ • i j^k is: ir' TIP'S 'fesT^ AUTOMOBILES, TIRES AND TUBES Automobiles, tires and tubes were placed under the ration orders which v/ere in effect in the states as soon as the OPA was officially established in the Virgin Islands* FOOD RATIONING In August 1942, another crisis arose as a result of the shipping situation* This time it was an acute shortage of certain food items* No shipment of v;heat flour had arrived on the island for mary weeks and existing supplies were rapidly being exhausted* After a careful study of this matter, the Director on August 27, 1942, issued Ration Order No* 10 -• Food Rationing Regulations for the Virgin Islands. This order provided for the registration of every resident of the Islands and for the issuance to them of ITar Ration Books entitling them to purchase a specified quantity of wheat flour each v/eok. The value of the ration was originally set at tvro pounds per person per week, but from time to time it was found necessary to increase or'decrease the value of the ration, depending on the supplies on hand* On September 28, 1942, Amendment No. 2^ to Ration Order 10 was issued making cornmeal subject to rationing* The value of the ration was also set at t'//o pounds per person per vyeek. Rice was added to the list of ra-* tioned commodities by Amendment No. 28 on April 6, 1945. The value of the ration was set at one pound per person per week. Because of the serious depletion of stocks of lard and vegetable shortening in the Virgin Islands and the uncertainty as to when future shipments would arrive it became necessary to add those items to the RO 10 effective on May 29, 1945. The value of the ration v^as set at one pound per person per month. I / / - 117 ~ BICYCLES AND TYFETvJRITERS Rationing of bicycles and typewriters was extended to the Virgin Islands under the regulations issued for the continental United States* They were released from rationing in the same manner* laumdry soap Laundry Soap Rationing for the Virgin Islands was instituted under Ration Order No* 20, effective November 16, 1944* It remained in effect vintil December 10, 1945, when it was revoked* At that time large shipments of laundry soap v/ere being received and indi¬ cations vrere that suppliers on the mainland would be able to con¬ tinue adequately to supply the needs of the people of the Virgin Islands* PUERTO RICO GASOLINE RATIONING During ViTorld v-far No. II Puerto Rico became a principal defense area in the Caribbean* The neighboring seas were continually marauded by hostile crafts and mary ships were attacked, disabled, v/reoked or sunk* The repeated assaults by Nazi submarines seriously affected the flov/ of supplies from abroad* The disruption of normal supplies brought about an acute shortage of essential products* The shortage reached its critical point by the middle of 1942, the severe scarcity being that of petroleum products* During the first days of June 1942 an unexpected gasoline shortage developed in the Island* To avoid a total cessation of the essential activities, on June 3, 1942, the Governor issued an Administrative Bulletin (No* 787) which restricted the transfer of gasoline* Several other Administrative Bulletins regulating the sales of gasoline followed* % •. / ■■ ; % t i f - * . i ./ — Il8 "• The system set up was very awkward and had many disadvantages* The coupons for the acquisition of gasoline wore only issued by the Central Office in San Juan, causing great inconvenience to people in the Island* The leaks were virtually unlimited and no provisions were made so that dealers would have gasoline on hand for essential users* Black market operations were a common practice as shown by the sale of gasoline at exorbitant prices* By the middle of June, 1942, the Territorial Office of the Office of Price Administration v;as established* On June 16, 1942, a head of the Rationing Division of the Puerto Rico Office was appointed* Sim¬ ultaneously with the appointment of the Rationing Executive, two re¬ presentatives of the Civilian Supply Branch of the V’ar Production Board, and tv/c representatives from the Fuel Branch of the Office of Price Administration came from T.’ashington to study the conditions of the Island and make the proper reccommendations for the institution of rationing* The 7/ar Shipping Administration was attempting to satisfy the requirements of Army and Navy as well as those of the civilian con- sumers, as no separate system existed for supplying the needs of mili¬ tary establishments in Puerto Rico* According to the Latin /onerican Supply Committee (an advisory organization made up of oil company representatives vrho coordinated the allocation of the available tonnage to various Lau^n American markets), the goal of the VJ'ar Shipping Administration, and the oil companies had been to bring to Puerto Rico sufficient petroleum products to meet 100^ war needs and 67^ of the- 1941 consumption of the non-war consumers* Essential users included at the time were: armed forces, federal V - 119 " and insular governments# public utilities# contractors on war pro¬ jects# and agricultixre (including sugar centrals and refineries). In practice# it had proved impossible to meet the supply goal stated above. All war needs had been met# but petroleum products brought in for non-essential users had been sufficient to meet only 50^ to 55^ of the 1941 rate of consumption. The inevitabel result of Cocreased supply combined with in¬ creased consumption was depletion of stocks of petroleum products held on the Island. The fuel oil and gasoline supply shortage ex¬ isting in Puerto Rico was extremely severe at that time. According to the Latin American Supply Committee, only temporary releif# in¬ terrupted by further crisis# could be expected in the near future* Because of the sinkings and possible diversions of tankers to new t T/ar theaters# it was impossible to predict what the supply of pet¬ roleum products would bo in the months to follcro,'-. The only certain fact was that the seriousness of the situation justified all possible measures to eliminate non-essential consumption. The storage facilities for petroleum products in the Island were inadequate to maintain a consistant rationing program in view of the sporadic deliver^’’ of gasoline. A suitable program would re¬ quire a large reserve stock which might bo drawn on to meet essential needs during the long periods in which a gasoline tanker might not arrive at the Island. The Army and Navy officials informed the OPA that they v;ere rapidly increasing storage facilities for military and naval services. Gasoline rationing would be ineffective unless it would be follov/- ed by a strict transportation control. This transportation progarm .'.'i..‘>/«M V . ,^/., : •-■•|^€v'^/,j^'f' /‘'^ .■■•': ’ ’... .' •'’^^. . fir'll '^Vyst'^efS /* ■ • r;.’ >/i ;'./A ? ,1 $f!iier-^V^': '1 . 1 1 „ : ■•■’,- V %. I ■ " -' . .-, . -., , V. . * ' • -■ ■ • ■ M ' -T» *'*■ ■ .• ■ -f /.I .■ ^‘ ■h • \ ♦ ■ ■ <^l r^Si "■■^s>r ^ ;3 ', 1 ^^‘ i/--'f. >••||‘ ^'C, •■■ \. . *'•' '- A! ■'ii-.' % . /■_ ’J . ve“ , , • ■■ ;.'*v' j t <■■ * I .’ " r^.. ■ ' ‘ .; , ‘ - y^\ _ ,' .-■>! I ' ‘ O- '’* - i,'’i •‘^'t'V w* '•• '- i, '’..^ ' '.' v'-* ‘ ,, v/ 3 p ' ■/■ ' p. 'V .,' I ' ' __ r'r^, ^ ^ ■ . - .o -- c '., -% ''' ', ;j;„ ,i;:: ♦ \ ^^S -. ’li:. ._■ :-i-;^\w^ ;': ;'*’4 ‘■~, jt'v ■■ - ' ^'■'j' ‘ ■ i' *yiL '' .n:, I .^•''' i'i '.!0.>ifi : StMjf 'v, . jA-/-■ ■' ■ -V «i« ;-. ■•nist^J^/.^ * .'ir4'> .iJtrM^^Citt Jl '- ■ <. ' t; . •'■ ^*- '■' ■ .1 /• •"• : Jiflvf jr;-■ • ■./ .L. t-.r - - jj ;■::. ■ ' ' '1. :'.•■•« V • :rvrftii.-^t^-’i. .v r-'t* ;Hi -^t j t ■ '* -.f . > *■ »• ^ i -< .• <. T'lfc' fii:. *r -!- ij >, ’• ;. fil .^,7 V. tX- --* - . *! '1 : .0 -i.« r-..: r . '1 jrw 7 .'i *.'- il:-^4 Mjj ' •.; .•.••i‘t/»t >.,‘il ■ih ,1- -• “4 »# t . V. - 120 I should include: (a) The regulation of Publicos and taxi-cabs. It was then possible for anyone to secure a "publico” license by payment of fee and to travel any route or make any use of the vehicle v/hich the owner desir¬ ed. (b) The regulation of commercial use of vehicles. There was need to plan the movement of railroads and trucks in such a way that cross hauls and empty return trips would be eliminated. Railroad facilities go almost around the Island but do not servo the interior, ^hey are principally used for the hauling of sugar industry products. Much of their equipment stands idle in the off season. This is particularly true of the rolling stock of private railroads owned by the sugar centrals. Trucks are used also for the movement of other products beside those related to the sugar industry, but their movements had not yet been placed under the ODT control. The Insular Transportation Office was making surveys on transportation facilities and uses, but this agency could not be used for the emergency management of vehicle move¬ ments since it was a long-run planning agency without adequate power to meet the war agency. There were a total of 31,554 motor motor vehicles currently registered in Puerto Rico. 5,740 Publicos -'550 Insular Government and Mun. Government vehicles 16,717 Private Cars 3,723 Private trucks (Heavy) 3,021 Commercial trucks (Commercial) 1,603 Commercial trucks (HP) Of the many ports which normally used the Island for import and export, and specifically by the sugar industry for their sugar exports. 4 - 121 only three Virere left open* All others were closed for the duration* This factor meant extra transportation to carry those loads which normally went from certain tcvms to the nearest port and vice-versa. Arny officials admitted in secrecy that their tactical oper¬ ations had been cut 50 % and their construction projects since the gasoline scarcity developed* Although it was e\’‘ident that gasoline rationing would be ex¬ pensive and hard to enforce procedure as compared to rationing on the East Coast, both the OPA and their.TB representatives made comprehensive reports and recommendations on the urgent need to start gasoline ration¬ ing, backed by a formal transportation program* They recommended a complete control to be also extended to the Virgin Islands since their gasoline was obtained from Puerto Rico* During the days that followed, the rationing staff studied rationing rules and regulations in force in the Eastern Rationed Area of the United States to ascertain the best procedure to estab¬ lish a rationing s^’-stom in Puerto Rico suitable to localconditions* Instruction guides containing a general outline of the plan for ration¬ ing gasoline and detailed instructions for the organization and oper¬ ation processes, sent from Washington, were of great help in this preparatory period* By the middle of the month instructions were sent from Washington to proceed with the preparations for the ins¬ titution of the program. In the latter part of Juno, 1942, tw,'o officials of the OPA in Washington arrived at San Juan to help establish the rationing sys¬ tem* The organization of the boards was an important job* The boards \ .. 'll* : <*if > . - -L». -ViLi /t t> k 0 w « • . »» , ; , 4 - - J 'Ti //• ■?V.4* a .^ 4tA4«n 3 J 4 |. !(/ ; Ttijpi I •u?K^ litl 1 ..'»o 1 - 122 * viere to be the keystone of the rationing programs# Taking into con¬ sideration the number of vehicles registered in each municipality, the difficult means of transportation between towns* the number of inhabi¬ tants in each and also foreseeing the probable necessity of a food rationing program in the future, the rationing executive considered it necessary to establish a board in each tovm, and more than one in the largest cities of Guu Juan, Ponce, Mayagues, Arecibo, and Rio Piedras^ After the organization of the local boards had been completed and the regulations governing the transfers of gasoline vrere approved by % the IVashington authorities, the next step in the inception of gasoline rationing v/as the registration of motor vehicles. The registration started on July 28, 1942, for all private passen¬ ger cars and motorcycles, with the cooperation of other Divisions and the Department of Education of the Insular Government. I’he registration \vas carried out without difficulties. The press and radio contributed to the success of the work with an ample publicity campaign which helped in educating the public on the registration requirement. To help local boards in the determination of rations for busses, information was requested from the Public Service Comraission and sub¬ mitted to the boards by circular letters. The Public Service Commission had conducted a recent survey of the daily consumption of ’gasoline by busses and on that basis submitted their recommendation of estimated gasoline requirements for compliance with authorized route franchises and certificates of ITecessity and Convenience, ^’ho results of the sur- ^ vey indicated the name of the vehicle operator, the route of the oper¬ ation, mileage travelled, amount of gasoline claimed to be consumed daily, and estimated requirements as recommended by the PSC. All this \ - 123 - information was passed on to the boards merely as informative material* Originally^ Puerto Rico used the same ration books as in the States* Changes had to be made in these books to control their use for shorter period* As they were# they could be used at any time during the period for which issued* Rationing had to start vj-ith them since a large shipment had been received from Washington and the ur¬ gency with which the program was initiated did not permit reprinting them locally* This was a principal factor in the acute shortage which follov/ed during the month of September* In spite of the appeals made by the agency to users to stretch their ration for the whole period# many people rushed to get their full quota of gasoline immediately* This was especially felt in reference to S‘*2 rations# good for one year# issued to trucks* Gasoline reseirves soon dwindled* Supplies did not arrive on time as a strong Nazi submarine campaign had the island al¬ most totally isolated* On the date rationing v;as started in Puerto Rico# gasoline stocks in the Island were very low and a serious shortage of the product was foreseen* On August 26, this shortage was extremely acute# and the first steps were taken to meet the problem* Effective August 28# 1942# values v/ere cut. In anticipation of a rush from the public to buy gasoline before the new values became effective# instmactions to boards and gasoline stations were issued by telegraph after closing time of service stations on August 27* This first coupon cut had been tentatively made to be effective from August 28 to September 14# 1942* But as soon as the petroleum shortage grew worse# and supplies did not arrive# a further reduction 1 ■ V - -f**! - .« <:r< A9t i s - 12U in the coupon value was imperative* ’’a” and rations were suspended entirely since the emergency v/as acute and these ration holders were considered the least essential driving group* Bulk ration users constitute one of the larger consuming groups* The invalidation of the bulk coupons made it necessary to issue to Boards special instructions in regard to services rendered to the community bulk users* The boards were authorized to exchange bulk rations for S-1 and S-2 rations only to the extent of the amount necessary to continue most essential services to the community for a short time and on a very reduced basis* Ainoung the services that continued to operate were those of public transportation by busses, transportation of perishable products^ and milk* These rations were to be issued every two days* The reserve of gasoline in the oil companies* tanks sank to such limited proportions that the OPA had to order a stop on the re¬ plenishment of service stations* Exchange certificates in the hands of Gasoline stations were thus temporarily frozen* On September 7, 1942, the gasoline shortage grew still worse* Small quantities of gasolie left in the tanks of service stations were also frozen* Gasoline transfers were permissable only upon the presentation of the necessity coupons accompanied by a special permit from the local bo.ards, or by authorization from the Army and Navy or the Territorial OPA* The tremendous work undertaken at this time can be realized from the fact that hundreds of permits v/ere issued, each one repre¬ senting a prolonged interview in which the gasoline requirements of I f - 125 - the applicant v;ere fully explained and supported with docunentar^' evidence of the services accomplished or of the existance of contracts essential to the V7ar Effort and which could not be postponed# Traffic in Puerto Rico came to a very low point* In several tovms and cities, not even essential needs of the community could be met, since there was no gasoline whatsoever in the locality* Civ¬ ilian reserves were completely exhausted* After various conferences va th the Ariw and Navy, they agreed to meet the essential needs of the community using part of their reserve* ^or two days, on September 8 and 9, permits for the use of gasoline from Army and Navy reserves were issued by military authorities, upon reccommendation of the OPA office in each individual case* These agencies, hcr.vever, engrossed in the war effort, considered it more convenient to let the OPA handle the matter, and on September 11, they allocated 92,000 gallons from their reserves to help meet the most urgent needs of the community in the whole Island* The gasoline ceded by the military authorities was deposited in 6 service stations in the towns of San Juan, Caguas, Ponce, Mayaguez, and Aguadilla, the same that had been used by the Army* From these staions, the needs of the adjacent tovms, v;henever possible, were served following the usual procedure of presentation of the corres¬ ponding coupons accompanied by special permits from the OPA or the local boards* The boards v/ere again handling a delicate and heavy task* On September 14, the petrolevmi situation took a turn for the better. Coupon valvies were increased to be effective September 15, 1942* The Island enjoyed several days of respite. The situation, although much improved, could not be considered normal. Rations v/erc not restored to their original values and were still issued on a very c \ - 126 stringent basis* Although the value of bulk rations were partially restored, bulk permits continued to be issued from the OPA office* It was then evident what an acute gasoline shortage meant to an Island that depends to a great extent on motor vehicle transportation for all essential activities* On September 23, 1942, a new gasoline crisis arose* Supplies ex¬ pected did not arrive on time* It became necessary to freeze the re¬ maining stocks in the Island to insure the continuance of the most essential services* Oil companies were asked to curtail delivering gasoline to the service stations at a rate of l/5 of their deliveries during the period September 14 to September 21, 1942* ^’his practice was in force until October 10* All service stations were ordered closed through September 23 to build up a little stock* Although coupon values remained unchanged during this new crisis, the special r permit system v/as again made compulsory for gasoline transfers* The most critical period in the history of gasoline rationing in Puerto Rico had just started* It was difficult for the central office, difficult for the local boards who bore the heavy burden of issuing permits for essential uses in their respective zones, and difficult for the civilian population whose use of gasoline was cur¬ tailed to a point v/here only essential users were allowed a minimum amount of gasoline to carj*y on their functions* This situation lasted from September 23 to November 8, 1942* As in previous occasions. Government requirements and bulk gasoline holders were taken care of by the Rationing Division at the Central Office* The Boards handled petitions of other essential consumers* boards. These permits were good only for a week, and could be re¬ newed periodically depending onstocks available and essentiality of the service .to-be rendered. Docementary evidence was required in all cases. The first renewal of "B" and”D" ration books was effected IJov- ember 8, 1942. Effective that date, the system of special permits for users considered essential in these categories was discontinued. Permits for service rations continued for one more week, at which time nevj- service rations v/ere issued, and became effective November 15, 1942. V^ith the rene^val of ration books on November 8, and 15, a new pliase in the gasoline rationing was established. Revised books were issued and rationing continued normally from then until soon after V-J Day v;hen it was lifted. gasoline for registration of electors During the first days of January 1944 a conference vrith repre¬ sentatives of the four political parties in the Island was held by the OPA Director to work out a plan to facilitate the transportation of new electors to registration polls. At the meeting it was decided to grant ten gallons of gasoline to each one of the political parties for each registration center for each registration day. To keep control of the gasoline to be distributed a special form vras prepared validating R-10 coupons specifically marked at the central office Vv'ith the inscription ’‘IN3*'r) A list of the official registration centers in each municipality' vras sent to all Local Boards. According to the official list sufficient permits v;ere authorized to each one of the political parties. The permits vrere serially numbered and bore the name of the municipality and date of validity. The permits were handed i - 128 -- to the four accredited representatives of the political parties in San Juan. The required number of special "R-10” coupons marked were sent to Local Boards who authorized the special permits and pasted cou¬ pons in same. Service stations were instructed to honoiar the special permits authorized by Local Boards* The representatives of the political parties promised to return all unused permits, Ma^y unused permits were returned from almost all municipalities and a break-down of gasoline used was worked out and used for issuance of rations during subsequent election periods. Realizing the importance elections have on the life of a demo¬ cratic country, all possible facilities vwre used in order that gas¬ oline rationing would not constitute a problem in carrying out the elections in Puerto Rico, Special permit gasoline rations were made available to elective candidates for public positions for prosecution of their candidacy, to the chairman of local political parties, to repres- entatavies of the Board of Elections, to government representatives in the different areas dxiring election day and to political parties for carrying voters to and from the polls during election days, ^he per¬ mit system prepared for the issuance of gasoline to political parties for transportation of elections worked out satisfactorily. No com¬ plaints were received from the public or any political party, FOOD RATIONING During the latter part of 1942 a serious shortage of basic food¬ stuffs developed in the island as a result of v;hich black market oper¬ ations cropped up on a wide scale in rice and lard. In December of 1942, fairly large shipments of rice were received, but duo to un- s ( I I • ■/ / C “ 129 - certainties regarding arrival of further regular shipments it vms not considered advisable to inaugurate any rationing rationing system at consumers level. Instead a rice allocation system v/as set up to insure proper distribution and conserve supply* In order to obtain an equitable distribution of the commodities throughout the Island, it was first necessary to hold a registration of all sellers of foodstuffs in every community* On the basis of this registration purchase certificates were issued by the Local Vifar Rationing Boards to retail establishments and for the first quota period such establishments were permitted to sell two pounds of rice per week per person* Although the allotment was less than the normal demand it was deemed a necessary prevention to conserve supplies* During the early part of March 1943, sufficient quantities of lard had arrived in the island to permit the establishment of a simi¬ lar system of quota allottment of lard* ^or the first quota period retailers viere permitted to sell one half pound of lard per person for a two v/eek quota period* As supplies of rice and lard continued to arrive in increasing quantities the quotaa authorized were increased proportionately until June 17, 1943, when the controls were lifted on these tv;o commodities* Again at the beginning of 1945 the stocks of lard in the island became low and there was no assurance that future shipments could be increased in sufficient quantities to take care of normal demands* On February 24, 1945, Restriction Order No* 13 regulating the transfer of lard became effective* Obviously the resulting demand on shortening threatened to completely deplete the stocks of this commodity/ and in - 130 - March 1945j Restriction Order No* 14, restricting the transfers of shortening, was put into effect* Restriction Order No* 13 permitted importers and wholesalers to sell to their customers not more than a certain percent of the average weekly transfer made to said customers during the months of November or December 1944 or January 1945 and prohibited retailers from selling to their customers of the basic period more than a certain peroeut of their atrerage weekly piorchases during said basic period* The program was carried out without major difficulties* Due to the scarcity of tin plate the shipments of lard were being made in drums* To solve the problem with which some importers and wholesalers were confronted because of the si*e of containers, the Order was amended permitting the transfer of lard on a four v;eek basis instead of weekly basis* As the importations of lard increased the Order was amended to permit the transfers of larger percents* Restriction Order 14 prohibited importers and wholesalers from selling shortening to retailers in containers of more than five pounds and also limited the quantities of shortening which retailers could sell to their customers* '^he Order follaved the normal trade practice in that retailers never sold and customers never bought shortening by the pound but always purchased this commodity in small containers* The shorten¬ ing imported in largo containers was distributed to industrial and institutional users such as bakeries, restaurants, hotel, hospitals, schools, etc* These industrial and instutional users obtained their permits to purchase shortening from the main office where they had to file the stock of shortening or lord on hand, the average normal needs of the commodities, sales of foodstuffs for the processing of which > s / - 131 ~ shortening or lard were used or number of clients^ inmates or patients. Both Orders Nos. 13 and 14 had provisions where by a consumer who obtained lard v:as forbidden to solicit or accept transfers of shorten¬ ing or vice versa. By November 1945 the stocks of lard and shortening wore sufficient to take care of normal demand and on November 19, 1945, both these Orders were lifted. As the stocks of rice again became very low in the Island and there was no asstirance of future adequate supplies it became nec¬ essary to place this commodity under rationing control, again. After consultation with the Regional Office, Order No. 15 was prepared and put into effect in April 21, 1945. '-^his Ofder restricted the transfers of rice at all levels to weekly deliveries of not more than the a- movint of the transfers made during the period from January 15, 1945, to March 17, 1945. This measure limited the consumption to about 60^ of the normal requirements of the island as estimated by the General Supplies Administration and the Governor's Supply Committee. YTith the institution of Rice Order No. 15 protests were raised by retailers. A two day strike was registered in two municipalities but of no consequence. They first requested an increase in the amo\int of rice allotted and'w'hen convinced that under the circvim- stances existing then it could not be done, then they asked that a coupon or certificate system be established. After a detailed explanation of how the order in effect worked and the difficulties involved in putting into effect a coupon system they v/ent along with the rationing system established, in spite of its shortcomings. One of the major problems which arose under this system of dis¬ tribution v:as that although the total sales of Office of Supply during i -: -j ■ I - 132 - the base period were normal it appeared that a number of retailers did not make their normal purchases during said period because of the strike of cane field workers then in effect* This left some retailers v.athout sufficient quota to distribute to their customers the quantity of rice authorized by the order* Another problem of distribution resulted from the flow of workers from other regions to the sugar cane areas during the ”zafra” (harvest¬ ing) season* After studying these problems the Order v/as amended so as to permit the Boards to issue toretailers certificate to balance their quotas with consumers permitted consumption* As the rice situation improved the Order was liberalized in¬ creasing the quotas to retailers and consumers permissable consumption* On October 29, 1945, the order was finally revoked* At the beginning of the year 1946 the rice stocks as well as rice deliveries began to dwindle* Future shipments were to be restricted since it was necessary to divert a large part of the production to the war devastated areas* ’'^''ith the approval of the Washington Office steps were taken in order to provide for an equitable distribution of this food commodity so essential to the Puerto Rican diet* On March 10, 1946, a Restriction Order was issued and put into effect freezing all rice stocks in Puerto Rico* This order provided for registration of importers, wholesalers and retailers* Based on the dates obtained from the registration and upon the information obtained from Washington to the effect that Puerto Rico would obtain a quota of 9500 tons per month Order No* 17 regulating the transfers of rice was pre¬ pared and put into effect on March 27, 1946. In spite of the very important fact that the moral factor of the existence of war no longer existed, the order functioned as well as ( ( - 133 - could be expected# The only serious problem nrose because of the great scarcity of rice during the maritime strike which lasted from the middle of September to the beginning of November* On October 28# 1946# it became necessary to reduce the value of all coupons having a value of more than five one hundred pound bags* This measure was adopted so that the small stores whore the poorer people obtained their rice would be able to meet these people»s need* The quotas of the larger stores# hov/ever# which cater to the well- to-do people capable of obtaining food substitutes were reduced consider¬ ably* By the end of November# duo to the personnel reduction with¬ in the Office of Price Administration# it became impracticable to efficiently enforce the Rico Order* On the 17th of December# 1946# Ration Order 17 was revoked after the General Supplies Administration (an Agency of the Government of Puerto Rico which controls maay cost of living commodities) agreed to continue the rationing of rice* MILK In order to control the distribution of milk as a result of the Price Regulation and Avert the diversion of this commodity from lower to higher p*ioed zones# Restriction Order No* 6 was put into effect on September 15# 1943* According to the provisions of this Restriction Order# transfers of milk from Zones II and III to Zone I could only be made if authorized in vnriting by the Director* Applications for transfers of milk into restricted areas v:ero handled in accordance with prevailing conditions in the areas vrhero milk ^vas produced* Investigations showed that adequate distribution of milk in Puerto Rico under the pricing system established was diffi¬ cult because seasonal variations considerably reduced or increased the productions of milk* rti - 13U - CONSUMER RiiTIONIlIG One controversy which arose over food rationing was whether or not the OPA should have instituted consumer rationing to replace the orders restricting sales at wholesale and retail. There was a diffe¬ rence of opinion among the Regional staff as well as the staff of the Puerto Rico Office. Among the arguments against consumer rationing were the diffi¬ culty of consumer registration, the expensiveness of the program, the additional \7ork load for the hoards, and the lack of necessity since the restriction orders were taking care of distribution. On the other side of the argument was the strong public pressure for consumer rationing and the numerous complaints that retailers did not distribute their quota equitably, but instead ’’played favorites”. Several boards set up 'consumer rationing on their own in their commun¬ ities. The Board Chairman in Adjuntas had a very successful program which was praised by both consumers and merchants. Coupons were mime- ographed at his mm. expence and a system of checking was set up by the board that worked well, despite refusal of any assistance from the OPA office. Certainly in ar^ future rationing program this matter will have to be reanalyzed. One thing stands out, from a public relations viewpoint, and that is that there was undoubtedly more widespread criticism of the OPA in Puerto Rico for not instituting consumer rationing of rice and lard than for any other action it took of did not take. V'.'i; ■■■ * i \ I - 135 - COMMODITIES RATIONED IN THE TERRITORIES Puerto Rico Tires & Tubes IB - Rev. Gasoline 5E - Rev. New Cooking Stoves 9C New Passenger Automobiles 2A Bicycles 7 Typewriters 4A — Milk Restriction Order 6 Kerosene tt II 7 Laundry Soap II « 10 Rice II ”15 & Lard n » 13 Shortening n II X4 Cigarettes II " 11 Hawaii Tires and Tubes lE - Rev. Gasoline 5F - Rev. New Cooking Stoves 9B-Rev. New Passenger Automobiles 2A Used Passenger Automobiles 2C New Hot vrater Heaters) Terr. Order- Refrigerators ) Local WB Directive Bicycles 7 Alaska Tires and Tubes If New Passenger Automobiles 2A Bicycles 7 Typewriters 4A Virgin Islands Tires and Tubes IC - Rev. Gasoline 8 Nevr Pa ssenger Automobiles 2A Food (rice^v/heat flour> cornmeal) 10 Bicycles 7 Typevsr iters 4A Laundry Soap 20 Canal Zone Tires and Tubes Gasoline Nefw Passenger Automobiles 17 c - 136 - ENFORCElffiNT INTRODUCTION The Enforcement Divisions in each of the Territories were organized soon after the Territorial Offices were established. They were not adequate¬ ly staffed, however, for some time. In the early days of OPA enforcement controls were concentrated in the National office. The main functions of enforcement for the Territories were consequently maintained by the Regional Office in Vaashington. Complaints of violations were received in the Territorial Office, investigated, and the results reported to the Regional Office for clearance and decision as to the sanction or sanctions to be applied. The delays necessitated by such a procedvire are obvious. As the offices gained experience, more and more responsibility was delegated to the Territorial Offices. Territorial ^Enforcement Attorneys shared in this delegation of authority until in the final stages they were completely re¬ sponsible for the enforcement of all OPA regulations for their respective Territories. In the beginning, the Territories operated under the regulations issued by the National Office. Enforcement policy in each Territory, • r therefore, followed the policy and procedure of the ^'^ational Office. Each complaint v/as docketed and processed on an individual basis, as more ex¬ perience was acquired each Territory began to develop its own regulations to meet the problems peculiar to the Territory. The process of- investi¬ gating each individual complaint at all levels of distribution became so burdensome that other methods had to be devised. Some of the methods used by Region IX preceded the change in methods adopted by Enforceinont in the continental United States; others were taken from the National office for use in the particular territory. The establishment by the National Enforcement Division of its Analysis and Reports Branch and the use of these statistics by supervisors developed Ir y i I I ’ .VT, > ; \ V. . , ^ \ /< / 3' . r f f • . I - 137 - a more uniform method of handling cases. From the old individual method of enforcing regulations on a case by case method, investigations wore con¬ ducted by commodity groups, enabling enforceirent to cover entire industries and apply sanctions on a scale which at the beginning v/ould have been con¬ sidered impossible. So far as practicable, this tecliniquc was adopted in the Territories. Certain i'lational regulations applied in all the Territories, other applied in some of the Territories, many did not apply in any of the Territories and in addition each Territory had its own regulations v/hich applied only in that particular Territory. National programs had to be adjusted not only to fit the various problems peculair to each Territory, but also to fit in v;ith programs under the Territorial regulations. After accomplishing this, all enforcement activities in the Territories had to be reported in such a way as to confrom viith the National reporting program in order to derii’-e the fullest possible benefit from the analysis of such figures as an aid to proper supervision of Territorial staffs, ^ilthough this \vas a tremendous task in Region IX, it was accomplished with the aid and cooperation of tho other divisions. The result was to achieve bettor control and consequent greater respect for the OPA in the Territories than prevailed in any other region or district. ALaSKA The Enforcement Division got off to a late start. It was not organized until late in the summer of 19^3* -^.t that time the Enforcement j-*ttorney, tho investigators, in fact, all enforcement personnel v;cre instructed and trained by the Regional enforcement Attorney, v.^ho unfortunately v/as recall¬ ed to Washington after spending just a short time in Juneau. Shortly there¬ after, before tho division was really organized, trained, or oven in a fair working condition, tho Territorial tinforc'oment Attorney resigned to go to \ •'C, 'ii-\ .'-?.. • 1 tvi fd * »*Nf - ■ ■■% la. .uidii "n ., I ^ ... »«f ^ ZklU^ ^.v the United States District Attorney's Office. For many months no attorney could be found to replace him. From the time the Fnf or cement Attorney resigned until April of 19^+, the investigators vfcro being usgd by Price, Rent, Rationing and by the Administrative Office, They made many useful price and rent surveys and •did other good work for other divisions. Yfliatever they did in other di¬ visions was not reflected in the enforcement work. Enforcem.ont training, if any, had been completely forgotten; they were not enforcement investigate So called investigation reports for enforcement had accumulated in large quantity. The investigators were taking orders from all the divisions. They did not know for v;hom they worked or why they did rhiat they were doing. In April 19hk» 2 .n enforcement attorney was sent from the States. A survey on the accumulated investigation reports indicated that it was ' necessary to close the files and start over. Beginning over was not an easy task. By use and custom the other divisions assumed that as a matter of right they could call on the investigators vj-henever they pleased to do either important or errand boy work. Difficulties were encountered in changing ihis procedure. By June the investigators v/ere back under the enforcement direction, but the problems were not solved. The investigators were not trained and all that had to be started over. The Enforcement Attorney v;as the only attorney employed in tho division and the only person with OPA enforcement experience. There wore three branch offices in Alaska, and these wore three to seven hundred miles axvay. Tlx; re are four divisions of tho Federal Court in tho territory and throe of those arc 700 to 1200 miles away. The task looked rather hopeless. The first real assistance came vahen the Chief Investigator from the Hawaiian office was transferred to the Alaska Office. Too miuch credit ii!r » m f (S j ■•■■'.■’ ' .y ►S -'l ,. , .-.r -. ' i r ri^tj ■ ..•• V-’v1X ^'■ I .. •a t 7 * ;ia •f *‘ •■11 » ‘^K I‘to* •>■ ■ » .’0 ' •,■ .’T. ■■ I t^.r I > ■> ■ ■^' ^ I r. .'m JJ j , ^ ■■» ^ <1 **M ♦ f -I « I 1* '■£i . 4 W ,. »<•' . * I; fj o-.. ’•■‘* -- H' •' I ■ ' .. ■ .(■ '1 '■/ ■ «i». a ‘ s..-: f*'. 4 ■. v. v ' ■ ' .2 , * -v'V'f . ^ v‘» 0 ‘ - j.'04 I JSf J t 1 4 -., ■«’V ■ ’■ 4 4 .'^■ »v-c i - -I •■^siafc'' ■If *♦ f.®}- . ■» ci4'' ■ Oi^.i <•! ■“'''>• «•■ / ’ 'k' ^.f—^ M" * '. . i- r ci -- ''■ «rf! ' AS X- ^ * 'li^ln* '^*i{ , -.^v^ 1 «'^4( - 139 - cannot be given him for the good work he did in the Alaska Enforcement Division. Generali^'-, his knowledge of OPA is the best encountered in the entire organization. He could and did handle all phases of the program. Enforcement, Price, Rationing or Administrative, and do an excellent job in any assignment. He did exceptional v/ork in the instructing of the « investigators. He assisted in making investigations and in settling and adjusting cases. If any degree of success can be claimed by the Enforcement Division, a groat amount of credit for it must be attributed to his efforts. He resigned on August 25, 19U5* OPA enforcement activity in Alaska has many difficulties not found elsewhere. The population is approximately 100,000 xvhich is scattered in many small isolated communities hundreds of miles from each other. Travel facilities do not exist as they do in the States. Air travel is largely the means of transportation, but that is not frequent and depends in no small degree upon the weather. Many communities cannot be reached by air. To reach them in the supmer a boat is employed, and in the winter, a dog team. In order to have any effective enforcement it was necessary to visit and make investigations in many of these comr.iunities. Among the difficulties, and not the least of them by any moans, was the procedural set-up of the courts. Th^rc are four divisions of the United States District Courts in Alaska; one in Juneau, one in Anchorage, one in Pairbanks and the other at Nome, Those are not strictly the United States District Courts. They are rather, a Combination of the District and Territorial Courts. The Federal rules of Civil Procedure do not apply. The procedure in use is that of the Oregon territorial courts. It is obsolete. The court rules for each division are not the same, and to make tho situation still more difficult, printed, typed or ^written copies of the court rules could not bo obtained. For some time it was felt that in .1 ^ 1 ■;■/■,’ '.vrj»n ..... ' f' I : ’. ■ .’ • 4'^- \ ..if irr ; ,i ‘ .!•!.•■ . 1- '. . ;av '. . ; . .. . : » '1 .- ■ 'i'v,., .., \iA \ vl [, ■ , • . ■' ■ V 1 ;. * irA 1 1 ^ /'* ),. / / ' ^4'vJ- • . : • W'-i.-rtt-V ■ t . ■>^ ,4/^“ . -I' ’ ' . - . Tjivf rii? .* i) ‘-'i • T . • ■ , ."',1 ..'A by} .t-n ^ . . ..‘i f ♦ 'i'; i'' . 1^. ■• .'•. I, U •7J /' Jifitx OOfl^c -.'/r v._ , '.; ■- 1: • , .'j ' » •£■..•'" f.m, t ,» ^ , . . V . •i t j ’: 4 *'■ /iv . ' i. -r' ■ > *' • " ' / sjOy i 1 * ' ** < 4^ y w fc- r ■ * ■ * <'•-.■.■*' . r,.ij ■•• ' , ^ « ...-.; ■ ■•..■■• '»'f -'iy i ■I . •' 'Ju .itfto. ■i-vjlv'; .-y: w;;3 it4 ';’ ... . _ ' . . KvPd^'i ' ,t ; '. •/.- .'ira/ '• f "f : r' j ‘ '* ■''' .44 t«.4.-,i'4 i’ll.', V-Cl'i V . .: •■ 4 v''‘* jy(5#"* '•' T>./ /- ^ r . ,..^1 ’■ ’ ' f-.J'" '.*T ")* 4 '/r - <: ■'♦7' 'I •-H- . IM' ».» • ^ ». I A. -• *4 . ■ ■ ' . ■' ^ 2 : 6... ■ ■' . :'f}.'4 V V3 ^ ' , • one particular division the court rules wore changed to meet the con¬ veniences of the occasion. Tiat situation has since been remedied. If the many protests from OPa enforcement assisted in bringing about the change, there are no regrets on this score. Problems v/erc much more- difficult than they may have seemed. Until the last fevr months there never were more than two attorneys. With the travel necessary to handle the work and with the obsolete proceduro causing ,no end of delay, it now appears the Division was vury fortunate in getting cases registered as they did. There are m.any reasons why a comparison of OPA enforcement in Alaska with that of the district offices in the States is not a fair one. For a long period of time enforcement in the States dealt principally with violations at '±0 manufact\jring or ydiolcsale levels. Their xiogional Officer could visit any district offices at any time within a few hours. Enforcement Liaison Officers were maintained and frequently visited Dis¬ trict offices. Vrnon any question was in doubt, when any planned program did not fit a particular community, or \^friOro assistance or advice was needed it could be obtained within a few minutes by telephone. The programs were planned for specific regulations and for commodity group investigations. Alaska enforcement did not have these advantages. It was indeed a rare exception when the planned enforcement program of the National office vms applicable to this territory. Regional officials visited whenever it ivas possible to do so, but what ivith oi'fices in Puerto Rico, Virgin Islands, Havmiii and ^laska, sueh distances take weeks net hours. There were no telephone connections v/ith the National Office or vnth the Regional Office, or for that matter betvrcen the Alaskan offices. Tne business in ^laska is not manufacturing. There are but few wholesale Nany of the businesses are a combination of retail and v/hole- businos ses. - Ihl sale. Very few of the regulations applicable in the States applied in Alaska. Regional officials gave all of the assistance they could, but the Alaska office was more on its ovm than any district office in the States. There were the sane problems as all offices had with changing per¬ sonnel, particularly investigators. Training new ones was an almost continuous job. An investigator could not be trained for one commodity group only and work on that alone, "when travelling and making investi¬ gations they had to be trained and qualified to handle price, rent or any OPA problem encountered. The staff was always too small but fortunately on it at various tines were investigators with exceptional ability. Had all of then been in the Division at the same time, the enforcement record would be much better. Most of the investigations and enforcement work was under regulation IIPA I9U and later RI»IPR 19U» This is a very difficult regulation for en¬ forcement . It is similar to GMPR in that it provides the highest dollar and cent mark-up charged in the base period. Otloer pricing methods are provided in this regulation but all arc dependent on base period prices. As a fair cstiraito 75 percent of investigations required much mere time and work because of lack of records in the establishment being investigated. A great many of those vrorc not because of the loss or destruction of such records but simply because records never had been kept in any period. In many instances old freight bills, old invoices or an occasional sales slip fastened on a hook, or in an old box constituted the complete records. Others had no records whatever. It was necessary to go outside tno es¬ tablishment to wholesalers, to steamship companies, to competitors and so forth, to reconstruct what had happened before it could be determined whether the establishment was in compliance or in violation. The methods of doing |V., . '' O 'nr n 11 Jj 1 '■ -'-'^ ir fl i rt<> ^8/?# Hi^,av*., W4tet .cw^ct-W-wt. <.AJktl3fiij" • ii 0( ^*v.?' i r !.'■ ioivi-i ftX ,^'ji ...rrvifd'V ■t'fr . ,' ■Tir ^ V . y -'' j;.','.' ej , ripi ]f^j^ n ».* % fcwi*^I#. • ■**■ :■ "' /:•'''' 'aKo It-?/*-•. i.ur -1 orfi -CO V,'* vr*# jisfjiX tftA ' ' , ' ’ '■'■ ^,. ‘ ' u jfe X. •vsiXc^. .iftflL "'f il . iJ!iXkJHf:ti^m*^^,|^’*^'. ff., s f' T!^ :t*.- 4ti ^t«.X'rw ' ' ;jfi- t$v|i%0dC' iK«’^ 5«;o» '■ ' ''‘ ' '.iS' ■ D iW /■“.hf ^.'T- ffot'r? ^ijiapjpn ll(l5}siii>.'Vto‘»’^•‘f^J 'iff ^.% Fi^VrXisij tiirOt r H .. r « .Tii , Ilcitr.gf.'fU ri .li 1". yt>11^5 A 11, «J ■^ijL *n«t j»*0 dprld 1i.iVa& ^<1^1'•«*^8«>'X ^ * ••: , 't.; ^ . L.r* ^f-ru /w,ciJa4'wwJ i>j .X^.w ,,oXli J ♦ftaJWyi auDri/w^f/^ ' ■ ^f. .Cf^ to ,:: ri^'bc/iac^jiA^t L-* ^ -•i: . «/ '^ii.c;jp6v. ht»if> :f-T .*?.rrfllfl^J^5w fcbico'jT -i ■ ■,!' ;■ ifv, \ ' jp.bd Jj(»XA*iasJcto ^ ■ ', ■ ■■ . :,.5‘?it3 ..., '9 .'k^AU toS -<< ^Xt^!7Sf .?• ftco'tiq-ft/f r./uft f 'div/ »> o^. « . 0;- '1^ I. I L 'mHM - 2h2 business and the Alaskan economy differs greatly from that in the States, i/icrchants liked OP.-* no better in Alaska than elsewhere. If anything, they were more outspoken in their dislikes. The largest establishments in the territory as well as the smaller ones were investigated and action taken. The inventory taken during the interim period following June 19U^, showed that since May 1, 19U; "to June 19^6, over 1100 investigations were made. Of these, 725 revealed violations upon whic'-^ some enforcement action was taken. It also showed that on 111 treble damage cases the sum of $87,015.88 was collected and transmitted to the treasury agent. The fifty-two civil cases were prosecuted to final judgment. Six criminal cases v/crc completed resulting in one jail sentence and vPl^OO fines. This does not shov/ the amount of work done for other divisions in the office or the amount of compliance work done by the division. It docs not include the many cases investigated here and sent to the Seattle i^istrict office for action. It does not include the K and L or the Alaska Distributors cases. On these tire cases investigations were made and after throe months of correspondence a personal visit to Seattle was necessary to convince the office that there was an actionable violation. Those cases were finally filed and resulted in judgment of approximately $150,000 against the de- fendent5. Time was spent in an honest effort to do the best enforcement job possible and not to build up a good looking statistical record. Enforcement has had the fullest cooperation and support of the Price Division and the Kent Division. The Information Division did an excellent job in publicizing enforcement activities. If any one thing can be pointed to and to which all divisions in UPA in Alaska can take pride and be sure they did their part, it is this: There were never any black markets in this territory. ir 2li^ I , . -U» ■.. f »• u f on . ' t Ml ,i ij^olr I * * I. * * ) I • 'r 'ic'-' ■ *■'i/»Icr^hf cS^' ■ 't’r * ^ ■ J ^ # ' ..- “VV fl' !if'0>' f? * ‘ * •' '‘'' u*rt .-.n OW^- ' • ,^=.1. -.v^''-‘lMt ‘ ' 0/ 4..‘ fr: '■ 3 ^ ' *p t i r 1.* 7'-M ^ .'•i-.-i v‘-vWtfe*flNOV> /;^!|i:#^ > «' '” “• • ■-'*•.■«, iU*t^ ,l; * • .1 ■ , ' I * I t ' 'Mti .ii:L.VM'.v. ^^^»*C5.T i Sd- ;'Xit ' ^-5 '^ii ''tiilf d^flW 7-^^^ 04 r4' , ■ ; ^ -i’. i’j .r * ( • . .Jat t.» •^.fr i' ;i f s/tisi 5. ' ■ >,' . X*- i.V..;-. 1v >- -■•■« V . l.*kJ -. il'** -. ^ i^oTi i ■ -.itll «4««(1|^ ^>T *“.11. ^’1-I - i # #7 1 4r* ^ . ) .' • f '•# •niir- • burr 4_i ,, .i'i (f&t; U Z‘- -■■;--- , % it .si»t.|.>r ^^«Xv r PI •■'j :'3-'1 ' . ♦ '-■ 4.11, ■'X»>t!^# i^ * ”? T •i^^itJ X'-* /r*3h till I*' ! 2 ifHO la- /'’ I i -i |rt? ilA^* »•’ ^ ■ i if (fl - 1U3 KAVltA.!! Until March 19U5> enforcement, like all other controls, v;as under the Military Governor. The viork required of investigators was a combination of price, education, and enforccircnt activities. Prosecutions of any orders of the Military Governor were tried in the courts of the Provost Marshal. The swift, informal trials, resulting sometimes in heavy fines, were a marked deterrent on prospective violators. For example, a v/holesalcr of rubber heels and laundry supplies who was found in violation a second time was fined ^ 1 , 750 » 00 « ^ v/holcsaler of dairy products was fined ^ 2 , 500 , v;ith !jjl,000 suspended for overcharging on sales of dairy products. A combination meat and grocery chain, operating throe very largo stores, was fined $1,000 for overcharging in retial sal-.s of groceries, drug store was fined $350 with $250 suspended for overcharging in soap and toilet tissue. A fine of $150 in the Provost Court was levied against one retailor, and two chicken raisers were fined $600 (with C 3 OO suspended provided they observed price control regulations for tho follov/ing 12 months) for ovcr-cciling sales. On March 10, 19U3» "the price and rationing authority of tho office of the Military Governor was transferred to the Office of Price Administration. Few changes in policy or personnel occurred at this time at the investi¬ gational level. Court procedure, of course, changed abruptly from the sujpmry procedure of the Provost Court to the legal procedures of the civil courts. And on June 15, 19U3 j 'the enforcement division v/as organized as a separate unit upon the arrival cf a chief enforcement attorney. From that day on, tho problems and activitios of the enforcement socticn were found to bo quite similar to those of other enforcement offices on the mainland. Vi 1 1 ' *“*3 1 '.V .I'i, 'ti'.'K. ')ii<>v'-.- l. ' • • 1 ■ ' V i' rv r.T.:i, <',U; .4 , S'f- J.‘k ^ f j U ' 1 ( S. 4.*; t ' .0^:. V ■* h ■ ■ ‘ ■ . ^ .oV *" *. J ; Lulv ■_j: ' ‘i r ' / i :■ .• J ■ ■■ I /’.■' •: '■ \:t c.f^ Lii4' ' ! .. *> > ! r*44 • i « 4 ' * 'j-o'i'j uo . ► .T »^ “t' • i ■ ' ■ ■■■ ‘ ’ i . • i ■■:-lV (.♦ .v;.. t <-■/ • -• " |i ^ ', Vi* I' *iJjl 'X^'- , .r . .' irit \ V .< ) '■■ /• ■ • Cv 'l!•»'■ ‘ -io'l ’; .-L .'-'r Y ^ 144 . 1 U 1 j :i. I/'- •' 1 ,1 . W . J I V 'j .>\. /, ■■''"■ ■ --yuJU ••I '0 I':’. ‘51 v -1 ' f >- r\ x\m '. 1 M ' A- ■ ■» - t ;*1 . .. .* * -, , ».•'■: vr; •Lit , j •3-. ’C ^ •• ( ' M'-. * *> ^ r I'-li. • : -mu¬ lt is impossible to appraise the value of the services rendered by the enforcement section. Statistics do not tell the story. But it can be safely said that the state of compliance in the Territory was above average. ■Whether this was due to the willingness of the people of the Territory to cooperate, or to the efforts expended by the entire staff of OPA, or to both, is part of another story. PUERTO RICO In general, enforcement in Puerto Rico follcfwed the National pattern. Perhaps the distinguishing characteristic of nnfor cement in Puerto Rico vras participation by insular authorities in the price control program. In the spring of 19U-3 j '^Ne Insular Legislature passed a bill (Act No. 31) making all regulations a violation of Insular law. This placed the Insular court system and the police department in a position to assist in enforc¬ ing OPA regulations. The earlier phase of this participation was characterized by the imposition of such low fines on violators - fre¬ quently fines of fifty cents and one dollar - tlio.t very little good was accomplished. In the Spring of 19U-5i however, the Legislature strengthened the Act and the pendulum swung to the other extreme. Stiff fines and prison terms then became the order of the day. In some instances, these were al¬ together out of proportion to the offense. Other factors of insul'-r activity - the widespread publicity against the black market, the ready cooperation of insular officials and police when called upon, and the proper consideration given, for the most part, to OPA cases brought by •‘Enforcement lawyers in the insular courts - were also cf undeniable value to the Enforcemert Division and the Office of Price Ad¬ ministration as a v;hole. Despite obstacles and many disappointments, the Enforcement Division I . \ G - 21 $ - in Puerto Rico did ci r^ood job. Conpliance in the- island v.as r^onoraily l^ood, perhaps to s. i::reator extent than the average index fi,<5urG in the continental ’'Jnited St'atos. VIRGIN ISLu'-DS The Virgin Islands undoubtedly prax^idcs the :ncst perfect oxainple cf cc-npliince anywhere under uPA. A snail compact co ■munity where ever^/ono knows Gveryono else, it did not need “strong-arm tactics”, general attitude of willingness to obey law and authority v/as noted as an outstand¬ ing community trait. The inforcemerit Attorney e^rly decided that it wo.s more important to prevent violations than it vn\s to build up a record of administrative, or court cases, hnforcemont, therefore, took a realistic and almost kinder¬ garten approach in dealing v;ith violators, lor many months no s.anction was applied beyond the compliance conference stage. The compliarco co?aference as a sanction afforded a unique opportunity to sound out the pors.or.al characteristics, motives, end connections of the individual and to operate upon his attitude toward the program, '--'nly aftv^r a bona fide prooiisc of porsvonal cooperation was secured from the i:\dividual was the ccnfcronce terminated. During these sessions refunds or donations v;ere permitted of large or small amounts because of the psychological effect on the violator rather than the value in terms cf dollars and cents of the money involved. The instances of wilful o^iolation wore fov;. As soon as ix viol.ation v/as fo'ond which appeared v/ilful on prolininary investigation, the appli¬ cation of a severe sanction v/as prepared. No criminal cases arose and only ono injunction vmxs sought ana obtained. Subpoenas wero issued when ne¬ cessary but compliance was always obtained before tho end-result in the application of the sanction was reached. The value of this approach in tho ■;. i # rr'’ %’. '■ -V^,'. V', ,' i ' ■ ^ 4 Sil 'j'*! ‘V ’I'l '" 'lIQIf '■ '*X .|'t •.w' TITA. ■■;4 i/tk __J t ', ' ,- - ||;Ss(i«V^ ''■’ a Ip^ lik ;.’•<■ ^ ’tv * 31 .-JT^:' , tE:^ > 1 - ^ •' r f>- rr' '’B '■■' '' '"■•! k't' M*!. e* . iiiy.*- ' l\ - t •■ j/ . t * '• ^ ' 'if ■ ' B‘ , i r: U\ 9 * 1 . }y i 0 t 1 t. ^ .- ' JT ' . ♦ ■ I ■ ^ . E T ^ ^ h *-i;.'.^ ‘ >i_ ySBP '■ '"‘i: '' ' ;■ *M* ' ' «ir». vM^ J'J-. ' .^' ^V i« ' •» •■'■'■ .1 ■'.Bb*|t-4 i - i t ,ti a- C-4t U li>*tt t- e^J t ?X 3v<{e'-‘ C f ♦ L .^ : ■ ■ rfiPK> ' t'’, ^ ,» ?J. I I" at ,v i'v ^v' r.jnfA0^'< •- v»i> Hi ■ .L Mjt-hf'. uidlffc:* *’'Hi ^ •> 'a^ i- |i. • .M ..o/A ^I- - 116 - enforcer.icnt of nricc rc;julations, therefore., nust bo ncosured in toms of conplinnce obtained and not in t^ms of sanctions applied. The nothcd of procod'ors v/hich nerited adoption bocauso of the hic;h percentage of over-all compliance resulting fr.-n its use in the Virgin ( Islands was simple and is as follows; 1. A wide and thorough dissonination of what the lav; required. 2. Ample releases and warnings -ago.ins.t violating the known lav;. 3 . Individualized treatment of violators in a sincere effort to obtain personal cooperation. I;.. Follow-ups to observe the degree of compliance thus obtained. 5 . Adequate recognition through publicity after full conpliaiico was achieved. The use of this technique required hundreds of visits each month by the four inspectors who dared not relax their vigil if the percentage of compliance vms to be maintained at a high level, ^ill avenues of publicity were used, but personal contact was still relied upon as tho absolute best. The success of this compliance technique is evidenced in the almost 100 percent compliance shown month after month in the compliance surveys. RENT COHTRuL Puerto Rico and Alaska aro the only Territories in which the Office of Price Administration established Rent Control. In Puerto Rico tho rcqulation cstablishin-’ Rent Control vras effective February 19UU* 11- sot a base date of etober 19^2. In Al.aslca, Rent Control was effective in l.'ovember I 9 U 2 with a base date of March 19iL2. In P-iawnii and the Virgin Islands, tho local governm.ents control rentals. Except in the Virgin Islands, tho large influx of military and civilian personnel in all tho Territories caused a severe shortage of housing accommodations resulting in tremendous pressure on rents* N I ■ \ h - ; ' t5 - ll;7 - n'FORMATION TRODUCTION The informetion program for Region IX was based on three underlying principles; 1* The public is entitled to know v;hat a government agency does and yihy it does it. The agency has a responsibility for this explanation to the public* 2. Price control and rationing cannot succeed v/ithout public coopera¬ tion and participation. 3. Cooperation and participation can be secured only through public understanding and public support. In recognition of these principles, an Information Division was estab¬ lished in each Territorial Office and given the responsibility for achieving public understanding and cooperation. The problems of an information program v;erc different in each Territory just as the problems of prico control differed among the Territories. The social and economic conditions, the racial composition of the population, the distribution of population between rural and urban — all influenced the development of the information program. Each Division, hov/ever, realized that the most effective medium of in¬ formation v/as through personal contact. Therefore, each attempted to develop an organization by v/hich the most people could be reached personally. The result was that in all of the Territories the major part of the information program was carried cn by volunteers. In Puerto Rico and the Virgin Islands, this organization of volunteers took the form of OPA Consumer Committees, In Hawaii, Information Committees wore organized to assist the Community Service Members of the Boards and a c - Ih8 - large part of the information work was carried on by organized groups, civic, professional and social* In Alaska, Consumer Trade C*nmittees were formed in each of the larger towns* Made up of representatives of consumers and the trade, these Committees reached a large part of the population of each of the tovms in v/hich they wore organized* The schools of the Territories were an extremely effective medium for OPA Information* Authorities responsible for Education in the Territories recognized the need for giving children an understanding of war time condi~ tions. As a result they gave their wholehearted support to efforts of the OPA to inform the public. The cooperation of teachers v/as invaluable to the OPA and to the community* The radio v/as widely used to disseminate OPA information in the Torrite- ries* In each of the Territories there v/ere regular weekly programs sponsored by the OPA or one of its volunteer groups* In Puerto Rico, there was an average of 26 OPA radio programs each month* In contrast to the situation in many parts of the continental United States, the press in the Territories was very favorable to the OPA programs* Full coverage in the daily and v/eokly newspapers v^as given to all OPA operations. The effectiveness of the Information program is best evidenced by the cooperation received from all segments of the community in each of the Territ ories * The organization for an informEition program was more highly developed in Puerto Rico than in any of the rest of Region IX* Since four-fifths of the entire population of the region is in Puerto Rico, a detailed report of the Information program there is representative of the organization, program and policies of Region IX Information* „ _ u£ -1^1 \ ‘ iT» * ' > ■(■■ ffl #. ",' ..,' -'V. --.in^" 1 '. . . ... « . • . ■ M V I ,rj*»'!; V -.n' ' aS” ’■'■•■ ; . ^ -''T ■-^' Volri-v f'^td '’4i'S'4(?^ ? n(^ iviv:art-{h.)s-f-.,r: wj 'i».'fcL-ttitrf^arri^ifi ■■ '■■ - -■ " ' - ^ ■ ■ v«.’ 'S. .. ■'■;*3SateC■«'■■- I\c 'T tc. ..... .;',_ . . V^v .iw''-' ',t- * ' .... I , I : h ■'ii ' IPi' ' , , .- -.'' ^il* * ‘-»' 1^'Ti ■ r ^'' ■'•■'■’ ’ if ■^.>.,' ' '> '. ' ^ " ,m ' ’ ' -1 .'>li‘ .,■ ,?"• ^ , -. vw^^.j*.., “ . , . I'Ar ■ .fi; .,■ 1^:' ' '"■ ' i ’ - • ' 'll ^''J '" y A ) ;4’i0 -1> ■*r'ia?-rr .'vf ti ./vk* ‘'^Xm ^t;"'>^■.^^^t■^:'i,Jh^fA n- ' ' •■ > '/; " ■■' 4- ' •■-' ‘'r!i/:'i * t'■ ■ "• j ^ ' '' ^ ^ ■uti 'ip ..n#.. ’TS'.-rrT^ i'c v._,r’- .o^i v V ^-^4£,sv<%. .JSt^ -i^;* ;ix **0* :A> 1 o '.vrC <5® .% ^x/),'^,r'^ '^\puH (it ^’i .V - I'*' {1^1 in< ’*1“ '*vi If, ‘ m * i^jfc ,'^'6 ^ ^: . •4 ( i - Iii9 - PUERTO RICO When the Office of Ftice Administration c&me into being in Puerto Rico on June 1942, price control wes something practically now, both to the great masses of hunger-stricken Puerto Ricfns and to the lucky minority possessing a decent living income* For the laborer and for the Puerto Rican peasant, the "jibaro”, especially, price control seemed an utopian ideal completely beyond comprehension* Only a few uncoordinated efforts had been made in the field of price control and rationing at the time the Territorial Office of the OPA v;as es¬ tablished* Both activities had been administered till then by an Insular Government agency known as the Food and General Supplies Commission* This Commission had established a general plan for gasoline rationing and had also fixed some ceiling prices for certain commodities. Prior to this, Puerto Ricans knew of some sort of price control and rationing, only through the Insular Food Commission which operated during World Vfer I* Although the Puerto Rico Office of the OPA was established in June 1942, the Information Division was not organized until October of the same year* The main function of the Division was to make price control and rationing practices as clear as possible to the Puerto Rican people--nbout two million persons of which over 69^ live in the rural sections beyond the usual media of information* The Information Division faced, in addition, the problem of pre¬ paring material in Sparish for a great part of the population—1,337,163 per¬ sons over ton years of age, of which only 371,000 are able to speak English# Puerto Rico v/as just beginning to feel the effects of war on its economic structure* The Island faced acute shortages of essential commodities because of the submrrino blockade* A quarter of a million persons within the 600,000- strong-labor force were unemployed at the time. Shelves of commercial concerns were practically empty; industries and agriculture were almost ruined by the < * .n:' c. ,if*lt/i-ir i M Kft ii V ■-■■i -'V ■* ^,r■ r#y -.'■**• A . _ « (i ^ I, ,1/1.y the Information Division* The Information Division of the Office of Price Administration was created on October 2, 1942* The Regional Information Executive of Region IX visited the Island to start the program* A Press and Radio Relations Officer and a Consumers' Relations Officer were appointed* In the beginning the two func¬ tions of the division were separated* This organization continued for almost a year, v;hen, to secure better coordination, the Division v;as reorganized with an Information Executive and three assistants in charge of Consumer Relations, Educational Relations and Press and Radio, respectively# PRESS A full program of information to the general public in all local news¬ papers was carried on throughout the life of the OPA. In addition to the re¬ gular press releases issued daily to local newspapers, a daily section called ’'OPA in Action" was prepared and published in all papers to carry news, end other informational and educational items about the OPA, .especially those re¬ lated to prices, rationing, rent and the action taken against violators of OPA regulations* RADIO The Information Division started a tradition of quality in all OPA radio presentations by using voluntary local talent* According to public response this kind of program attracted a large radio audience, but unfortunately, the unpaid guest artists were not v/illing to serve gratis* The fact that the OPA did not have funds to defray such expenses was a basic liability in the v;hcle program of radio activities. t - 151 - Among the regular programs were: "OPA Melodies Parade” a weekly program of entertainment and information; ''OPA and the Laborer” dealing v/ith OPA in¬ formation of interest to the laborers; the houseirives program, ”La Mujer en MEircha”; and '^The OPA Informs the Farmer”, OPA information relating to the farmers’ interest* In addition to these programs, the Puerto Rico Information Division assisted the Virgin Islands OPA Office in the organization of an OPA radio show for the Virgin Islands to be broadcast from Puerto Rico* Although the original idea v/as for a weekly fifteen minutes radio program solely to pub¬ licize OPA, government officials of the Islands were so interested that the idea developed into a half hour shov; once a week, prepared by the OPA but including every interesting nonpolitical, and non-commercial item contributed by the different departments of the government, local institutions and private citizens of the Virgin Islands* This program, called the ^Virgin Islands Radio Spotlight”, was inaugurated on September 21, 1944 over station V/IAC of San Juan# Besides the regular radio programs, radio spot campaigns wore organized and directed whenever conditions derandod* EDUCATIONAL REIATIO^’S PROGRAM A greet part of the success of the information program must be credited to the splendid cooperation given to the Information Division by the Commis¬ sioner of Education, school superintendents, teachers and social workers* Realizing the invaluable service that schools could give in disseminating in¬ formation that would guide the thinking of the students and communities in the current economic affairs, the Information Division moved in its early stages to secure the help of the teachers. Teachers and the school people made a real contribution tov/ard the development of a better understanding of the overall program of economic stabilisation* I » - 152 " Early in the organization of the Information Division a Central Educa¬ tional Committee composed of leading educators was organized by the OPA to assist in the development of the educational work through the schools. This Committee was presided over by the Assistant Commissioner of Education* The Committee soon set to work in the preparation of units of study on basic economic facts and the implication of the OPA program to suit different grade levels* At the same time a series of training conferences was inaugurated for teachers throughout the island. During the year 1943, a total of 102 con¬ ferences was held* This activity greatly strengthened the information pro¬ gram by bringing the teachers completely up to date on the economic stabili¬ zation program of the government* Meanwhile these conferences were supplemented by information fact sheets for use by school teachers, bulletins and price lists issued by the Informa¬ tion Division of the OPA. In view of the quantity of material being released by the OPA the Department of Education soon found that they could not cope with its distribution* To facilitate this they appointed a liaison officer who helped the OPA with the distribution of material directly from the OBA* On the other hand the Department offered mimeograph facilities in view of the shortage of mimeograph machines in the OPA# To facilitate the work of school teachers, a manual on study units for the different grade levels was distributed to all public and private schools and greatly simplified the v/ork for the teachers. Additional help to teachers in the development of study units as develop¬ ed in the ma.nual consisted of: (a) providing ideas for making of pesters and poems; (b) lectures to student groups; (c) preparation of dramatizations of w'^rk of the Board and interviev/^s of consumers and retailers, consumers and OPA employees, consumers and Board members and organizatior of junior consumer r *. I * 0 153 - committees in the schools* JULY EDUCi^TiaiAL CAlffAKai By an act of the Insular Legislature, teachers in Puerto Rico are paid on a twelve-month basis. Under this arrangement, any teacher can either de¬ vote the two month vacation period to atterding University studies or doing regular class work. The possibility of dev'^ting the time of those teachers to continue v/crking during these two summer months on behalf of the Informa¬ tion program of the OPA was discussed with the Commissioner of Education, The plan presented met with the approval of the Commissioner who instructed all superintendents to that effect. Officials from the Information Division contacted all superintendents to develop the plans of the first educational campaign. The whole island vras mobilized for v/hat was to become a regular July-August educational campaign. The directors of all insular and federal agencies established in Puerto Rico were contacted for the same purpose. The Superintendent of Schools or a person designated by him was placed in cha.rge of the local campaign. All the information material v;as supplied by the OPA, In all, during the first educational campaign, around 70,000 volunteers and paid employees participated, A total of 200,000 price lists were distributed in the rural and urban zones. The campaign proved to be such a success and be came so popular that the Department of Education volunteered to participate in it the next three years. It came to be a coordinated effort of all the community v;ith the teachers, social workers, home demonstration agents, boys and girl scouts. Farm Security fgents, local employees of insular agencies and the local Boards v;orking toward a common goal© UNIVEPSir/ OF PUERTO RICO The Information Director of the University of Puerto Rico v;as appointed as Liaison Officer by the Chancellor of the University of Puerto Rico to deal with OPA officials on all educstional matters relative to tliat agency. As r Liaison Officer he vms in charge of the distribution of oil OPA material to the University students and professors. A series of ten lectures were de¬ livered by OPA officials to different class groups* In addition to these lectures the Information Division planned a series of conferences on the organization, development, and community participation in the OPA program. These conferences were held by Dr* J. Cecil R-rker of the Information Department of the Notional Office in V/ashlngton* During the summer session of the University of Puerto Rico in 1945, a workshop on Consumer IVnblems was organized by the Information Division* Dr* Caroline Ware, fr'^m Washington, and Dr. Angel Quintero, an economics pr cfessor of the University of Puerto Rico, and the OPA Educational Rela¬ tions Officer, were in cha.rge of the vrorkshop* Dr* Quintero lectured on general economic aspects of consumers’ educftion, and Dr, Ware took charge of lectures on OPA programs and policies* The Assistant OPA Director, the Price Attorney, the Rationing Executive, the Consumer Relations Officer, and the Beard Organization Officer discussed with the group different aspects of the OPA program. Other people v/ho lectured to the group included the Presi¬ dent of the Minimum Wage Board, the Assistant Director of the Agricultural Extension Service and labor representatives* As pa.rt of the Information program at the University and through the courtesy of the editor of ''La Torre”, the University paper, the Information Division published a column in the paper carrying interesting facts cn OPA activities * STi^FF INFORI^.TIQN One of the first steps taken by the Division of Information was to maintain a medium to inform the members of the staff of the Puerto Rican office of the general happenings in Puerto Rico and the public reaction to¬ ward the OPA* With this purpose in mind, three interrffico news services / 'V-t'7'■, '» i .' ,',• •-^ .^‘ ' ; 'jiTWOl 'f'i'* VifI :i • • - % ' 1 . i/l T.., .r-: . r ;;5<^ I ■5“ 1 ' vV' •;..)»' : : ■ ^. \% ; " ^ I ,'■ J, "'' / • <' ' ,. 'f\' - 1 : ■•fwnwn* t 1 ^ • ■ ^ ’ ,IJ i'. •- • -li ' %^x '.•:'t‘iji *1.’ • •■ ■ . ■ f y Ka-Bi|pjrj-Tfl ^ il*^“ • \' v-^ •uli.li • *• I- • •*•. - * - • a. _ . • t rtJ^ Jiff A ■ ■ ri ' i.. i • ' . }i^ ■ •I / • I •■I '1 t • > i j. - 156 - Director wes designt^ted os advisor to the Committee on all matters pertaining tc general policies. The Administrative Officer acted ns technical advisor in regard to the production and distribution of printed and mimeographed material* Each Division Head brought before the meeting for discussion the most urgent problems of his Division and mode suggestions with regard to the imprc*’’ement of information for his respective programs. The community needs v/ere voiced by the Consumer Relations Officer as reported by the Community Service Panels, the Consumer Relations Official and from personal observation. The Board Organization Officer presented the suggestions of the Board Super¬ visors in the field. On the basis of these reports and their discussion the Information Division prepared a plan of activities for the next month. Those meetings were conducted during the first week of each month. The following three weeks v;ere devoted tc the production, preparation end dis¬ tribution of materials for the radio, nev^spepers, schools, Consumer Committees and other vehicles of information. The program was flexible enough to permit community variations and to include last minute information which was con¬ sidered important. This flexibility is exemplified in the following excerpt from the report of the Information Executive for the month of May, 1945; "The Information Planning Committee met for the second time to plan the campaign for June, The following subjects were decided upon: (a) Price; Location of price Panels and information on what they ore doing; (b) Rent; Registration of dwelling houses rented for the first time after February 1944j (c) Enforce¬ ments Explanation on hov^ the Enforcement Division handles complaints; and (d) Rationing; Tire conservation, "After the regular campaign was devised, the Rationing Division re¬ quested a special drive on the Restriction Orders, in order to insure better ' * ’ . .. .o*" • r ;•' ■'I'i,- n,\’ . 1 ; \ • •‘v ff' ^ 4^ A { ‘Hi? .jp. L„ . I >4! »-r» I ■ i -f ■4 1-- '•■ >■ , ft/n 'I' -♦4 I H ■> rF *'. '^ I ’ t . '■-'I’t' ,•; r'/' -i ^ur.''^l-• ■' ' . ^ ' ^ '*■ 'ri* -i' t ■.■■«? ^IC"' i' ’■»' '• *« ■• H 'ti; ■ •■ f-£.- iv*/' y ,-- • ti •y • * rH* *^*-: .•.If •:••'? *■• i ifis : k *; - -^t I . .:^ rt , .'. . \(: ."f. ■ • i •; rr * • ^«J *' . .tilG • ^ .r-X I r I ' jllJjird t V P - 157 - compliance* The request was taken care of end the material included in the monthly campaign for the month.” CONSUMER RELATIONS PROGRAM The OPA vms forced to place major impetus on its Community Organization Program in order to achieve understanding and cooperation from the local people* This was the program around which all Information activities v;ere planned • The first work plan devised bj'' the Division called for the organization of a central Consumers’ Committee in each of eight judicial districts of the Island* Once these district committees v/ere organized and trained, they were responsible for the; (l) organization of a central committee in each town within the judicial districts; (2) orgenication of a subcommittee in each ”barrio*^ or ward of each municipality; (3) channelling to all consumers in its area the orders and regulations issued ly the OPA; find (4) informing the central office of the public reaction to the OPA programs. The type of community organization devised by the OPA was the first of ite kind ever carried out in Puerto Rico* The recruitment, training and organization of volunteers thus required constant supervision of the work at the community level* At this time only one person in the Central Office was in charge of this enormous task as vrell as the work of preparing and editing iriformational material to keep these volunteers abreast of the program of the OPA* COMMUTHTY SERVICE MEMBERS The advisability of the appointment of Community Service Members to the f local Boards was discussed several times with the Director of the OPA, but due to problems of space, equipment and general organization of the local Boards, it was postponed again and again* During the period of 1943 the A - 158 - Boards vrere not receiving adequate service from the Central Office due to lack of personnel, a condition which was not conducive to enthusiasm on the part of volunteers* Moreover, the Organization Officer reported that no new members should be assigned to the local Boards until their set-up was improved and educational and informative material v/as ready to be sent out* As the orgsnization work proceeded, however, the addition of Commmity Service Members'to local Bi^ards to assist in the organization and educational work became essential* Aware of the need that the prospective leaders had of some instructions in orgonizaticn, a Jfcnual on Procedure for Organization of Consumer Committees was prepared and edited by the Consumers Relations Section before the appointment of such members* There is no doubt that the first step towards positive support is adequate understanding* The task was to create public opinion based on truth and a clear knowledge of the situation* With this principle in mind the selection of Community Service Members was • started* Community Service lifembers were added to all 87 War Price and Ra¬ tioning Beards operating in the Island* Consumers Committees continued to be organized by Community Service Msmbers and the Consumers Relations official's throughout the Island, in the urban as well as in rural zone* They constituted the medium tlirough which the public had at all times access to full information regarding all actions and programs of the OFA* SELECTION OF VOLUNTEERS The volunteers participating in the Information program were selected from among all lines of. activities vdthin the community* The selection of Community Service Members v;as made personally by a member of the Consumers Relations Section after an investigation of the candidate's Interest, ability, relations with the community and time that he could devote to the work* The X . I A \' I ( - 1^9 - selection of the members of the Consumers Committees was the responsibility of the Commmity Service Ivfember* In 1944 all Local Boards were serviced by 87 Commmity Service Members end 277 Consumers Committees with a total voluntary force of 3,402 persons* METHOD OF OPERATICB The Community Service MemTrers served as ad^'^’isors to the local Consumers Committees through which they c hannelled the information and publications of the OPA to the public* Besiders acting as advisors to the Local Boards and the Territorial Office on public reaction, the Community Service Members performed other duties, indue.ing the organization of mass meetings, lecture groups, distribution of Infor.natie^n material, the checking of prices at re¬ tail stores, and the conducting of surveys, either locally planned nr as directed by the Central Offi;e* To see that these volunteers were active at all times, a member of the Consumers Relations Office ■v isited every Board once every two months and discussed with them past anc. future activities* The work developed by these volunteers surpassed all expectations and merited at different times praise from the Territorial, Regional and National Offices * From the foregoing, one might think that everything ran smoothly and, moreover, that the Local Board Members v/ould welcome the organization of Consumers Committees and the appointment of a person v^^ithin the Board to take care of the educational work* On the contrary, the Division found that some Board members resented both. Consumer Committees and Community Service Mem¬ bers were looked dovm upon by most Board Members and made to feel intruders in most cases* One reasoi for this v;as that the Boards had beer educated mder a closed door policy, while the policy of the Information Division had ■ • % t - 160 - always been quite the opposite# The Information Division from its very start, considered the OPA an agency for and of the people# Community Service Members were instructed that it was the people’s responsibility to see that the OPA functioned effectively and that a basic responsibility of a Community Service Member was to inform the OPA of the people’s reactif;ins to its pro¬ gram. Another circumstance which constituted a stumbling block in the de¬ velopment of the Information Program v/as the attitude of the Inspection Division. This division was responsible for directing the work of the in¬ spectors# The Chief of the Section never believed that an effective program of price and rationing control needed v.'ell-lnformed consumers# Good work¬ ing relations, understanding between the executives of the Inspection Ikiit and the Information Division vrould have resulted in more expedient and rapid action on consumers information# A series of reorganizations of the Board Operations Division finally resulted in 1945 in an arrangement which elimi¬ nated these previous difficulties of lack of coordination between divisions# In September 1945, the Information Executive assumed the additional duties of price Board Executive# This move assured coordination between the Boards and Informa.tion# Under this set-up an information clerk was attached to each of the six district offices and supervised directly by the Beard Supervisor# The plans and schedules of work were prepared by the Information Division and v/ere supervised and followed up by the General Office# COMIUNITY SERVICE PAUELS In line v;ith the National Organization in April 1945, the Information Division proceeded to the organization of Community Service Plr.nels within the Board# This action greatly added to the prestige of the local educa¬ tional volunteers in and out of the Board# The prestige which the members of the Censumers Committees and even the Community Service Jfembers had at ■I. - 161 - this tine had been won only through perseverance and hard work* Now, through an organized panel in the Board they were looked upon with more respect and more consideration* The inclusion of the Community Service Panels v/ithin the Board as well as the merging of the Board Operations Division with the Information Division accomplished the recognition of the valuable work of the information volunteers* A bulletin was prepared on the organization of this new panel* Board Supervisors, Information Specialists, Information clerks were instructed on the methods of operations of the new panel and their relation to the other panels within the Board* With the devoted help of the Board Operations Division and the industry of the Consumers Relations officials the Community Service Panels through¬ out the Island v/ere put to work in a three months period* On August 1945 all the Boards were serviced by Community Service panels* Every panel was composed of at least five members, each one representing different segments of the community life, such as labor, rural, civic groups, the schools and the consumers at large* In communities v/here there was a nev/spaper or a radio they were represented on the panel* When conditions justified more than one labor representative and civic group, representatives were appointed to the Community Service Panels in an effort to give equal representation to all groups* At the close of business in November 1946, the total number of volunteers on Community Service Panels was 336* HIGHLIGHTS OF ACTIVITIES OF THE COM/UNITY SERVICE PAI'TELS AI^D THE CO^lSUDiERS COMMITTEES The Community Service Panels continued activities along the same paths marked by Consumers Committees* In April 1944 the retailers association in Caguas called out a strike in protest to the lard and rice rationing orders* The President of the Community Service Panel assisted by the Information Executive, the Board Supervisor, a Consumers Relations official r.r- • • , } : t I ■ < . il .. X - 162 - and the President of the Board, held an Interview with the president of the retailers association where the prcblens were presented, discussed and solutions vmre presented. In duly 1945 when rumors circulated that the OPA was being liquidated, the Community Service Ifenels moved to offset the rumors* They mobilized the religious groups on behalf of the antl-black-market campaign* , The fostered, organized and mobilized consumers for mass meetings where instructions and information with regard to the OPA programs were given* They conducted price surveys in dry groceries, furniture, kitchen ware, household linen, textiles, hotels and restaurants, and rent* They produced and broadcast radio programs through radio stations* They publicized the work being dene at the community level* They instructed consumers on the method of presenting cases of over¬ charges before the price panel. They cooperated with the local police in bringing cases of overcharges before local courts. They carried on periodic surveys to see that retailers complied with the regulations* I •-> They reported to the Information Division the results of the monthly information campaigns and suggested methods to improve the information work at the cemmmity level. - 163 - LOCAL BOARDS Local Boards had their beginning in the Territories in a similar I manner to those in the States. Larly in 19^ > “the Governor of each of the Territories was asked to take over the rationing of tires. To do this job, boards comprised of ^ local citizens were organized through¬ out each of the Territories. Later when the OPA offices v/ere organized this original structure was expanded until by 19 ^ 4-3 there was a local board in every community of any size. At the height of the board pro¬ gram there were three boards in the Virgin Islands, 37 in Puerto Rico, 15 in Hawaii and I 5 in Alaska. The administration of a broad government program by volunteers of local citizens was as new, if not newer, to the Territories as to the States. It was attended by many of the sam*e difficulties. Chief difficulty arose in Puerto Rico and resulted from the intense interest of Puerto Ricans in politics and their loyalty to political parties. The Rationing Executive chose the board members on the original boards and it was not surprising to find after all boards were organized that 35 ^ of the members were from the same political party as the Rationing Executive. It took many months to correct this first error and to achieve finally, a broad organization that was truly representative of the local community. Ko agency can hope to stay out of politics in Puerto Rico by attempting to appoint persons who have no party interest for there are not enough such people. The only answer is to see that all political parties are represented in a program and thus avoid public criticism of discriminating for or against any one political group. In Alaska, Hawaii, and the Virgin Islands the Board program con¬ formed in general to the States. Puerto Rico had the most elaborate / r. -f t 7 x' / i .4 / - 161; — organization and certainly the largest number of problems. PUERTO RICO Prior to the passing of the Price Control Act in January 191+2 and to the establishment of OPA in Puerto Rico, price control and rationing were administered by the Food and General Supplies Com¬ mission, an Insular organization created by Insular Law No. 6 and approved on November 21, 19l4-l» Under the authority of this agency / there were nine Rationing Boards operating in Puerto Rico, effective July 1, 191+2. These Rationing Boards passed to the jurisdiction of OPA and were called War Price and Rationing Boards. The next step was the selection and appointment of volunteers as members of Local Boards and the appointment of paid clerical personnel. Plans were made immediately for the expansion from nine local boards to eighty-seven. For their organization the following facts were taken into consideration: (a) Population to be served (b) Retail outlets registered with each Local Board (c) Natural course of trade and business (d) Communication facilities A Local Board Organization Officer was appointed and volunteers were recruited. By the end of August 19^42, eighty-four Local Boards were operating in the Island. For almost a year these Local Boards operated under the juris¬ diction of the Rationing division. The Rationing Executive selected the board members and paid personnel. Organizationally this was an error which later caused serious difficulties. Local Boards were trained with the idea that their duties v/ere concerned solely with rationed commodities. Later when price control became an important part of their work there was considerable resistance on the part of - 165 - old board members. In June 19^5, the Investigations Unit and the Local Boards were consolidated and became the Field Operations Division. This was an improvement and with the full status of an Operating Division, Local Boards were reorganized* The Investigators, previously working for the Investigation Section, were transferred to the newly created Field Operations Division with the exception of ten Inspectors who were assigned to the Legal Division. In March 19i^5» the organization was IXirther improved by decen¬ tralization to six district offices, geographically distributed. Board Supervisors headed each of these district offices and were responsible for the supervision, instruction and guidance of board members in their area. Price Panels were reorganized and special attention was given to the Price Control Program. In November 19^+5 this Division became the Price Board Management Division. The only important change was that the Price Board t^ianagement and Information Divisions were placed under one Executive, The Division consisted of the Information and Board Management Executive, as Head of the Division, with complete supervision of all board and information activities; an Organization Officer for the supervision and training of Board employees including Board Super¬ visors and volunteer members; a Price Panel Coordinator in charge of the supervision and training of Price Panels; seven Board Supervisors and 27 Assistant Local Board Supervisors for the immediate supervision of Board employees and the training and guidance of board members. Besides the above mentioned personnel 37 boards were operating with 183 pfiid clerks assigned to clerical work. Since the major job of information had to be done in the local community by the Informr.tion panel on the boards this organization integrated the operation of the price and information programs. This r proved to be the most effective organization achieved and should have been followed much earlier in the program. An average of 1600 volunteer members gave their time and enthus¬ iasm working for the organization. Over 600,000 volunteer hours v/ere served by all board members from August 19^4-5 December 19U6, The Boards carried out price surveys :.uid a full scale information program, etc., with their volunteers. In the Local Boards organization great care was taken to make them representative of all sections of the communities. Housewives, teachers, lawyers, merchants, laborers, farmers, doctors, v;ithout re¬ gard to color, creed, or economic status, formed the final roll of Local Board members. Price Panels held over five thousand hearings during the last year of their existence. Consumers received an approximate amount of thirty thousand dollars as treble damage com.pensation, paid by retailers found guilty of selling above their ceilings. Besides this amount, guilty merchants paid to the United States Troasurer over fifteen thousand dollars '■■s a result of Price Panels asserting the Administrator’ treble damage claim. This achievement resulted from the coordinated action of the Board Jvlanagement Division with the Price, Enforcement, and Information Divisions and the efforts of all Board Supervisors, The lifting of tire and gasoline rationing gave local boards time to take care of the increased load of price activites. After V-J Day plans were laid out for the progressive elimination of all controls on sales and production. The first step was the re¬ duction of Local Boards, in December 19^5» from the 67 then in operation to 39* island was reapportioned to fit the new organization, with¬ out lessening the effectiveness of the Price Panels v/hich continued operating with the same efficiency as ever. Paid personnel was re¬ duced proportionately. ili;. ■- ■■ 'J. - -V ,i- ; , - , o 1. t -'• ' ,.^1 *■ t ’ . » . * ■ * I ^- . ■>-5# -v ,,• • >«tj -Jl <- V-t W.; il« •f5W . . f / ; - tl ! > > /• -■• ii • 'm r- •» , '- •■ • •• . I*.. I-.* ^ I ‘ 1 - 167 - From July l,to July 25, 19^4-6, the Office of Price Administration was legally out of business as the United States Congress did not re-enact the Price Control Act until July 26* During this period all activities of the Local Boards and consequently of the Board I-feinagement Division were at a standstill. Nevertheless, not a single case of desertion by board members or paid employees was reported and all loyally maintained their posts of duty regardless of the uncertainty. Should the ocassion arise in any future emergency the errors committed in the past in the organization should be corrected. Local Boards should be organized from the very beginning as a separate division with all its personnel under one central super¬ vision or executive. No investigations should be made by board members. Their functions should be exclusively of an administrative nature and not as an enforcement unit. Boards should be composed of not too many members and their functions, scope and authority clearly established. In December 19^6, the activities of the Board Management Division came to an end, ALASKA PRICE AIDES No history of OPA operations in Alaska, and particularly that portion of it which deals with Volunteers, could possibly be con¬ sidered complete that did not include the story of the assortment of workers knovm variously as Price Aides and/or Distribution Officers, Like so many other segments of OPA operations, these volunteers were recruited to meet the conditions arising out of the vast extent of the Territory and the sparseness of its population. In many communities, too small to make board operations possible or feasible, the need for volunteer assistants to help the OPA program ■-.f- \ - '•'■.ro. . *V.i ' ■ V ' ir*v .v: •, \ * i 9/6 \ t. . .1 : r ‘ ,' ■ . r^' : r-*' t. I". -I- . - j ; ^ '.TC-^ ■.','; ■ .' ■ ■?, • r../ '£' ii •-T- • . vi* &» ■*,' i : V ;• . . 1 ; ' .r.vi ■ b ■ '■ . j •: ■ - ^ . .«-*•! ”* < I ■-} iT' j. •. ■ ■'<'* ‘ii ’ * , . ri-“ .1 •>“ ■•*' ? ;/!!•< ' . r’ ' Of . TKO 1 - ‘ Vm '>,••• I ‘A '>n'' 1 '•‘i' .-t 'Ht -i OJ*. ^ .V. > iXii ^xi . I~ ■ v ' , T' r j-Tfli • • - ■» ’iKik - - • ,1.^ .•4-vr;-s;v>:- ! •4aSi A - 168 - was early recognized. In the Eskimo villages of northern Alaska, tiny trading posts along the groat inland waterways, small communities in the Bristol Bay area, even in the more isolated small towns of Southeastern Alaska there was a price control program to administer. This scattered segment of the population had to be made conscious of its responsibility and rights as consumers, economic problems in these localities had to be brought to the attention of the Territorial Office, if these considerable portions of the Territory were to be fitted into the general pattern of OPA operations in Alaska, Many of these places were too small as communities to have enough English speaking residents to constitute even a small Board, but they were none the less important sections of the country, where lived many low-income groups, and definitely had to be fitted into the composite program of price control. How to establish the contact needed in each of these communities was a major problem in formulating administrative procedure for the OPA, It was met by the creation of this volunteer position known generally by the title of Price Aide, but sometimes also called Distribution Officer, The price aide was a sort of one-man Board in his community. He distributed information material — including regulations, interpretations, OPA publications, posters, etc., to the public. He explained the functions of the OPA to the people in his community. He helped the merchants make out cost of living and other required reports. He kept the Territorial Office informed con¬ cerning local price increases, shortages and other matters that affected the OPA program. He supplied information concerning trade usages and customs, needed by the Price Division for the effective discharge of its functions. He relayed complaints and reports of alleged violations to the Territorial office. He acted in an advisory , b » ^T '7 . 191 A* -% ' 'w“ '; 5 ?^''"'*^'*'‘* ’"'■’i«lS »fl>» 3 ^’ ., ■>• .. .^tr" Sj '. ',:k '* ■ ■ •'" > ^•:V-"'-'^ ■-'•'ll' Q,^ m^T^oy'i ]iu'ify.<^Q 6745 ^ rttv-tS _ V' '.. 'f‘ »ff )^3 s,*} »< iSk’shj,?* J{k?ti&'“ 7 -«!»a 4 Mr 'io r^ii^^}i\ 'jH^ o> '1>,M 4t. , ■: ;i:«-f-v 4 i AfXP la X/ii,x»C'^i 5 gii ?'pi 04 J af&V ' A * - • ' cii /4 &4 Aatl , 3 qj 7 ?r^. ^natn J^fM^-'j’jpi m • ■ Zl ^ 1 *' ■ ■ ' * ‘ ■ . ■ * " v^r l« ■ ^ A M ' \ '* ** ‘ \ /-* -j 4 ^;r#£h.-*-::;,l 4 /., 4 ^" 'i^f';! 3 ^ei ’ ■' 'V" ‘^ "36 -i'f! 7 '", • ' • • =V^' » ‘.'.'■t^t'fll •iOl^^xo^ -raJ/av^flov^lii^ik 'JO' ;a ^k'f feAttpi jj .>3iX4a»*gr -vtf .vEi ' aoi'i^ io ofii‘4 *-1^ ^XXf•5i^ rsjsyc^^fii h&^inJli^aJtf •»« . .v^i.Tj/rtja0a Bifcri oi , .0^ • •••^. C^.v ^ -tf 04 TfSO I>/rarni^«» 4K . *94i^Jjjr I ^pI’%S»J'^tt : ^r(t Tvj’jf ^K .ftirjoijt ■? 40Ti;/p«n ti^ri-'ts 4.MS> J.’^ij> !»«,, ^A>% *>'fOi*,': , fytii'q-anip 'li* »W'3g{>4.> 4l)0( lv«i^al7&i'{'’: gi ^otoolK ■ -kk ;*ir “ e’d i>,4if \ci 169 - capacity concerning proposed price schedules for his area. He was, in short, a "little OPA" all by himself out in the hinterlands. In the course of Alaska OPA operations 75 persons, representing at least 100 small communities, served in this important capacity. They were recruited from various sources, missionaries, representing almost every religious faith, teachers in the Territorial and Federal Schools, postmasters, U, S, Commissioners, visLting nurses for the Alaska Native Service, and other representative citizens. Sometimes a missionary or a traveling nurse served several communities, A typical example of the itinerant Price Aide was the Catholic priest at Hoopers Bay who covered six Eskimo villages by dog team, and had to explain the price control program to his parishioners in the Eskimo language. This particular Price Aide rendered especially valuable service to the OPA at the time the revision of the price schedule for reindeer meat was under way. Informative letters came in regularly from Price Aides and the file containing these is one of the most interesting to be found in the permanent records of the Alaska Office, -' „ ■ m K Jii! till i!>v '■toil ooS-tsi SowsH'-i .Jt.'slir^/iBi 'Si^jmsJ' i >-.«. ■> ^ iva.;' I -■- Hv ^ ^^itadS^fU - • -_.,...t_f- i.v_. "'v-.. _ CL' c./- a^i *tX ^i^jU^'XSwr.ao iX<^0 -«iJ^ ■' ^tr-. • • ■ , n I .' J ® ■_ ® Wi .TJ ?*•- ' * . n I ft ** A 4/^’.»bvi )&#■ i ai'fioj'I'JT.a' ie‘'l ,1i '. tTstifs^ir^po^ Sul . ti ' 59att>9QwU . ^ A “a ^al-tavL’ih? e ito :n. li-j' % s.o^ r»b/A «il;f lo alt^ijTfrt - ' ’ T^:^ M *♦ 'V ’.f> ‘^T.AiWi4?! ^i'tf tajrb^q 0»f '' K 1 I ¥- R vfi? «{it 5^? f-rta*^;ad£wX/^vJ^ f;J« S; ' ^ . . I *^' -!.’ £«vtH- .i'&liT". (aoVi ;X** iij;|i *’ 1 ‘ 4 c 4^ol;;vt 4Hr4;^a'5*fa"iil . («;)■ An 1 »H,^'T^*&^^^■ :p6C^^ii’ n,'' ai. atitnibifirif^I^t ^ uT -■■• .“HTit^Cr tliArL^ vHif *><» 400^^^' s ^ S'* i ■^''f ’ ■•;?! ■ / ' ^ r iT^r- ' ’; i/'f ]■>,'. ,f mm A *» h' fB i . « jtj C/'V'i S \ 'y ■ r 'w " if ■ ^ ’ I ■ is ^ k ' ,1^ • . V, . **<'jUMM s ' *i^» .i-*» - . li..-.VfjMf U- }'■ 'i r I T>L* L' Vk V, t,t'',w, ■ '., .1 r ^ iftjii Hi 1 - 170 - REL/.TI0NS WITH OTHER AGENCIES — Federal and Territorial Any Federal agency operating in the Territories must, of necessity, work very closely v/ith the other Federal agencies in these areas and with the agencies of the local government. This was particularly true of OPA, a war time agency operating during the war time period. Region IX always maintained the closest and most cordial relations with all other agencies in each of the Territories, Considerable attention had to be given by the Regional Office to problems which arose concerning the movement between the Terri¬ tories and the United States of commodities which were rationed in the States but unrationed in the Territories. A question of the transfer of ration evidences in connection with such commodity transfers was involved. The Regional Office from time to time was called upon to expedite or to ascertain the status of shipments of certain commodities to the Territories, particularly when supplies of essential goods reached a low point in a Territory and a crisis became imminent. This required close cooperation with the U, S. Interior Department officials who arranged shipping space. The Office of the Petroleum ■Mministrator for War was consulted from time to time with regard to allocations of gasoline for the Territories, During the period whaa the U, S. Departments of Agriculture and Interior were responsible for the food supply in Puerto Rico and the Virgin Islands, there had to be a very close v;orking relation¬ ship between Region IX and these departments both in V\fashington and in the Territories • » WW M ' rr . ' • * '7; ;.v^ -W A,^, di^4r ■; ^ 'W''"" .^1.'' ’ ^ .,i , ■^'' ’ ,^tJ^ib5 |;«t?»;^jei*^;i35: \i\» e; vM^' fc ■ r ^ % ^:t TsWxf^f o/ftf ^,l-s '(t«s^^;incr »'. f4i • ,. " ■ ^ -'j . *■ :3Sj § , ■ AAHiUj *l-5l!fl(|*XT|i^ > » *^‘’> It ^•it,?/^^:‘ii^'t^^vi 6»W ':'. ^ V ; IB 5f>^sjwE ' ^ *4-i •*.'>\/*<'* r\ . “tEOiS &!T4> tf jN-tt'i-fO’ Jyf't./'val/JWJ', fiVrTWft 3Cl ® - .' ' ’ ■ ‘ .r ■iii.fflit. :■ v fSd; B-. ,-*'*<>.*** ;U By' ,:" a-- ^ Br^lTXdi y^ nxirjq^ i:? e':!ic oiQ>.ic-t>^*^x:i>0 ‘ 0{f*f trtfw«yy«!L2? o^l^ loi/iw ti^ald^-ii* ot fk ff? ^'icyr JvI,-i}^ 'i* Av4.«»i}’;} bocritfO -arft Df® iltitPif' « i sBeV ^ , V jrfi-f td I'ivltfssi^p A .a^^^iona'stj'I to|^vXov;U W «*tic- (?.'l.-V!l*?‘tiM;ft.1 *^C!X'l^\U .y 1^ /f^^V X^iT/TiTStJV^O 34 3X$^ f|d >0 |).*};,4.r-'Tft axi^* 'fclfc-^i"t*?ci fs:-3XvA tie' ‘*f^ ' *.a:V 'f^^«*r3-aiq[Xjf^fc>^ tTA/oerf!? aoi‘A‘10 grtf ^ •’l.^f''. ^li tWL'1 oui '!|>I‘ '.>W5r J 5 i P ‘■'.■icXrf-Ji/'*- <.r ■(’y'U -.‘.3C^ «I^»>V i ;j^ V...- nci^AA-T.-**^ ti idlf^ iziM'.>£%; V46iii>.f>' ^fw ' nrx^i»^:-»v5i5\■ ai “f r 'ivr *■ I 4 ♦ r • ’ - , •V V V. ■* i ' -ip -■^4 ■.'».,< 1 . *1 - *^*<4- ^ t t ' ‘ 1*1 - ';•• <1 ) - ii-^ e«> • - i:< ^ V(^ :(^''^^">l»i||IK ^■>‘^00- ,*Ji'i.' f • V''-' .frAyfe^'^- ^^1'’ -t i- i.ji ’»,i 1 »>.‘''.'M¥: r V ‘ ‘■ri-.p ' Er;-''- .'' ^ ■t^^- ^1 X 4ciM 4k*i»r^ • •''''*■ I >''. r' *. ._, V »^ ‘m' j3 t ||||. ( ® //i>f ■■ sil.S VA-'^-' ^ !^-i,..- ^iiv;-^ A ft/- 4 »*:- »AWvf-«. t3f ;' -•'' '^- ‘'*^<■4 ‘-i^^ *it ■^ ■> ^ »#■ •*.^ V*' i* ‘ A.;‘‘ ^*' ■•. - 172 - which the Price Control Officer of each military or naval estab¬ lishment was required to know for the discharge of his duties 4 and OPA also held training sessions for all Price Control Lis.ison Officers, This program was of inestimable value in getting infor¬ mation to the large population in uniform, and in addition greatly improved compliance in those industries catering to men in uniform. In addition to the manual, each Price Control Liaison Officer was furnished with OPA complaint forms and every man in uniform was encouraged to see his Price Control Liaison Officer whenever he be¬ lieved he had been overcharged. If the officer was of the same opinion, a complete form was executed and forwarded for immediai-te investigation either by the appropriate price panel of the Terri¬ torial Office of Price Administration. In Alaska, the Territorial Office of Price Administration cooperated with the Army in the organization of Military Price Clinics in Anchorage, Seward, Fairbanks a.nd Nome, The organization I of price clinics resulted from OPA’s request for cooperation from the Army in its program to combat inflation — a program in which servicemen had a very special interest, A Directive was sent to all offices of the Army in Alaska. Information on which the Directive was based was given to the Public Relations Officer for the Army by the OPA, The Directive instructed all military personnel to cooperate wdth the OPA in helping keep prices and rents at the OPA ceilings. The Price Panel handled complaints transmitted by service men through the Army Public Aelations Officer and was requested to give prompt consideration to these complaints. Radio programs at regular intervals over the -^^rmy radio station provided OPA infor¬ mation and encouraged service men to report overcharges of any kind. \ - 173 - In Puerto Rico and the Virgin Islands, the military v/ere equally cooperative although in a less formal manner. The Territorial governments were always willing to assist in the fight against inflation. The Governor of each of-the Territories and the Territorial representatives in Congress gave the Regional Office and the Territorial Offices their support and their advice and constructive criticism. In Puerto Rico, in the spring of 1^3, the Insular Legislature passed a bill (Act No, 3 I) making all violations of OPA regulotions a violation of Insular Law, This placed the Insular court system and the police department in a position to assist in enforcing OPA regulations. In the spring of 1^5» "the Puerto Rico Legislature strengthened Act No, 3 I and also passed a bill placing all commercial rents under price control. This supplemented OPA’s rent control over rental dwellings, hotels, and rooming houses. The Legislature in Hawaii passed a bill early in 19^5 bringing commercial rents under control. This measure was of great assistance to the OPA since increasing rents wore one of the major cost factors used by business in Hawaii to secure upward adjustments in prices. This cooperation between the Federal Government, the Territorial governments, and the military authorities substantially aided the effectiveness of the price control and rationing prograim in each of the areas outside the continental United States. •Tv ( > . 1 - 17U - ORGANIZATION AND PERSONNEL POLICY The Regional Office was located in V/ashington with Territorial Offices (equivalent to the District Offices in the States) in the Cap¬ ital cities of each of the four Territories and Island Possessions. Region IX always follov/ed a policy of decentralized operations with the major portion of the staff in the Territorial Offices and a very small staff in the Regional Office. The Territorial Offices,re¬ ceived something like 95 percent of the annual budget allocated to Region IX while the Regional Office operated on the remaining S percent. The Territorial Directors were delegated as much authority as was necessary for immediate action on matters of price control and ration¬ ing. The Regional Office remained responcible only for over-all policy and for keeping policies in the Territories in conformity with National policy. Close contxictwas maintained between Regional and Territorial offices by means of frequent correspondence, cable and mail, and by visits between Regional and Territorial personnel. The policy of staffing the Territorial offices with local persons, whenever possible, proved very successful. When the Territorial offices were first established, a number of experienced persons from the mainland vrere sent out to organize operations. Gradually most of these persons returned to the mainland and were replaced by persons recruited locally. On the OPA staff in the Virgin Islands, there was in the later stages of operation only one person v/ho was sent from the continental United States, while Puerto Rico had less than half a dozen persons who v/ere sent out from Washington. Attention should be called to the language problem in the Puerto Rico office. The great majority of adults in Puerto Rico, including •?cxf r i:.t iiC. . ■»J ^ fc - '■:■ r't icr a 1 ‘ «»• ^ .^' * ■ . i * :j ‘': Sfljr ^ ■'. \ t,') . . ■■4 • - .v' f»lf ■ iXj S'-' * •*> .# •»i i-.-i-C tv , * r“’ K'lv r:i'. .- •» % -.(X, "i-U ^ -i?!.. ,\n. *r •• •' ' '♦*' . . 0.'“* *• .J * • ..nn,Iai b.''.r • j I’?"* r fT' «. i" Xo a^ii ■.; f ?.lt l'.Jl«li *; ’. r :i5 ■j. 1. -■ » { i A'-r.; -Z'/AWl L .X ndx < b’Vi. 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