to the production of tanks, planes, guns and other weapons. Residential construction nearly stopped and business investment was channeled into increasing the capacity of essential munitions plants, pipelines, and railroads (Williams 229). Within a few months the great consumer durable industries had been shutdown for the duration of the war (Williams 229).Along with the abundance of employment opportunities and partly because U.S. industry shifted into war production, civilians were faced with shortages of goods. There were shortages of meat, shoes, gasoline, and sugar. If left to the free market, prices would have soared and distribution would have been determined solely by the ability to pay these prices (Finkelstein 40). To handle these problems the Roosevelt administration created the Office of Price Administration.The OPA was first ordered to hold the line against rising prices and they did this successfully, from April 1943 to February 1946, the OPA managed to hold the annual rate of inflation to only 1.6 percent (Williams 235). However, because prices were being held below their real market value or market clearing levels the demand for those products exceeded supply. To prevent shortages, the OPA began its rationing program. The process of rationing was kept simple. Books of coupons were issued to each individual. For gasoline, individual consumers received modest weekly allocations of 4 gallons, while businesses got more. Sugar, coffee, meat, shoes, and canned goods were all assigned points and purchased with ration books of stamps and coupons. For the most part, the system, worked equitably and well. Overall, prices rose only 33% over the entire period, a rather remarkable outcome (Finkelstein 235).Price controls did more than simply suppress inflation in the short run. Controls allowed the government to acquire resources at a lower cost than would have been possible had the distribution of vital war material been left to the...
