Fears and Frustration
in the Cold War
FOLLOWING THE SECOND WORLD WAR, the nation underwent its usual period of unstable postwar economic conditions. Businessmen clamored for higher prices, labor demanded increased wages, and consumers, whose bank accounts had swollen through wartime savings, eagerly awaited an opportunity to purchase durable goods such as automobiles which had been unavailable during the war. Since money was plentiful and merchandise scarce, inflation threatened to ravage the country unless the federal government effectively controlled the economy. The Office of Price Administration was charged with stabilizing the marketplace. Despite strikes for higher pay by workers in the automobile, meatpacking, coal, steel, railroad, and electrical industries, and consumer indifference over inflation, the agency did a remarkable job. During the ten months following the conclusion of hostilities, prices rose only 7 percent, although this still left them 33 percent higher than in January 1942. After the original Price Administration charter expired on June 30, 1946, and a new, weaker version was instituted, prices soared 25 percent within a month.
Shortages continued and blackmarket sales were common. Demand was especially high for automobiles since, according to Fortune magazine, there were at least 9 million units ready to be traded for new models. Because demand greatly outstripped production, it was estimated in 1946 that 75 percent of all new car deliveries were to customers who had bribed salesmen to place their orders. Meat was also in short supply and distributors sold only to their regular patrons. In Detroit, a neighborhood butcher refused to sell to a stranger who entered his shop, saying only, “Let her starve!” Using shortages and rising prices as campaign issues, Republicans swept to a nationwide victory in 1946 and gained control of both Houses of Congress for the first time since 1930.