The Pressure Rises

"Shrimp. We have it, but it's too high. I wouldn't buy. Regular 20-c- size now 89-c-."

In this ad in the Tulsa Tribune last week a merchant angrily said his say against the flood of rising food prices in the U.S. While Congress still wrangled over OPA (see NATIONAL AFFAIRS), most manufacturers held the line on prices, worried lest a sudden boost bring back OPA with a rush. But food was something else again. The Bureau of Labor Statistics gravely reported that its food index had jumped 16.1 points last week alone. And with commodity prices rising all along the line, chances were that food would continue to rise.

The record shipments of cattle and pigs into stockyards all over the nation continued last week, but the big packers were in the market for the first time in months. Result: choice cattle prices in Chicago, which had sagged, went up to an alltime record of $25 a hundredweight. The bulk of the cattle sold for less, but the average price v. the OPA ceiling of $18, was still over $20. Result: up went retail meat prices all over the nation. New Yorkers paid as much as 50% above OPA for meat.

Many a chain store, anxious to cash in on good will rather than quick profits, tried to hold the line. In the Midwest the giant Kroger chain (2,688 stores) boosted its prices on meat and butter only the amount of the lost Government subsidies: 7-c- a Ib. on beef, 15-c- on butter. But Kroger's able, friendly President Joseph B. Hall sadly admitted that the company has taken heavy losses in these items to hold the line even this much. It was also having a hard time replacing its depleted stocks at ceiling prices. Unless there was overall OPA legislation soon, said Grocer Hall, Kroger's would have to abandon its policy or have no foods, in many lines, to sell.

In the same way, all retailers and many manufacturers were being squeezed by upsurging commodity prices. Corn syrup and starch were up 25%. Raw cotton prices continued to edge up. So did corn, at $2.27, only 9-c- below the 1927 record price. What would stop the commodity rises, short of OPA, in the face of the enormous demand for food?

Last week the Department of Agriculture, in its July crop report, gave one answer: a bumper crop. If the present good weather holds, the U.S. should have a record corn crop of 3,341,646,000 bushels, 28% better than average; and 1,090,092,000 bushels of wheat. There was even optimistic talk that, with good crops in Canada, France and other countries, the demand for food would ease and grain prices would come down. Meanwhile, the retail prices of everything made of grain, bread, syrups, etc. were bound to go up to match the sky-high wholesale prices.

Stable Industrials. Outside of foods, many manufacturers were not only ready to hold the line, but honestly thought that with capacity production they could. Most sanguine was General Electric's Charles E. Wilson, who has insisted all along that prices should be held at prewar levels. He announced flatly that there would be no general price rise for G.E. products. Nor did he think prices of electrical products, in general, would rise. Said he: "Competition [will] soon bring the old law of supply and demand into play in this field." His evidence: G.E. is turning out 1 ,000 washing machines a day, 10,000 refrigerators a "week, close to prewar levels. Production of radios, clocks, irons is climbing fast.

The automobile industry also seemed ready to help Charlie Wilson sit on the price lid. Some of Detroit's motormakers were reported to have told Washington officials that they would not boost car prices. The big "if" was young Henry Ford II. Odds were that he would not boost prices. If he didn't, the dog-eat-dog competition in the auto business (most automakers expect the present seller's market to be gone in a year) would probably keep the others down too. And auto and truck production, rising fast, was up to 73,500 cars last week, up from 42,300 the week before.

Were there enough Halls and Wilsons to keep the lid on? No one could yet say. But the demand for almost everything was still enormous, and pockets were filled with cash with which to buy. In May, income payments to individuals were at $12,737,000,000, highest since V-J day, and only slightly below May 1945. This buying pressure might prove too great for even the staunchest hold-the-line advocates. If commodity prices keep going up, then the lid would go up too.

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