Prior to midsummer 1942 few people realized that global warfare would tax to the limit our agricultural resources. In 1939 an immediate result of the European war had been to reduce foreign demand for American agricultural produce. Our normally large surplus of commodities such as wheat, corn, and cotton, of which we had approximately a 2-years' supply, increased with each harvest. We also began to pile up stocks of other commodities for which there previously had been substantial export markets. After the declaration of war, however, Pacific sources of sugar, oil, fruit, and other foodstuffs were cut off and soon it became apparent that American agriculture, as well as American industry, would have to be mobilized in a great productive effort.
Food for War
By the fall of 1942 existing arrangements for handling food problems had become inadequate. Shortages of meat, fats, and oils, dairy products, and canned foods were bringing home to consumers the effect of war on food supply. These shortages were simply another indication of the growing intensity of the war on all fronts. Military operations then under way in North Africa, Guadalcanal, and El Alamein, and planned for Italy, Western Europe and the Japanese Islands, could be supported only by the most efficient use of all our resources, including food. This pressure brought a reorganization of the War Production Board and a refinement of production scheduling techniques. It likewise required fuller utilization of manpower and better control over the production and distribution of agricultural commodities.
The principal problems in mobilizing food were similar to those which had to be solved in mobilizing steel, copper, manpower, manufacturing facilities, and other strategic resources. Since there was not
enough food to satisfy all needs, available supplies had to be divided among competing uses according to essentiality. Farmers had to be persuaded to use their land and equipment for the production of war-essential crops. Farm produce had to be channeled to processors in proper amounts and to wholesalers and retailers for equitable distribution to consumers. The agencies responsible for performing these jobs had to be tied in with the general civilian war organization and coordinated with the activities of other agencies dealing with related problems. The story of how these problems were handled should be placed against a background of the food situation as it appeared in the fall of 1942.
The Department of Agriculture estimated in September 1942 that total food production in the coming year would be substantially above the average for the prewar period 1935-39. Increased production of meant, for example, was estimated at 49 percent above the prewar average, or 24 billion pounds. Production estimates showed substantial increases for other foods.
Food shortages were certain in spite of this favorable production picture. In Europe, Russia, and China there would be malnutrition and actual starvation. In the United States, the people would eat more than they had ever eaten before, but would not be able to get as much as they would wish to buy. The Department of Agriculture estimated that spendable income in 1943 would be about 65 percent above 1935-039 levels, much of it in the hands of lower income groups who never had been able to afford an adequate diet. Moreover, because of the disappearance from the market of new cars, washing machines, radios, and other durable goods, spendable income available for the purchase of food would be about 97 percent higher than the 1935-39 level. Again in terms of meat, this meant that the estimated supply of 140 pounds per person would be 14 pounds more than the prewar average but 24 pounds less than the potential 1943 civilian demand of 164 pounds per capita (charts 42 and 43).
Expanding military requirements also contributed to developing food shortages. By the end of 1942 it had been determined that military plans for 1943 would require an Army of 8.2 million and a Navy of approximately 1.8 million men. A military force of this size would consume enormous quantities of food. Navy menus, for example, provided each 1,000 sailors with monthly allotments of 32,000 pounds of meat, 2,400 pounds of butter, 4,500 pounds of eggs, and 800 pounds of cheese, in addition to large quantities of dry groceries and fresh fruits and vegetables.1 these menus gave each sailor more
Chart 42. Per Capita Consumption of Selected Foods.
than twice as much meat, three-fourths again as much butter, one-third again as many eggs, and two-thirds again as much cheese as the average citizen ate in 1942.
Another heavy drain on our food supplies came from the necessity of keeping our allies, chiefly Great Britain and Russia, in the war. Shortly after the fall of France the President had declared, "We will extend to the opponents of force the material resources of this nation" and, through lend-lease arrangements, we began to ship foodstuffs to Great Britain. Russia had lost the Ukrainian sugar and grain-producing areas a few weeks after the Nazi invasion and, in the 1942 summer offensive, the Germans captured the great North Caucasian agricultural area. Large quantities of fats and oils and grain were needed to keep the Red Army in the field, and by December 1942 these requirements were so urgent that at times food was given precedence over steel in the assignment of shipping space. To keep British and Russian diets at the subsistence level in 1943 would take about 10 percent of our total food supply.
Finally, the invasion of North Africa on november 8, 1942, posed for the first time the problem of food for liberated peoples. In contrast to the Germans and Japanese, who were busily engaged in stripping resources of conquered territories, the President stated: "Every aid possible will be given to restore each of the liberated countries to soundness and strength, so that each may make its full contribution to United Nations' victory."2
Aid to our allies, maintenance of the health and efficiency of the civilian population, and full utilization of food as an instrument of warfare required changes in the Government's peacetime food organization. Prior to the declaration of war, when there was little awareness that food would become scarce, administrative problems involving agricultural commodities were handled within the rudimentary defense organization of the Department of Agriculture. As the tempo of the war increased in the months following Pearl Harbor, it became necessary to coordinate the various agencies whose actions affected in one way or another the production and distribution of farm produce. At first, this coordination was provided by WPB, but by the fall of 1942, it was apparent that a more effective food organization was needed. On December 5, 1942, the President by Executive order directed the Secretary of Agriculture to "assume full responsibility for and control over the Nation's food program."3 This order set the pattern of the War Food Administration for the crucial war years. The pages which follow relate the administrative developments preceding the
Chart 43. Production of Selected Foods.
issuance of the Food order and discuss some major problems confronting the Secretary of Agriculture in the first 3 months of 1943.
Immediately after the Nazi attack on Poland and the declaration of war by France and Great Britain, Secretary of Agriculture Wallace set up an advisory council (comprising representatives of farm organizations, the food industry, and consumer representatives) to advise the Government on the wartime problems of American agriculture. The advisory council's approach was that such adjustment in agricultural practices as might be required should come through voluntary cooperation between Government and the food industry rather than by the imposition of regulations and orders. The possibility of using the council as an instrument of such cooperation was lost when a fatal disagreement developed between the representatives of the farm organizations and representatives of the food trade over a food supply organization plan prepared by members of the trade and over the Secretary's proposal to support hog prices at a level which farm organizations feared would become a ceiling.
Administrative Developments Prior to December 1942
The next development came as the Nazis swept through the low countries and France: Mr. Chester C. Davis was appointed Agricultural adviser of the National Defense Advisory Commission. Under the President's concept of the NDAC, the agricultural adviser's function was to advise the President on all aspects of agriculture in relation to the defense program. Mr. Davis advised on matters such as the disposition of surpluses, place of the farm populations in the defense program, and the development of new agricultural products for defense. All operating functions of the department of Agriculture remained intact.
As the parts of the National Defense Advisory Commission began to be transmuted into more formal Government agencies, such as the Office of Production Management, the question of what to do with the NDAC Agricultural Division arose. Mr. Davis suggested to the president on March 6, 1941, that an office of food supply be established, either as a part of the Office for Emergency Management and coordinate with the Office of Production management, or as a division of the Department of Agriculture. The statutory responsibilities of the Secretary of Agriculture with respect to production, storage, and distribution of food, and the availability of trained personnel in the Department were cited as reasons for setting up the office in the Department of Agriculture. Under the Davis plan, the food organization would have been headed by a strong administrator reporting to the Secretary of Agriculture but acting under a Presidential directive; it would gather and maintain current information in regard to
food supplies and requirements; and formulate and execute the Government's food program.
The President did not set up the office of food which Davis recommended. He stated that "the work of taking coordinated action with regard to food should be done in the Department of Agriculture" because they "have the facilities for this work" and because there would be "danger of confusion and duplication" if this work were done outside, the President added that, since the British were interested in obtaining only a few commodities and information about them was quite complete, "it seems inadvisable just now to risk creating the alarm that might arise from a broad survey of agricultural supplies. . . . For the same reason, I do not think that we need to establish an office of food supply or a food administration at this time." The decision was contrary to the general pattern which the President followed in establishing international agencies outside the Department of State, and the War Labor Board outside the Labor Department.
Instead, the President abolished the Agricultural Division of the National Defense Advisory Commission in May, 1941, and transferred its function to an Office of Agricultural Defense Relations which was placed, at the President's request, in the immediate office of the Secretary of Agriculture. The President described the wartime job of the USDA as follows: "first, the guarantee of an adequate supply of food for the needs of this nation and supplemental needs of those nations whose defense in essential to this country, and, second, the provision of sufficient agricultural raw materials for expanded defense production".4 The President's letter stated that OADR should be considered "an integral part of the emergency defense organization" and outlined broad functions which would have OADR an over-all defense organization for the department of Agriculture. In practice however, OADR was confined to liaison with WPB and OPA on priority and price problems.
The food production function emphasized by the President fitted easily into the Department's peacetime activities. For more than 50 years, improvement of agricultural production had been a major objective of the Department, and since 1933, the Department had engaged actively in planning and controlling the kinds and amounts of farm produce and in helping the farmer market his crops. On December 11, 1941, the Secretary announced a broad reorganization of the Department, under which the various agencies responsible for these activities were regrouped for the purpose of providing better coordination. He established the Agricultural Marketing Administration
and Agricultural Conservation and Adjustment Administration. He authorized county defense boards composed of representatives from all Federal agricultural agencies within a country. The county representative of the Agricultural Adjustment Administration served as chairman. The boards, which later became known as war boards, had as a principal objective the coordination of agricultural defense activities at the county level. They were not notably successful in achieving coordination, largely because the chairman of the boards had no authority over the representatives of the constituent agencies.
There was no serious disagreement between Agriculture and OPA until after the declarations of war. The Secretary of Agriculture's membership on the Price Administration Committee of the Office of Price Administration and Civilian Supply gave him an opportunity to consult with and advise the Price Administrator on agricultural price policy.5 Meanwhile, the Price Administrator had adopted the policy of changing price schedules where such changes were necessary to expedite the flow of any material,6 and had stated, on April 30, 1941, "I will recognize what the Congress and the present Administration have always recognized and written into law--namely, that the prices of many farm products in the past years have been too low to provide the farmer with a decent wage for his labor".7 Within this policy framework the Department of Agriculture and the Office of Price Administration and Civilian Supply collaborated actively in curtailing speculative sales of sugar futures and in dealing with price rises and emerging shortages of cotton textiles.
After establishment of the War Production Board on January 16, 1942, responsibility for management of the food supply was distributed among several war agencies whose authority limited that of the Department of Agriculture. The Department was active in planning the general outlines of farm production and the use of agricultural resources. Facilities of the Commodity Credit Corporation and the Agricultural Marketing Administration, which had been developed for the procurement and distribution of surplus agricultural commodities, were used in purchasing for Lend-lease. Under the Emergency Price Control Act of 1942, the Secretary of Agriculture shared with the Price Administrator responsibility for the issuance of maximum price regulations affecting agricultural commodities. Food functions of the War Production Board were exercised through several industry branches of the Materials and Industry Operation Division and through the Requirements Committee. The most important of these activities
were formulation of estimates of food and fiber requirements for industrial purposes; control of the amount of industrial capacity, raw materials, and labor used in the manufacture of farm machinery and food-processing equipment; and assignment of shipping space for importation of agricultural products in critically short supply. The Office of Price Administration was responsible for preventing inflationary price rises in agricultural products and for rationing scarce food supplies when directed to do so by the Chairman of the War Production Board. Agencies concerned with foreign relations, such as the Department of State, the Board of Economic Warfare, and the Lend-Lease Administration, were interested in procuring foreign supplies and in shipping food to the Allies and friendly neutrals. Farm labor eligible for military service was controlled by the Selective Service System.
This distribution of authority did not give any single agency clear-cut authority to plan for future emergencies but it seemed to be reasonably adequate as long as there was an abundance of food. As supply diminished, however, officials began to think of a greater concentration of authority. Acting under instructions of Mr. Harry Hopkins, early in 1942, representatives of the Bureau of the Budget and the Departments of Agriculture and Justice drafted an Executive order centralizing food management powers in the Department of Agriculture. The impetus for this particular proposal had come largely from persons interested in more effective arrangements for handling lend-lease purchases. Documents accompanying the draft order stated that the Department had established "working relations with existing food procurement agencies of friendly nations" and that it was desirable for this Government to have a single agency with which foreign missions could work. Action on the proposal was delayed pending study of the general organization of our foreign economic activities.
A few weeks later this issue-the way in which management of domestic food supply should be related to foreign trade in food--came up in a proposal for alleviation of a critical shortage of fats and oils. The Chairman of the War Production Board recommended that the Department of Agriculture take over the job of ascertaining the available supplies of fats and oils; of determining minimum requirements for industrial and consumer uses; and of devising a program to reduce consumption and to distribute available supplies among the most essential users. The Secretary of Agriculture was unwilling to undertake this responsibility "unless there is control of foreign purchases in the same agency which has responsibility for domestic production." He pointed out that imports of fats and oils became a part of our total supply and that purchases abroad should be
"synchronized with foreign purchases of the British." The issue, according to the Secretary, was not "one of being able to work satisfactorily with the Board of Economic Warfare or with any other agency. It is simply a matter of centralizing and consolidating responsibility in the interest of speedy and effective action."
Complete authority for food management could not be concentrated in a single agency because solutions devised for food problems would have a profound effect on matters equally vital to successful prosecution of the war which could not be handled effectively by a food agency. Thus, "speedy action" could not be taken on fats and oils without reference to industrial and military requirements for glycerin, a byproduct of soap. Some of the factors which had to be considered in estimating total food requirements were: (1) size of the Army and navy and the disposition of military forces; (2) a time schedules for the invasion and occupation of enemy-held territory; (3) migration of the civilian population and increased employment in physically exacting jobs in heavy industry; (4) production schedules for industrial alcohol, synthetic rubber, and explosives; and (5) allotments to be made to the civilian populace. Estimates of supply had to take into account availability of foreign products as well as various factors affecting domestic production. In carrying out a food-production program, it was necessary to determine which commodities were most essential to conduct of the war; to persuade millions of farmers to plant essential war corps and to take risks involved in shifting to new crops; to balance the need for imported foodstuffs against requirements for manganese and chrome and to assign shipping space accordingly; to divide the Nation's labor force among farms, factories, and the military services; to decide whether plants should continue to make farm machinery and food processing equipment or convert to production of tanks and guns; and to decide whether chemicals should be used to manufacture antityphus and antimalaria insecticides or refrigerants for food storage facilities. In controlling food distribution, provision had to be made for equalizing supplies between the country's producing and consuming areas; procuring food for military services without disruption of local markets and in accordance with seasonal fluctuations of supply; and for moving raw foodstuffs to processors so that luxury commodities were not produced at the expense of necessities or supplies of processed foods were not taken out of the ordinary trade channels.
Detailed decisions on all such matters had a common objective: mobilization of the Nation's resources so that the greatest and swiftest possible destruction could be brought down upon our enemies. This objective required the daily adjustment and fitting together of essential interests and activities of the Joint Chiefs of Staff, the War, Navy,
State, and Agricultural Departments, the War Production Board, Office of Price Administration, and other war agencies. Consolidation of authority over food, transportation, or manpower could eliminate some problems but, at the same time, it would create many others. There was no escape from the problem of adjustment among war agencies. If the Department of Agriculture were given responsibility over foreign trade in food, as suggested by the Secretary, its decisions and actions would have to be related to work of the military, diplomatic, and economic missions abroad--and to the work of agencies responsible for fuel, rubber, minerals, and so forth if the suggestion were extended to other commodities. At the time the Department sought control over foreign purchases of food, an effort was being made to "centralize and consolidate" authority over foreign economic affairs. The conflicting plans of organization were essentially irreconcilable. This did not mean, however, that administrative arrangements for food management could not be clarified and strengthened.
The next step in the development of the war food organization was the establishment on June 4, 1942, of the Food Requirements Committee reporting to the Chairman of the War Production Board.8 The Committee was headed by the Secretary of Agriculture and comprised representatives of the War, STate, and Navy Departments, the office of Price Administration, the Board of Economic Warfare, the Office of Lend-Lease Administration, and three WPB representatives. Under the general direction of the CHairman of the War Production Board, the Chairman of the Food Requirements Committee was authorized to determine the total food needs and the amount required to balance supply and need, and to divide food supplies among the several users--Army, Navy, foreign nations, civilians, and Government agencies. The WPB Requirements Committee retained its authority over supplies and equipment needed in the production of food, with the Chairman of the Food Requirements Committee supplying information and advice on amounts required to carry out the food-production program. If the Chairman of the Food Requirements Committee disagreed with the Chairman of the WPB Requirements Committee over division of agricultural products between food and industrial uses, the Chairman of the War Production Board decided the issue.
Food-production plans were formulated by the Food Requirements Committee and were carried out by the Department of Agriculture and War Production Board. The Department was responsible generally for growing food, adjusting domestic agricultural production, importing foodstuffs, and formulating food-conservation programs.
The War Production Board Food Division was responsible for directing the processing of raw foodstuffs--for example, the manufacture of candy, soft drinks, and bakery products. Processing of nonfoods derived from agricultural materials, such as soap and clothing, was under the direction of the WPB Materials Division. The Office of Civilian Requirements had a staff working on civilian requirements for various kinds of food. Each agency was responsible for controlling distribution of the commodities within its jurisdiction. The Office of Price Administration, however, was designated the agency which, subject to the directives of the War Production Board, would be in charge of consumer rationing.
The Food Requirements Committee, however, did not prove to be an effective administrative device. At the outset there was a problem of making the new committee a part of the EWPB organization. The personnel of the WPB was drawn largely from industry, and its attention and major interest were industrial production rather than food supply and management. At times, internal conflicts and confusion incident to rapid expansion of the agency made it difficult to obtain decisions within the War Production Board. For example, action on the fats and oils problem (which in considerable measure had been the immediate impetus for the setting up of the Food Requirements Committee) was delayed for months while questions of jurisdiction, the necessity for action, and the kind of action to be taken were thrashed out within the Food Requirements Committee, the Requirements Committee, the food branches, and the Civilian Supply Division. The Requirements Committee tended to schedule in great detail the material and equipment needed for the food production program. Under this practice matters such as steel for milk cans and farm fencing were the subject of lengthy negotiations within the War Production Board. Although some of these delays were due to the primitive production scheduling techniques in use at the time, they imposed an additional burden on the Food Requirements Committee which probably would have failed under the most favorable circumstances.
These difficulties (which were less serious than might have been expected in a new agency with a job of such magnitude) were matched by weaknesses within the Food Requirements Committee structure. The Chairman of the Committee was responsible to the Chairman of the War Production Board but, as Secretary of Agriculture he directed a department which, by reason of its standing with farmers, was a strong candidate for the food administration job. The Chairman of the Committee designated the Office of Agricultural War Relations as staff to the Food Requirements Committee. This group consisted of top-policy assistants to the Secretary who, aside from their work
with the Food Requirements Committee, were primarily concerned with the programs and operations of the Department of Agriculture. Partially as a result of this double demand on the time of the staff, the Food Requirements Committee was slow in estimating total food requirements and in laying out a 1943 production plan. Meanwhile, requirements for particular commodities were considered in the absence of any plan for total requirements; the Department of Agriculture continued its work in supply and requirements planning and there seemed to be no systematic effort to fit the two activities together.
Weaknesses in the Food Requirement's Committee were apparent in its method of handling emerging meat shortages. Although the Committee's responsibility was supply and distribution, the OPA representative was an employee of the price department and, because in part of the loose internal organization of the OPA, was not able to speak with authority about rationing matters. In July, the Chairman of the Food Requirements Committee stated that general supplies of meat were adequate but that the OPA should be in a position to begin rationing in approximately 1 year.9 In September he recommended that OPA begin rationing as quickly as possible; later in October the Food Requirements Committee announced that meat would be rationed in December. Technical difficulties, such as the printing and distribution of approximately 130 million ration books, made it impossible to start rationing on the announced date and an interim "voluntary rationing" plan had to be devised. Part of the difficulty was undoubtedly due to faulty statistics on meat supply. But more effective cooperation between the Food Requirements Committee and OPA rationing officials would have simplified the problem of stretching limited supplies until rationing could be started on March 29, 1943.
Difficulties in pricing food commodities, which also involved the relations of the Department of Agriculture and the Office of Price Administration, became acute in the summer of 1942. Questions such as the levels at which maximum prices should be fixed, the coverage of the commodities to be controlled, farmer liability under penalty provisions of price regulations, and relations between OPA food price ceilings and Department of Agriculture crop loans and price support payments programs arose continuously between the two agencies. The Food Requirements Committee had no authority in food price matters and in the absence of some central point where decisions could be made, these interagency problems were the subject of lengthy negotiations between the agencies involved. The rather loose internal organization which characterized both the Department of Agriculture
and the Office of Price Administration frequently prolonged these discussions by making it difficult to obtain clear-cut statements of agency points of view.
This particular deficiency--lack of a device for reconciling disagreements of food price policy--was dealt with in the Stabilization Order of October 3, 1942, by giving the Economic Stabilization Director authority to settle differences between the Department of Agriculture and the Office of Price Administration.10 With the establishment of OES, important segments of the food management function were dispersed among the War Production Board, the Department of Agriculture, the Office of Economic Stabilization, and the Office of Price Administration. Under these arrangements, differences between the Price Administrator and the Secretary of Agriculture were referred to the Chairman of the War Production Board if they involved supply or distribution policies, but to the Director of Economic Stabilization if they involved the pricing of agricultural commodities. The pull and tug which these arrangements permitted and the shortening of food supplies called for additional action.
The War Production Board, supported by representatives of the food distribution trade, sought to consolidate and strengthen its food functions. On October 24, the Chairman recommended the establishment within the WPB of a Food Director with powers comparable to those of the Rubber Director. The statutory powers of the Department of Agriculture and of the Office of Price Administration would not have been affected by Nelson's proposal but "central direction and coordination" would have been given to the food program "in all of its phases." "Without such central direction," Nelson wrote, "there is sure to be lost motion and disastrous delay in solving this vital problem.:"
The Secretary of Agriculture opposed establishment of a Food Administrator as suggested by Chairman Nelson of the War Production Board. A WPB Food Administrator "could not possibly coordinate the food programs of the United States and the United Nations." The Secretary noted that his positions as cochairman of the Combined Food Board and chairman of the WPB Food Requirements Committee provided "a focal point at which to deal with the problems of supply, production, exchange, and shipping of food" and that a Food Administrator had "already been set up through the establishment of the Food Requirements Committee." The food situation could be handled satisfactorily without formation of "another large administration which would duplicate and conflict with agencies
already in existence." As an alternative, Mr. Wickard proposed to strengthen the Food Requirements Committee by giving it authority to see that its decisions were carried out; and to transfer from the War Production Board to the Department of Agriculture "power to issue orders for the allocation, reservation, and rationing of food" and power "to decide the agency that will administer an allocation or reservation order." Authority to "fix prices and do all consumer rationing" would be retained by the Office of Price Administration.
The proposals of Nelson and Wickard did not provide a clear-cut basis for action. Appointment of a Food Director within the War Production Board would have been consistent with WPB's role as mobilizer of the Nation's economic resources and made possible better
Chart 44. Prices Received by Farmers.
cooperation among WPB units interested in various aspects of agricultural production. As long as the Department of Agriculture and the Office of Price Administration by statutory authorization controlled important segments of food programs, however, it was not likely that a WPB Food Director could give unified direction to the food program "in all of its phases." The Wickard proposal for "strengthening" the WPB Food Requirements Committee at first glance seemed to retain the concept of the War Production Board as the economic mobilization agency. But transfer of food allocation authority to the Department of Agriculture, as suggested by the Secretary, actually would have deprived the War Production Board of control over food. Authority to carry out WPB decisions, made by the Food Requirements Committee, would have been in the hands of another agency--the Department of Agriculture. Since Wickard served as Chairman of the Food Requirements Committee and as Secretary of Agriculture, decisions relating to farm production presumably could be executed without such a transfer. Decisions on processing and distribution matters probably could have been carried out satisfactorily by WPB. Although the Department of Agriculture unquestionably had the support of farmers and farm organizations, it had not established effective relations with food processors and distributors.
A variety of influential organizations and persons favored the transfer of food management responsibility to the Department of Agriculture. The President of the American Federation fo Labor supported the Secretary of Agriculture for the post of Food Administrator in testimony before a Congressional committee and a similar recommendation was sent to the White House by the Congress of Industrial Organizations, and the Railway Brotherhoods. The National Farmers Union and former President Herbert Hoover were also on record in favor of centralizing wartime food responsibilities under the Secretary of Agriculture. Other organizations, such as the National Association fo Manufacturers, the National Council of Farmer Cooperatives, the National Grange, and the American Farm Bureau Federation also urged the establishment of a strong food administration, located within either the Department of Agriculture or the Office of Economic Stabilization.11 Of the three major alternatives--the Department of Agriculture, the War Production Board, and the Office of Economic Stabilization--the President selected the Department of Agriculture and issued the Food Order of December 5.
The organization established under Executive Order No. 9280 was built around the four major jobs which the Secretary of Agriculture was directed to perform: (1) determination of the total national and foreign food requirements; (2) formulation and execution of a production program to supply food in quantities sufficient to meet total requirements; (3) establishment of allocation and priority controls to bring about proper distribution of available food supplies; and (4) procurement of food for the military services and other Government agencies.
Operations Under the Food Order of December 5, 1942
Within the Department of Agriculture operating agencies concerned primarily with production, such as the Farm Security Administration and the Agricultural Conservation and Adjustment Administration, were transferred to a new Food Production Administration. The Agricultural Marketing Administration and other agencies concerned primarily with distribution were transferred to a new Food Distribution Administration. Each of these administrations was directed and supervised by an Administrator appointed by the Secretary of Agriculture. Organizational arrangements were completed by the abolition of the Food Requirements Committee of the War Production Board, the appointment of a Food Advisory Committee to the Secretary which included representatives of the military services, State Department, Lend-Lease Administration, and the Board of Economic Warfare, and by transfer to Agriculture of War Production Board activities and personnel concerned with food.
This food organization was essentially the Department of Agriculture, its components somewhat rearranged and its personnel augmented by specialists transferred from WPB. The Department of Agriculture provides the single example in World War II of an existing agency undertaking to plan and administer a major segment of the war economy. In other field,s new agencies were established to handle jobs which might have been given to such organizations as the Departments of State or Commerce, or the Interstate Commerce Commission. The experience of the food administration thus is valuable in showing some of the uses and limitations of an "old line" department in war administration.
During the first quarter of 1943, the general outline of war food policies was shaped. Some of the policies dealt with fundamental questions of long-run significance, such as the extent to which existing production, social, and economic patterns of American agriculture should be adjusted to war conditions. other policies were concerned with more immediate problems: the rising demand for agricultural
commodities; the necessity for more equitable distribution of food; uncertainty that rich harvests made possible by unusually favorable weather in 1941 and 1942 would be repeated in 1943; and the availability of processing and storage facilities. In dealing with these matters, the Department of Agriculture was called upon to develop new points of view and new conceptions of the "farm problem." The balance of the chapter describes the Department's response to this new situation.
Programming Agricultural ProductionThe Department was only partially successful in getting farmers to produce essential foods in adequate amounts. Total food production established new records and production of crops such as peanuts and soybeans, rich sources of essential oils, likewise increased substantially. But throughout the war many farmers used imported fertilizer, labor deferred form military service, and fertile land to grow short-staple cotton, of which there was a surplus, watermelons and other low-priority crops.
As we have seen, the War Production Board had to deal with one difficulty after another in bringing into balance its various production programs for raw materials, components, and end products. The scheduling of agricultural production was a much more complex job, because of a number of factors which the Department of Agriculture could not easily control. First, several million small producers, many of them operating family-type farms, comprised the "manufacturing plant." The "little fellows" of industry, it will be recalled, were not drawn into war production with notable success, even with special measures such as subcontracting drives and the Smaller War Plants Corporation, etc. Second, these millions of farmers were accustomed to certain crops and had learned the most satisfactory way of growing them and of minimizing dangers of loss. They were reluctant to plant new crops unless convinced that the Government really wanted them and was willing to help out by supplying necessary machinery and by underwriting a substantial part of the risk. In this attitude the farmers did not differ from the manufacturers who insisted on cost-plus contracts and priority assistance in obtaining machinery and raw materials. Third, traditional production patterns were reflected in "parity" legislation passed since 1933 and designed to bolster the prices of basic crops such as cotton, corn, wheat, rice, and tobacco. Fourth, officials of the Department of Agriculture who had helped formulate parity legislation and were responsible for its administration were accustomed to work within the parity framework. They were slow to see that 1933 techniques, developed to deal with surpluses and low prices, were not relevant in a war economy of scarcity and high
prices. Finally, the parity structure was guarded jealously by potent farm-pressure groups and by a bloc of Congressmen whose Democratic leaders, by reason of seniority, were chairmen of powerful House and Senate Committees.
All of these factors conditioned the process of scheduling food production, the first step of which involved the determination of over-all requirements.
RequirementsSection 1-a of the December order directed the Secretary of Agriculture to ascertain "the military, other governmental, civilian, and foreign requirements for food, both for human and animal consumption and for industrial uses." The organization for, and procedure to be followed in, the determination of requirements were outlined by the Secretary on January 26, 1943. Requirements for all claimants were assembled and adjusted by the Director of Food Distribution and reviewed by the Secretary of Agriculture and the Food Advisory Committee. Foreign governments purchasing through lend-lease arrangements submitted their estimates directly to the Food Distribution Administration; the Department of State and the Board of Economic Warfare acted as claimants for foreign governments buying on their own account, and as a general practice other users submitted their estimates directly to FDA. THe Combined Food Board, established in June 1942 and consisting of representatives of the United States and the United Kingdom, provided information on world supply and advised on allocations of particular commodities. Preliminary adjustments were worked out by the Requirements and Allocations Branch of the FDA in collaboration with the Production Programs Branch of the Food Production Administration, with final review by the Food Advisory Committee established by the Executive order.12 In practice these arrangements did not produce realistic estimates of food requirements, especially of military requirements.
The determination of military food requirements involved new problems. There was little experience to point the way to realistic supply planning for a military force of more than 10 million men which was expected to fight all over the world. In practice, the first step toward estimates of total requirements was to plan basic menus in collaboration with the country's best food specialists. Menus had to be devised which would maintain the energy and stamina of men convoying in the North Atlantic, engaging the japanese in the South Pacific, and fighting Nazis in the North African desert and on the continent of europe. Factors such as seasonal fluctuations in supply,
availability of shipping, refrigeration and storage space, and the food preferences of soldiers and sailors also were important.
The second step in estimating military food requirements was to obtain reasonably accurate statements of total strength, and, especially for the Army, some indication of the distribution of personnel among the several theaters of operations. This information was vital to requirements planning but frequently was not available to the requirements staff. Decisions on the grand strategy of the war were made by the heads of State and the Joint Chiefs of Staff at levels far removed from the persons responsible for estimating food requirements. Accurate planned manpower figures for the Army were not regularly available for food requirements purposes, because of the partial failure of Services of Supply to distribute manpower figures to authorized persons. Variation in daily camp strength contributed to wastage of substantial quantities of food, particularly in the first years of the war.
Navy estimates of requirements were based primarily on past (largely peacetime) experience and on "planned average personnel." Wartime changes, such as food lost with ship sinkings, transfers of food in combat areas to ships of our Allies, and the feeding of Army personnel from Navy stocks and Navy personnel from Army stocks contributed to the inaccuracy of Navy food requirements figures.
In practice, the procurement device known as the "set-aside order" tended to exaggerate the size of military food requirements. Set-aside orders required the processor to set aside a stated percentage of his output for Government purchase, to insure that the military would be able to buy the food it needed. Such orders generally were prepared before total production figures were known, and it was thought necessary to add a generous "safety factor" to the estimate of requirements. As a result, the military requirements which the set-aside percentages represented tended to be liberal when, as in 1941 and 1942, crop yields met or exceeded production goals. War Production Board Order M-86 was an example of requirements estimates inflated through the set-aside order device; several million cases of the 1942 pack of vegetables, fruit, and milk later were turned back to civilian account.
In addition to these technical problems, the Department of Agriculture, a civilian agency, was not in a position to question military estimates of the food required by the broad strategy for the conduct of the war. Particularly with food relatively abundant, as it was in January 1943, it was difficult to reduce the requests of the Army and Navy. The Secretary of Agriculture spoke for the people in saying "our first obligation is to our own fighting forces."13
Foreign requirements were determined in large measure by military and diplomatic considerations of the highest order. Conversations between President Roosevelt, Prime Minister Churchill, and Marshal Stalin resulted in long-run commitments which gave an air of inviolability ot the requests of Russia dn Great Britain but which were not useful in determining the accuracy of specific estimates. Instead, the quantities of food shipped to these countries were determined principally by the availability of merchant and escort vessels. Estimates of foreign food requirements were based only partially on nutritional needs. Major consideration was given to the availability of shipping which in turn varied with the rate at which Liberty ships left the ways, the length of convoy routes, and the effectiveness of antisubmarine measures. Early in 1943, the principal foreign-requirements problem was to obtain definite statements of Russian requirements, consolidate them with the requests of other Allies, and balance the total program against the available food supply and shipping space.
Formulation of relief requirements for liberated countries involved organizational and administrative considerations as well as the availability of shipping. The secrete of the North African invasion was so well kept that responsible civilian agencies were unable to plan necessary relief operations. On December 4, 1942, the President established within the Department of State the Office of Foreign Relief and Rehabilitation Operations and appointed Governor Herbert Lehman as Director.14 Following the establishment of OFRRO there were, in addition to the Army and the Red Cross, three agencies actively interested in the food program for North Africa--State, Lend-Lease, and the Board of Economic Warfare. None had been made responsible for planning the food requirements and appearing as claimant before the Department of Agriculture.
The North African Economic Board, established in a preliminary attempt to integrate the various foreign missions operating in Africa, was also outside the requirements-allocation process. Requirements submitted by the Board were treated as a matter for procurement rather than for review, possible reduction, and incorporation in the requirements estimates. The North African Economic Board requests, however, were not a part of the program of any recognized claimant agency, and, for a time, they were handled as "unallocated emergencies" and charged against contingency reserves. Similarly, requests from OFRRO for a monthly allocation of 10 billion pounds of cheese and for large quantities of fats and oils were accepted with the understanding that compensating adjustments would be made in the requirements of other foreign countries, principally Great Britain.
Estimates of civilian food needs were prepared and justified by Civilian Food Requirements Branch of the Food Distribution Administration. Planning of civilian food needs had to take into account the fact that no single item of food is indispensable and no particular quantity is a minimum requirement, provided other foods are available. Sectional and cultural variations in eating habits and individual likes and dislikes were limiting factors altering patterns of civilian consumption. Had it been possible to develop a minimum diet for civilians, to prescribe standard menus, and to estimate civilian requirements on the basis of per capita allowances, the problem of arranging the distributive system so as to provide each individual with necessary food would have remained. Consumer rationing would reserve for each person his share of rationed foods, but devices such as community or plant feeding, school lunches, and a food-stamp plan would be needed if consumers in the lowest income groups were to get their allotted shares.
In the formative stages of the requirements process, there was a tendency to view civilian requirements as the residuum that remained after more pressing needs had been met. The difficulty of obtaining precise statements of minimum civilian requirements, high production levels, and the more easily perceptible relation between victory and military and foreign requirements contributed to this attitude. pressure to control rigorously military or foreign requirements was at a minimum so long as the civilian residuum was sufficient to maintain consumption at or above prewar levels. In the absence of an articulate and effective consumer production organization the long-standing policy of the Department of Agriculture of increasing the amounts of farm products used by the ordinary consumer was perhaps the one factor which tended to give full expression to civilian requirements. Sharp rises in purchasing power had eliminated the necessity for special measures to increase civilian consumption; but it was important to postwar agricultural prosperity that high-level consumption habits be established.
Production OrganizationThe second major responsibility delegated to the Secretary of Agriculture by Executive Order No. 9280 was to "formulate and carry out a program designed to furnish a supply fo food adequate to meet such requirements, including the allocation of the agricultural productive resources of the Nation for this purpose." Experience in production planning which the Department had acquired since 1933 would be useful in its new undertaking; but the existing organization would be severely strained by the magnitude of the war food job. Because of defects previously discussed, the requirements estimates
were not very useful in building up production goals. The individual farmer had to be brought into the production program so that he would produce the crops which were most needed and which, with his resources of land, labor, and machinery, he could produce most efficiently. In mobilizing the farmers, the Department met resistance (in some areas organized) to changes in customary farming methods and crop patterns. And it had to work through a cumbersome administrative structure of four field organizations (Extension Service, Agricultural Adjustment Agency, Farm Security Administration, and Soil Conservation Service) which diffused and made less effective its contacts with farm groups.
The Executive order of December 5 attempted to deal in a broad way with the organizational problem by establishing a Food Production Administration, comprising the Agricultural Conservation and Adjustment Administration (except the Sugar Agency), the Farm Credit Administration, the Farm Security Administration, and parts of the Bureau of Agricultural Economics, the Office of Agricultural War Relations, and the food production activities of the War Production Board.15 Mr. H.W. Parisius was appointed Director of Food Production with the job of devising an organization scheme which would "consolidate or integrate" and mobilize under single direction, the various departmental activities concerned primarily with production.16
The principal agencies involved were the Agricultural Adjustment Agency, the Farm Credit Administration, the Soil Conservation Service and the Farm Security Administration. The Agricultural Adjustment Agency had, under the Soil Conservation and Domestic Allotment Act, general responsibility for promoting soil conservation practices, adjusting crop acreages, and for improving the economic position of the farmer through commodity loans and various types of subsidy payments. It had an organization which extended from Washington to the individual farmer and employed on a part-time bases approximately 100,000 farmers in addition to a staff of full-time Federal employees. The Farm Credit Administration made loans to farmers, ranchers, and farmer cooperatives, and conducted its business on sound banking principles which required suitable security as a prerequisite for a loan. The Soil Conservation Service tried to get farmers to use methods which would reduce soil erosion. The Farm Security Administration had a field organization with some
2,700 field offices, and a staff of 11,000. It was set up to assist low income rural families to become self-supporting, and to finance at nominal service charges the purchase of farms by farm tenants, share-croppers, and laborers. As successor to the Resettlement Administration, Farm Security was responsible for the management of Government-owned or sponsored resettlement projects, and it also provided transportation and shelter to migrant workers. In the main the supporters of the Agricultural Adjustment Agency and the Farm Credit Administration were the larger, more successful farm operators; the Farm Security Administration concentrated its efforts on small family-type farms which, with more efficient management, could contribute substantially to the food supply.
Mr. Parisius' effort to integrate the diverse interests and points of view of these agencies was abortive. First, he proposed to Secretary Wickard that the work of the Food Production Administration in Washington be grouped in two broad divisions concerned principally with production adjustment, credit, and farm labor. The field organizations of Farm Credit, Farm Security, Soil Conservation Service, and AAA also would be consolidated in a unified field organization serving the entire Food Production Administration. Nine regions, following closely the Farm Security regional pattern, would be established, with actual operations conducted through State and county offices. To supervise this consolidated field organization, Mr. Parisius proposed the name of C.B. Baldwin, Administrator of Farm Security Administration.
The Secretary apparently was not enthusiastic about this plan, especially the suggestion that Mr. Baldwin head the FPAS field organization. He approved, however, the unification of the field organization. Secretary Wickard later decided that a sweeping reorganization should be postponed until June 1, presumably until after the planting season. meanwhile, personnel of the Agricultural Adjustment Agency became suspicious of the Parisius proposal, because of the suggested consolidation of the field staffs of AAA and Farm Security.
After Secretary Wickard's decision not to push immediately a general reorganization of the food production agencies, Mr. Parisius recommended consolidation of the loan activities of Farm Security and Farm Credit. He hoped to facilitate this reorganization by appointing as chief of the Financing Branch a person from Farm Credit who would be acceptable to personnel of the Farm Security Administration.
This proposal, which fell far short of any real unification of the Department's food production activities, met institutional resistances which were fortified by strong external economic interests. Under normal conditions approximately 40 percent of the farmers produce
85 to 90 percent of the volume and value of crops for commercial distribution and about 50 percent of the farmers produce only 10 to 15 percent of the volume. The Farm Security Administration and its supporters urged that the main effort (supervision, manpower, credit, machinery, and fertilizer) be directed toward bringing these small farmers into production of food for market. Operators of large farms already were producing at near capacity and were facing a diminishing labor supply. Mr. Parisius had estimated that 1943 goals could be increased 20 percent by his program. The opponents of the plan argued that the maximum increase would be about 12 to 15 percent; that it would be limited ot dairy products, meats, and vegetables; that feed shortages then appearing would make it impracticable to expand meat and diary production. They concluded that the effort would not be worth while in view of the small amount of produce that would result. After rejection of his second proposal, Mr. Parisius resigned as Director of the Food Production Administration 5 weeks after his appointment. Subsequently the Secretary appointed M. Clifford Townsend, former Governor of Indiana, and, at the time of his appointment, Administrator of AAA, to the Food Production job. A.G. Black, Governor of the Farm Credit Administration, was designated to serve also as "Associate Director of Food Production in Charge of Production Loans," with the loan activities of the Farm Security Administration remaining under the control of the Administrator of FSA.
To help farmers for whom ordinary credit facilities were not available, the Farm Credit Administration later revived the Regional Agricultural Credit Corporation, established in 1933 but, in 1943, in the last stages of liquidation. Through this agency a farmer could obtain a loan or an advance on his crop with the approval of the chairman of his county war board and the county loan representative of the Farm Credit Administration. Such loans were available for the purchase of needed equipment or to finance the production of an essential war crop and did not have to be repaid in the event of a crop failure. This was undoubtedly a step in the direction of bringing the small farmer into production of crops for the market, as proposed by Parisius, but it was not part of a coordinated drive.
The controversy over the mobilization of small farmers behind war food programs had repercussions outside the Department of Agriculture. parisius' plan of using the Farm Security Administration staff accustomed to working with small farmers as a nucleus for a unified field organization was contrary to the American Farm Bureau Federation's views about how the Department's field activities should be organized. Beginning in 1940, Farm Bureau leaders had urged Congress to coordinate field activities of the various Agriculture agencies
through State and country Extension Service offices. Departmental officials were lukewarm toward this proposal, principally because it would have transferred administration of Federal programs to Extension personnel primarily responsible to State institutions.
The Farm Bureau did not like the idea of consolidating departmental field activities on a regional office pattern such as Farm Security's since this would have eliminated the strongest argument (operation of several loosely coordinated agencies within the same area and in some case on the same farm) for their State-county extension. There was also objective to FSA programs designed to help the small farmers and farm laborers improve their economic position. These attitudes provided an interesting contrast to those of pressure groups which pushed for subcontracting to small business.
A substantial group in Congress was in favor of curtailing rather than expanding Farm Security activities. Consideration of Agriculture's 1944 appropriation, pending in February 1943, was the occasion of an almost successful Congressional drive to abolish FSA and divide its functions between the Extension Service and the Farm Credit Administration.17
The Secretary's uncertainty about the merger of Farm Security, Soil Conservation, Farm Credit, and AAA field forces and pressures from Congress and the Farm Bureau help to explain why the Department in the spring of 1943 fumbled the opportunity to organize itself more effectively for work with farmers. Whatever the merits of the Parisius proposals, the objective was sound and with his resignation, the Department apparently decided to go through the war with a minimum of change in its field organizations. Food programs had to be carried to the farmer through several field organizations whose personnel were not accustomed to working closely together and who in some cases were not so disposed. This proved to be a major handicap to effective operation in the food field.
Production ManagementThe first step in production management was the conversion of requirements figures into production goals for each important farm product. If we could obtain, for example, reliable estimates of how much meat, dairy products, and vegetables would be required to meet domestic civilian, military and lend-lease needs, we could determine how many head of cattle should be marketed, whether dairy herds should be increased of reduced, how much livestock would be needed,
the acreage of vegetables to be planted, and so on. As pointed out elsewhere, estimates of requirements were not accurate enough to be of much assistance in managing food supplies. This deficiency, however, was only one of several factors which impaired production planning.
Production goals were an outgrowth of "outlook" statements which the Department had issued for many years, containing estimates of "expected" production and probable prices for each important agricultural commodity. In the fall of 1941 the Department established in an Inter-Bureau Production Goals Committee with commodity subcommittees to prepare systematic estimates of probable production and to recommend production adjustments in light of future needs. In the summer of 1942 the function was transferred to the Office of Agricultural War Relations and, after the December food order, to the Production Programs Branch of the Food Production Administration.18
The close relationship between the production planning and requirements functions led, in March 1943, to the establishment of a joint requirements and production planning staff. Associated with this staff were a number of commodity committees, established to consider questions of supply and production feasibility and to prepare national "production goals." After the national goals were set, the Production Programs Branch fixed State goals, "based on historical sources of food and known acreage." State goals were broken into country goals by State AAA committees and the State war boards. Under these arrangements great weight was given to established patterns of production. Goals tended to be fixed at levels which fitted easily into farmers' attitudes, plans, and habits. Proposed goals were reviewed by representatives of the principal agencies of the Department, who were sensitive to change in agency programs which the goals might require. Rather than risk increases which might glut the market and reduce farmers' income commodity specialists tended to take a conservative view of consumer demand and to favor stabilization of production at levels which would support favorable prices. As a consequence of such factors, announced goals did not always indicate that a maximum of vigor and imagination had guided their formation. Representatives of the Commodity Credit Corporation might reasonably be conservative in reviewing recommendations for greatly expanded production. If expected demand failed to materialize, the CCC would be called upon to buy up the surplus, and the huge prewar stocks, which it had been able to dispose of after the outbreak of war in Europe, was a sufficient reminder that the margin between a shortage and a surplus is sometimes narrow. Goals also
were affected by regional considerations. For example, representatives of the southern region of the Agricultural Adjustment Agency believed that southern farmers should be encouraged to increase milk production and that processing facilities should be expanded to handle the increase. Scarcity of labor and materials, and the fact that the program would have built up resources for postwar competition with the middle western dairy region were factors in the rejection of the program. Considerable weight was also given to competition between States and between crops.
The next step, after production goals had been fixed, was to get the desired acreage planted. When a county representative of AAA visited farmers to talk about plans for the coming year, he asked them to accept their proportionate share of the county goals. In this way national goals were translated into goals for the individual farm. Sometimes it was enough simply to tell the farmer how he could best help in the war. But if he was asked to shift to a new crop, he expected, and properly so, that the Government would assume some of the risk incurred by the shift. As an inducement the Department used commodity loans, price supports, direct Government purchases, and subsidies. This type of device was not developed especially for this purpose but was inherited from the depression years when the Government began to push farm prices up toward the parity level.
The purpose of parity price legislation, first enacted in 1933, was to improve the economic position of the American farmer. Following the collapse of farm values in the 1920's, the objective of the Government and of farm-pressure organizations was to establish and maintain a balance between the price of farm produce and the price of goods and services which the farmer bought. By law, this "parity price" relationship is defined in terms of agricultural prices during a base period, 1910-14, and is tied to five so-called basic crops--corn, wheat, cotton, rice, and tobacco. Two things should be noted: First, price relationships which exited in 1910-14 have no necessary relation to the price structure needed in 1943 to bring out production for war. Second, the basic crops have strong political implications. to large sections of the country, prosperity means high prices for wheat, cotton, or tobacco. During a Democratic Administration, important committee chairmanships are held, under the seniority rule, by Congressmen from the cotton belt, a one-party and a one-crop area. The "farm bloc," comprising Democrats as well as Republicans, it particularly anxious that no action be taken by the Government which will affect adversely the income of farmer constituents. For this reason, actions affecting basic crops are conditioned by political factors of a bipartisan character.
Chart 45. Production Goals and Actual Production of Selected Agricultural Crops.
Programs to maintain parity prices are operated through the Commodity Credit Corporation. During the depression, Congress authorized CCC to loan money on crops or buy them in the open market when the prices fell below designated levels. Although the objective of the original legislation, passed in 1933, was "Parity," the Secretary of Agriculture was authorized to determine the rates at which loans would be made. In 1938, Congress stipulated a range of from 52 percent to 75 percent of parity for loan rates on corn, cotton, and wheat. Under the leadership of Senator Bankhead and other members of the farm bloc, acting with the full support of pressure organizations such as the American Farm Bureau Federation, Congress in May 1941 raised the minimum loan rates for basic commodities to 85 percent of parity. A year later, in the Stabilization Act, passed at the request of the President to provide for more effective control of farm prices by OPA, the loan rate was raised to 90 percent, with the proviso that 85 percent loans could be made if the higher figure would hamper livestock feeding. The effect of these congressional enactments was to guarantee successively higher prices for the so-called basic crops.
The same development took place with respect to "nonbasic" crops, the price of which the Department of Agriculture was also authorized to support. In JUly 1941, by a provision known as the Stegall amendment, Congress directed the Secretary of Agriculture, for the period of the emergency and when he found it necessary to encourage expansion of production of any nonbasic commodity, to support its price "through commodity loan, purchase, or other operation" at not less than 85 percent of parity or comparable price. This provision was amended by the Stabilization Act of 1942, which reiterated the limitation that price supports could by used only when necessary to encourage expanded production and raised the rate from 85 percent to 90 percent of parity.
At first glance it might appear that this legislation gave the Department all necessary authority to induce farmers to grow the things needed in a war economy. Actually, parity legislation was an obstacle to effective food management which was not overcome during the war. It meant that prices of basic crops were maintained regardless of demand and that the relation between the prices of basic and nonbasic commodities was not governed by relative need for the commodities. For example, high loan rates on wheat in areas in which a substitute crop could be grown had the effect of keeping land in wheat when other crops were needed more than wheat. To get around this difficulty, the Department had to establish unnecessarily high loan rates on the commodity for which increased production was desired. Similarly, price supports had to be
set far above the 90 percent of parity minimum stipulated in the Stabilization Act simply because the 90 percent price was not high enough to get farmers to shift from cotton and other crops, the price of which was also being maintained at 90 percent of parity by Government guarantee.
The Department was reluctant to use fully its authority under the Stegall amendment, except where greatly expanded production was urgently needed. It felt that short of a clear and urgent need, demand was so uncertain that it could not afford to commit the limited resources of the Commodity Credit Corporation to a price support program.
These limitations led the Department to propose an "incentive payment" plan to supplement the commodity loan and price support programs. The fate of the proposal can best be told in terms of cotton.
Opposition to incentive payments, arising in part from cotton ginners, seed crushers, and others interested in continued high levels of cotton production, was uncompromising. Congressmen pointed to the large surplus of corn and wheat, to the recent removal of production and marketing restrictions by the Department of Agriculture, and claimed that there was no reasonable basis for distinguishing between corn, wheat, and cotton. Cotton was said to be an essential war crop in view of the shortage of oil and protein food which cottonseed oil and meal would alleviate.19
Answers to these objections were reasonably clear cut. If the controls were removed, increased production of cotton would be confined to the Southwest and to the short fiber variety for which there was limited demand. Cotton is a relatively costly source of oil and meal. Average Georgia yields during 1937-41 showed that one acre each of cotton, soybeans, and peanuts would produce, respectively, 72, 168, and 215 pounds of oil. From the standpoint of the manpower required, each man-hour used to produce 1 pound of cottonseed oil would produce 3.7 pounds of soybean oil and 5.7 pounds of peanut oil. Also, as compared with peanuts and soybeans, relatively large amounts of land and manpower were required to produce cottonseed meal for animal feed.
Even though it could be demonstrated that cotton was a relatively inefficient source of oil and protein, some way had to be found of getting cotton farmers to plant other crops. On January 26, 1943, Secretary Wickard announced "an extensive war-production program of incentive payments totaling approximately $100,000,000, designed to obtain greater production of food and fiber crops vital to the war
effort." To finance this program, the Department requested an additional $100,000,000 for expenditure under the Soil Conservation and Domestic Allotment Act. The necessity for the program was outlined by the Director of the Food Production Administration:
One of the major problems today is getting farmers to grow new crops which are needed more urgently than increased production of their usual crops. Frankly it takes more than just a price incentive to get a farmer to shift from the production of a crop with which he is familiar to a new crop requiring different skills, and, from the point of view of the farmer, a risk which is not involved in the crops which he normally raises.20
Actually the program planned for 1943 represented a compromise between those who wanted to maintain existing production patterns and those who thought production should be shifted to meet the more pressing war needs. Subsidy payments to cotton and tobacco producers were planned in the amount of $84 million; only $78 million were projected for potatoes, fresh vegetables, soybeans, dried peas and beans, and sweetpotatoes.
The weight of the National Grange, American Farm Bureau Federation, and National Council of Farmer Cooperatives was thrown against the inventive-payment plan. The Master of the National Grange criticized the "subsidy" aspects of the plan and argued that prices should be permitted to rise to levels which would induce farmers to shift to war-essential crops. The president of the Farm Bureau presented resolutions of his organization urging the elimination of all "subsides used to . . . achieve maximum production" and the "continuation of commodity loans and price support at 90 percent of parity or at higher levels if necessary to get needed production." If adopted, these recommendations would continue the subsidies which had been built around prevailing production patterns and prevent the use of other subsidies as tools for altering such patterns.
Congress objected to the use of departmental funds for a program which it had not specifically approved, refused to appropriate funds for the inventive-payment plan and wrote into the 1944 Agriculture Department Appropriation Act a specific prohibition against incentive payments.21
Congressional inflexibility toward modification of the parity structure compelled the country to operate under a price system wherein the relations between the prices of various commodities were determined by patterns existing in 1910-14 rather than by current requirements. upward adjustment of the loan rates from 75 percent to 90 percent of parity and rejection of incentive payments meant high
prices for produce for which there was little need and even higher prices for products of significant wartime value. Moreover, market prices seldom indicated the essentiality of crops because prices were controlled for the purpose of holding down the cost of living, a policy which Congress had likewise approved. As a result, commodities which provided the most nutrients for the manpower, fertilizer, and land expended, such as fresh vegetables and dairy products, were the commodities for which stable prices were sought. As increased purchasing power pushed up the prices of luxury foodstuffs, such as watermelons, farmers and processors were encouraged to allot acreage and facilities to products which probably should not be grown in wartime. Fruits needed for canning and freezing were taken out of the markets at high prices for immediate consumption or for use in making ice cream. Conflicting legislative policy made it virtually impossible to use price effectively as an instrument of production management.
Production Management and Price StabilizationThe dilemma of how to increase farmers' income and stabilize the cost of living at the same time was the source of administrative difficulty between the Department of Agriculture and the Office of price Administration. After passage of the Emergency Priced Control Act of 1942, which required the Secretary of Agriculture's prior approval to price controls over agricultural commodities, a price committee was set up within the Department of Agriculture to serve as liaison with the Office of Price Administration on agricultural pricing problems. As a matter of practice, however, disagreements on important policy questions were handled between the offices of the Secretary of Agriculture and the Price Administrator, and technical problems were discussed directly by the staffs of the agencies. Action was facilitated by appointment of Mr. Howard Tolley, Chief of the Bureau of Agricultural Economics, as director of the OPA Food Price Division. He served in a dual capacity for several months before returning to the Department of Agriculture in 1942. By late 1942 the original Agriculture price committee had become inactive.
Since there was a fundamental difference in attitudes about prices, disagreements between the two agencies continued. As in peacetime, the Department of Agriculture tended to rely on price increases to adjust production, direct distribution, and facilitate procurement. But rising levels of agricultural prices and of living costs made the Office of Price Administration more and more reluctant to grant price increases.
After issuance of the December 1942 food order, another attempt was made to expedite the handling of disagreements between the two agencies. A "memorandum of understanding" was signed on December 11, 1942, under which the Office of Price Administration agreed to consult the Department on all pending price regulations affecting processed as well as agricultural commodities; and the Department agreed to consult OPA on actions relating to marketing agreements, regulations, and support price programs. Deadlocked issues were to be referred to the Office of Economic Stabilization for decision.
Difficulties under this interagency agreement arose from the fact that the internal organization of the Department of Agriculture and the Office of Price Administration made it difficult to bring differences to the point of decision. Within the department the individuals experienced on price problems were dispersed through several sets of commodity branches in the Food Production Administration, the Food Distribution Administration, the Commodity Credit Corporation, and the Bureau of Agricultural Economics. During the early part of 1943, no administrative device had been worked out for pulling the price specialists together and developing a departmental policy on commodity pricing. Within the Office of Price Administration, knowledge and points of view about food price problems were dispersed among business specialists, lawyers, and economists. As in the Department of Agriculture, it was difficult to obtain decisions on price questions.
The Office of Economic Stabilization was not equipped to take an active role in the formulation of food programs. The diffusion of responsibility within the Department of Agriculture and the Office of Price Administration generally meant that questions of price policy were the subject of prolonged negotiation between various levels of the two organizations. On occasion, differences were discussed with the Office of economic Stabilization at some intermediate stage of negotiations, but OES preferred to take jurisdiction only after agency disagreements had become sharply defined and were susceptible of arbitration. This method of operation conformed to the President's characterization of the job of Director of Economic Stabilization as one calling "primarily for judicial consideration." It also fitted naturally into the training and attitudes of the judges and lawyers who comprised the staff of the office through 1944. Under this concept, OES did not take a notably active part in reconciling the fundamental conflict between the stabilization program and the pricing system administered by the Department of Agriculture. Generally it did not anticipate issues before they arose or attempted to obtain agreement before issues developed into actual controversies.
Material, Supplies, and EquipmentThe Food Order of December 5 attempted to split between WPB and Agriculture control over material needed for food production. Section 8 authorized the Secretary of Agriculture to exercise with respect to food and "any other material or facility" the priority and allocation powers delegated to the President by the Second War Power Act, when such exercise was determined by the Secretary to be necessary to carry out the provisions of the Executive order. If the WPB Chairman disagreed with a proposed priority action, the disagreement was to be referred to the President or his agent for resolution. A somewhat different relation was delineated by section 2, which authorized the Secretary of Agriculture to "recommend to the Chairman of the War Production Board the amounts and types of nonfood materials, supplies, and equipment necessary for carrying out the food program." The Chairman of WPB was directed to consider these recommendations in allocating specific amounts of nonfood materials, supplies, and equipment to food programs and to use WPB powers to bring about their use in accordance with the Secretary's determinations.
Exercise of these powers by the Secretary would have disrupted the organization which had been created to direct mobilization of the nation's industrial resources. Some of the implications were described by staff of WPB as follows: under section 8 the Secretary of Agriculture "might allocate any material or facility--whether steel, copper, aluminum, rubber, machine tools, or machinery--whenever he considers it necessary for the effectuation of the food program"; he might "undertake to allocate steel and rubber to the manufacture of an increased supply of agricultural machinery irrespective of the needs of the airplane, tank, and ship programs, the Russian protocol, the repair and maintenance of railways, etc."; he "might allocate to the manufacture of agricultural-equipment facilities which are now engaged or are scheduled to be used, in the manufacture of tanks or half-track vehicles"; and he might "allocate certain chemicals, or chemical manufacturing facilities, to the manufacture of certain types of fertilizer, irrespective of the competing needs of the ammunition and chemical-warfare-production programs."
The absurdity and danger of duplicate priority systems was recognized by the Secretary fo Agriculture, who agreed to accept WPB controls over supplies needed for food production. Under an agreement between Agriculture and the War Production Board, the Secretary submitted to WPB detailed quarterly estimates of nonfood materials, supplies, and equipment. These estimates, like those of the War and Navy Departments and other claimant agencies, were
reviewed by the divisional requirements committees and the staff of the program vice chairman. Requirements of Agriculture were then considered by the Program Adjustment Committee and WPB Requirements Committee and allocations of materials were made by the WPB Program Vice Chairman for production of agricultural equipment and related products at the same time that allocations were made for other production programs. Proposals for new facilities--food processing plants, irrigation projects, and the like--were reviewed by the WPB Facilities Bureau and the Facilities Committee as were proposals for new steel mills, railway improvements, and other industrial plants. In general, therefore, industrial and construction requirements for the food program were reviewed and scheduled by the War Production Board in much the same manner as requirements for the other nonmilitary sectors of the economy. This arrangement, essential to effective central allocation of the Nation's industrial resources, was maintained in spite of the Executive order of December 5 granting allocation and priority powers to the Secretary of Agriculture.
The Department of Agriculture was restive under this control and the question of whether proper amounts of farm equipment were being produced often became a subject for public and congressional discussion.22 On occasion, the arrangement seemed to delay unduly the execution of food programs. The process, however, was a necessary part of a central control over the allocation of industrial materials and facilities; and adjustment of competing requirements for these items became more essential and more time-consuming as supplies diminished. Meanwhile, operating relations between WPB and Agriculture were improved by establishment within Agriculture of an Office of Materials and Facilities which consolidated the food agency's requirements for materials, supplies, and equipment and presented to WPB unified estimates of material needed for food programs. Relations between the two agencies also improved as Agriculture personnel became more familiar with WPB policies and procedures.
Importation of FoodControl of food imports provided another example of the limited extent to which responsibility for food supply could be centered in a single agency. Beginning in the summer of 1941, the Office of Production Management (predecessor to the War Production Board)
developed priority schedules which rated imported materials according to their importance in the war-production program. The lists were prepared in consultation with representatives of other agencies also interested in imports and were used by the Maritime Commission as a guide in loading vessels for trips to the United States. The order establishing the War Shipping Administration formalized WPB's function of transmitting import priority schedules to WSA. In October 1942, the Stockpile and Transportation Division was established within WPB to continue the preparation of import schedules, which guided the WSA in assigning vessels to bring such materials to this country.
The Food Order of December 5, authorized the Secretary of Agriculture to determine priorities relating to imports of food for "human and animal consumption." Directives for the "importation of food for industrial uses" were to be issued jointly by the Chairman of WPB and the Secretary of Agriculture. "Importation of materials, supplies, and equipment required for the war production program and the civilian economy" would remain under the authority of the War Production Board.23
The effect of these provisions was to make the Secretary of Agriculture more or less coordinate with the Chairman of WPB in determining what should be imported on available ships. As in the case of allocation of nonfood materials and facilities, the result would have been the establishment of duplicate priority controls; and two agencies would have had authority to control the same shipping space. Since only a few food commodities have no industrial use, the order would have required joint action by WPB and Agriculture for the bulk of food imports. Disagreement between the agencies on these import schedules would have been thrown to the War Shipping Administration for decision; and WSA had no responsibility for industrial production or food supply and could have had little information on which to base its decisions.
Again it was necessary to modify the Executive order by informal arrangement between the Department of Agriculture and the War Production Board. By May 1943, preliminary determinations of quotas and ratings for imported food commodities were being made by the food agency with WPB participation through representation on Agriculture's Committee on Foreign Purchase and Importation. Preliminary schedules for particular commodities were reviewed by the appropriate subcommittee of the interdepartmental Shipping Priorities Advisory Committee. Recommendations of the subcommittees, headed by representatives of Agriculture, were reviewed by the full committee, the chairman of which was the Director of the
WPB Division of Stockpiling and Transportation. Determinations of the interdepartmental committee which were unsatisfactory to Agriculture were settled by negotiations between WPB and Agriculture or, if necessary, by appeal to the Office of Economic Stabilization. These arrangements left with WPB general responsibility for issuing directives to the War Shipping Administration.
Farm LaborAllocation of the Nation's manpower among competing uses such as war plants, the armed services, food production, and other essential civilian uses, is discussed in chapters 7 and 14. At this point it is desirable simply to mention some of the more important developments affecting farm labor. As early as 1940, while many experts were still unconcerned about the necessity for increasing food production, farm labor was being drawn off the farms by higher paying jobs in war industries and by the military services. Later, chiefly as a result of pressures generated by public concern over possible food shortages, special measures were taken to maintain essential workers on the farm. A provision of the Stabilization Act of 1942 was intended to help the farmer compete for labor by requiring that OPA price ceilings be adjusted to take into account production cost increases resulting from higher wage rates.24 Congress also required local draft boards to defer "any worker necessary to and regularly engaged" in agricultural occupation essential to the war effort, and by September 1943, more than 2 million had been deferred from military service.
By directive of the War Manpower Commission, the Secretary of Agriculture acquired full operating responsibility for agricultural labor programs. Under this authority the Department imported laborers from Mexico, the Bahama Islands, Barbados, Newfoundland, and Jamaica, brought about a fuller utilization of migrant farm workers, directed the use of prisoners of war in food production, and in other ways supplemented the pool of farm workers. In spite of all of these actions, the labor supply continued to shrink. Nevertheless, farmers achieved new records of food production, made possible by unusually favorable weather conditions and by more skillful operation of farms.
The December Food Order directed the Secretary of Agriculture to "take all appropriate steps to insure the efficient and proper distribution of the available supply of food." The priorities and allocation powers of the Second War Powers Act were delegated to the Secretary insofar as food for human or animal consumption was concerned.
Control of Distribution
Under these powers the Secretary was responsible for determining "the need and the amount of food available for civilian rationing." The order provided, however, that rationing programs would be carried out through the Office of Price Administration with respect to "the sale, transfer, or other disposition of food by any person to an ultimate consumer" or by "any person who sells at retail." The Secretary was expected to consult with the Price Administrator "before determining the time, extent, and other conditions of civilian rationing."
RationingDistribution of the food rationing job between Agriculture and OPA involved, as did the problem of allocating nonfood materials and facilities, a fundamental question about the civilian organization for war. The Office of Price Administration in January 1942 had established local rationing boards throughout the country and had been designated by WPB as the consumer rationing organization of the Government.25 Acting under directives form the War Production Board, OPA was rationing tires, automobiles, typewriters, and gasoline and was planning meat and processed foods rationing programs. Establishment of the Petroleum Administration for War and designation fo the Department of Agriculture as the principal food agency required reexamination of the relation between these commodity "czars" and OPA, the rationing agency.
Staff of the Department of Agriculture interpreted the Executive order to mean that the Secretary had been given complete responsibility for food distribution as well as for food production. It was argued that in most instances the Department would need to retain control over distribution down to the retail level. "The Department must be assured that the allocation of foods for civilians' use at the processor and wholesale level will not interfere with the over-all allocation of foods for other purposes." Such assurance might be had if the Department issued orders dividing up the food supply at each level of the distribution system down to the wholesalers. If this were done, the shares assigned for military lend-lease and foreign governments would be protected form diversion into civilian markets. Accordingly, Agriculture took narrow view of the consumer rationing functions of the office of Price Administration; its job would be chiefly to develop and distribute ration books and forms; register consumers and retailers, and provide them with instructions and information; operate the ration coupon banking system; prevent used rationing coupons form getting back into circulation; handle individual
adjustments within general policies laid down by Agriculture; and enforce rationing regulations.
The Office of Price Administration took the position that it would have to be given all the authority necessary to insure that meat supplies would be available to meet coupon demand. "The OPA is the only agency that actually deals with the public"; "it must bear the brunt of criticism." An allocation control system, administered by Agriculture, which would allow distributors a certain percentage of the supply which they handled in a designated base period might not move food into areas crowded with migrant war workers. The number of ration coupons cashed in a given area provided a more precise guide to food demand. The OPA argued, therefore, that meat should be distributed, form the primary distributor down to the retailer, only in exchange for ration coupons or certificates. Under such a system the OPA said it would have to have jurisdiction over all levels of distribution beginning with deliveries by primary distributors; handle all relations with industry groups subject to rationing regulations; make decisions on methods of rationing, procedures to be followed, adjustments of point values, and other administrative questions; and to release all public information about rationing actions and programs.
For several weeks following approval of the December order, representatives of the Department of Agriculture, the Office of Price Administration, and the Bureau of the Budget worked to establish a satisfactory agreement on the rationing function. Both Agriculture and OPA were adamant in their views. On January 10, 1943, the Secretary of Agriculture expressed to Director Byrnes of the Office of Economic Stabilization grave concern "over the almost certain development of food shortages in many areas of the country within the next few months." He stated that Agriculture "had urged the rationing of fats and oils as early as March 1942," and the rationing of meat in August 1942. The letter continued:
General authority with respect to rationing was recently vested in me by the President's Food Order. However, the order directs me to exercise this authority with respect to rationing through the Office of Price Administration . . . In our efforts during the past few weeks to formulate a working relationship with the Office of Price Administration under the Food Order, representatives of the Office of Price Administration have taken the view that the office must have full control over domestic food distribution from processor to consumer . . . I feel that it is necessary that steps are taken to make it clear that I have complete authority to carry out the civilian food programs, including all phases of consumer rationing. Because of the precarious civilian food situation, I ask your assistance in seeing that this matter is clarified at the earliest possible moment.
Accompanying the letter to Justice Byrnes was a draft Executive order transferring to Agriculture the personnel, property, records, and
funds of the Office of Price Administration primarily concerned with and available for civilian rationing of food. The Secretary proposed to utilize "local rationing boards and other facilities and personnel concerned with the actual carrying out of rationing programs" which would remain in the Office of Price Administration.
This proposal, under which Agriculture would develop rationing programs in detail and operate them through the field organization of OPA, was administratively impracticable. In the field, OPA would have had ot make day-to-day adjustments required to fit policies to local needs: adaptation of rationing policy to operating experience would have become a matter for interagency negotiation. If adopted for food, pressures would have developed to extend the pattern to oil and gasoline and perhaps to rubber and other rationed commodities. Thus, the Office of Price Administration would have had to administer programs devised by several different agencies--the Department of Agriculture. Petroleum Administration for War, and the Office of Rubber Director. Adjustment of these agencies' requirements would have meant extended discussion and compromise over issues of administrative detail which, in many cases, the Office of Ecnomnic Stabilization would have had to settle. OES was not equipped to take over an operating job of such magnitude. For these reasons, efforts to device a different solution continued.
Finally, on February 12, 1943, an agreement defining the functions of the two agencies was signed by Secretary Wickard and Price Administrator Brown. Under this agreement the Department of Agriculture was recognized as having exclusive "responsibility for determining supplies of foods available for civilian consumption and for allocating supplies accordingly," and for determining the need for and time and extent of civilian rationing. The Office of Price Administration was given primary responsibility for developing the rationing programs, and for determining rationing techniques and procedures. on the major point in dispute, the agreement provided that the "Department shall have complete responsibility for the determination of over-all allocations for civilian use and for determining individual processor quotas. The OPA shall have responsibility for directing the flow of rationed commodities within such quotas and allocations from the time the commodity is placed in a form ready for distribution by the processor."
The agreement also provided for the establishment of a "Food Rationing Policy Committee" consisting of representatives of the Food Distribution and Food Production Administrations of the department and the Rationing Department of the Office of Price Administration. This Committee was set up to consider problems of concern to both agencies requiring joint consideration of policy; it was not
given any authority to discuss matters which the agreement clearly delegated to either of the agencies. Specific matters mentioned for the Committee's attention were the handling of publicity, industry relations, and the desirability and feasibility of providing additional rations for workers in heavy industries such as coal mining and lumbering. In practice, the Committee did not become an active agent of interagency collaboration, partly because the interagency agreement provided a satisfactory basis for day-to-day operations.
These negotiations, which occupied top officials of the agencies for almost 3 months, did not delay work on pending rationing programs. While the relative responsibilities of Agriculture and OPA were being discussed, the agencies were attempting to devise some method of eliminating local meat shortages. The amount of livestock that large commercial slaughterers could process had been limited by a "restriction order," issued in October 1942 by OPA for the purpose of reinforcing price controls. The meat which passed through these plants was graded for quality by Department of Agriculture personnel and the plants were inspected for compliance with Federal sanitation regulations. Federally-inspected slaughterers processed most of the country's meat supply as well as all of the meat acceptable under Army and Navy procurement specifications and for shipment across State lines. Similar quota restrictions were not imposed on slaughtering by thousands of local and farm slaughterers who normally account for a very small percentage of the country's meat supply.
In April 1943 the food agency took over administration of the restriction order. Suits against nonquota slaughterers which OPA had begun were dropped. County war boards were authorized to issue permits to farm butchers and local slaughterers who had not been required to register under the original order. This system of permits, it was thought,k would limit the business done by small slaughterers, increase the flow of meat to federally inspected plants, facilitate purchases of meat by the military, and relieve meat shortages in deficit areas. Agriculture personnel, however, tended to issue permits without suitable investigation, with the result that enforcement of price and rationing controls over numerous and widely dispersed small slaughterers was impossible.
The perfunctory nature of these controls had two consequences of significance to the Government's meat programs for the balance of the war. (1) Small slaughterers increased in numbers and expanded their businesses tremendously. They found it relatively easy to evade price and rationing regulations; and, by paying higher than ceiling prices, they were able to buy the better grades of livestock which formerly went to the large packers. Illegal prices paid for livestock and passed on to wholesalers and retailers, frequently without the use
of ration currency, stimulated black-market operations. 92) An insufficient supply of meat passed through federally inspected plants. Since the Army and Navy bought only from such plants, they had difficulty in buying the meat which they needed. Also, severe shortages appeared in heavily populated cities that normally imported federally inspected meat form out-of-State producing areas. The institution of consumer rationing in March 1943 was expected to relieve some of the pressure on price and rationing regulations by making the availability of ration coupons a major factor in distribution. But absence of effective control over small slaughterers soon made it virtually impossible for available personnel to enforce OPA controls over the thousands of distributors whose meat supply came from local slaughterers. Thus, the problem of meat supply and distribution which aroused so much concern in 1944 and 1945 were due in large part to the failure to solve the slaughter control problem in 1943.
ProcurementEarly in 1943 attention was also directed to the Government's food procurement activities which were being consolidated in the Army and the Department of Agriculture. The Army bought perishable foods through 34 local market centers and nonperishables through three large quartermaster depots. The Navy had begun to turn to Army market centers for perishable commodities, but nonperishables were bought through its own organization. Army supply officers in small camps and stations were also authorized to buy locally without going through a market center. Food for merchant ships under the War Shipping Administration's jurisdiction was bought by the companies operating the ships.
Under the December food order, the Secretary of Agriculture was to correlate procurement by Federal agencies so that there would be a minimum of disturbance to local supplies. In January, the Food Distribution Administration established an Inter-Agency Food Procurement Committee with representatives from the principal agencies interested in or affected by Federal procurement operations. The Committee operated through a series of subcommittees appointed to study particular commodity problems and to recommend action to be taken by the procurement agencies. It was the view of those responsible for procurement operations that establishment of the inter-agency committee would provide all necessary coordination. In the months which followed, the procurement problem became more and more one of locating supplies to meet the needs of the military services and foreign governments. The Committee was not in a position to
deal with these general shortage problems which had their source in more fundamental aspects of food policy. Nevertheless, it was drawn into consideration of matters such as requirements and production, and tended to dissipate its energies and influence in areas in which it had no jurisdiction. The problem of coordinating Federal food procurement was not much further advanced toward solution.
Responsibility for purchases by the Department of Agriculture was given to the Food Distribution Administration and was carried out by the staff of the Agricultural Marketing Administration transferred to FDA by the December 5 food order. The Agricultural Marketing Administration and its predecessor agencies were originally set up to handle the various marketing and distribution acitivties of the Department. An objective of these activities was the improvement of the farmers' economic position by disposal of agricultural surpluses. Less than 6 months before the Germans attacked Poland, the Department launched an experimental food stamp plan for surplus farm produce disposal through the regular channels of trade. The immediate effect of the war was to cut off export markets and to add to existing surpluses which were further enlarged by the huge crops in 1940-42. Thus, the major problem confronting the Department and its marketing-distribution agencies during this period was the disposition of excess supplies. An organization which so recently had been preoccupied with surplus commodities would require careful direction if its operations were to be fitted into the management of tight supply.
The allocations of foodstuffs which came out of the Department's requirements-allocation procedure were not followed rigorously by either the Food Distribution Administration or the Army. On the foreign side, the difficulty of obtaining definite statements or requirements made it virtually impossible to plan procurement. Foreign missions submitted their estimates to the Food Distribution Administration through the Program Liaison Branch which was itself in the stream of procurement operations. Under this arrangement the procurement staff was informed at all times of requests made by foreign governments and was in a position to place contracts in anticipation of final allocations. This practice of "forward buying" made it possible for the Food Distribution Administration to have foodstuffs on hand to meet the rapidly changing shipping situation. It could also divert to the Army and Navy supplies earmarked for foreign shipment. The obstacles which had arisen in the requirements-allocation function did not have serious consequences while total supplies were adequate and the procurement agencies engaged in forward buying. This manner of operation, however, required frequent changes in the amounts allocated to claimants and created
additional problems in distributing scarce food supplies in accordance with an over-all allocation plan.
Although the structure of the food organization was determined by the actions taken from December 1942 to March 1943, one important change occurred. An Executive order of March 26, 1943, removed from the Secretary of Agriculture the direction of the war food program.26 This order established within the Department of Agriculture an Administration of Food Production and Distribution (later renamed the War Food Administration),27 under the direction of an administrator appointed by, and directly responsible to, the president. All of the powers delegated to the Secretary by the food order of December 5, were transferred to the Administrator. Although this arrangement violated organizational theory, the Food Administrator and the Secretary of Agriculture worked together without friction largely because of the personalities involved. WFA remained a nominal part of the Department until its abolition in June 1945.
The general pattern of administration already described persisted until near the end of the war when the specter of stock piles again rose. During the years 1944-45, actions of the War Food Administration alternately reflected fear of excessive food surpluses and concern over food shortages. Food production in 1944 established new records and generally was 38 percent above the average to 1935-39. In the spring of 1944, it was generally believed that the war in Europe would be over by the end of the year. On this assumption the military substantially curtailed food procurement. Reduction of military purchases accompanied record marketing of hogs, and created a glut in the stockyards and processing plants. To ease this situation, zero point values were set in May for all veal, lamb, and pork cuts, all beef cuts, except steaks and roasts, and all canned meats and fish.
With this relaxation of meat rationing, civilians in 1944 ate 2.5 billion pounds more than had been fixed in the original civilian requirements estimates. Per capita meat consumption in 1944 was approximately 150 pounds, as compared with the prewar average of 126 pounds. After removal of point values in May, consumption rose to an annual rate of 160 pounds, and it was estimated that there was purchasing power to support annual consumption of 170 pounds. The rise in consumption meant that meat which should have been canned or stored for a "lean" period was eaten during the spring and summer. During May, June, and July of 1944, for example, pork canning under Federal inspection fell to 56 percent of the amount canned in the same months of 1943. By August the surplus had
been reduced sufficiently to require restoration of point values on most cuts of meat.
In August, however, it appeared that victory in Europe was perhaps only a few weeks away. A sudden ending of the war would find the food "pipe lines" full and supported by embarrassingly large stock piles. The policy of "liquid inventories," also called the bare-shelf policy, was applied to eliminate surpluses which, if released by the Army, might flood the market and depress postwar prices. Almost all processed foods were removed from rationing in September 1944.
By eating too much in 1944, we created a "food crisis" in 1945. By the spring of 1945 a severe meat shortage had appeared and congressional committees were appointed to ascertain its cause and to devise corrective action. The findings and recommendations of the Anderson Committee pointed to administrative and policy failures as factors in the meat shortage.28
The Committee found substantial evidence of widespread violation of meat price and rationing regulations, or black-market operations. For example, nationally operating packers could not buy livestock at market prices and sell beef at OPA ceilings without taking a loss. These packers had been forced to reduce their volume of business. Meanwhile small, nonfederally inspected packers were able to increase their business for the period ending February 28, 1945, "in some cases six to eight, and in one case, to ten times" the amount done in the previous year. The expanded business of these small slaughterers was a prolific source of price and rationing violations.
This situation was brought about by WFA's failure to establish control over the entrance of new slaughterers into business and over the volume of business done by existing slaughterers. "From September 1, 1943, to January 24, 1945, an applicant for a license need only show that he had adequate facilities and met sanitary requirements." By May 1944 "all regulations had been removed form farmers, who could then slaughter anything without any permit. They were free from restrictions on slaughter for sale." By January 24, 1945, when the War Food Administration again made an effort to get some control over slaughtering by issuing licenses only when the applicant could show that the issuance would advance the war effort, so many slaughterers were already in business that existing conditions were not improved. OPA simply could not enforce price ceilings or rationing regulations in the absence of a control at the slaughterer level which would channel meat to legitimate distributors.29
In February 1945 an effort was made to restrict the volume of business of nonfederally inspected slaughterers by withholding subsidies when the volume of business exceeded a specified maximum. The Anderson Committee pointed out that the subsidy which was lost for exceeding the maximum was only a small fraction of the profits that could be made in black-market operations. The black market was not notably reduced by this device.
The Committee recommended a review of all slaughtering permits, and War Food Administration at once transferred to OPA the job of administering slaughtering controls. We were then back to the situation which exited in April 1943, when Agriculture took over administration of OPA's Meat restriction Order No. 1. In appraising this part of the food machinery, the Committee stated:
Without doubt the permit system as it was operated was a prolific source of black-market meat and drained off good beef which would otherwise have found its way into legitimate trade channels and to the counters of those retail stores that have tried to observe legal price ceilings.30
On the subject of price ceilings, the Committee emphasized its belief that "the greatest mistake made in the control of meat prices was to begin by pricing at the retail level and then working backward."31 As earl;y as August 1942 Price Administrator Henderson had requested Secretary Wickard's approval of livestock ceilings and subsequently the proposal was discussed periodically between OPA and the food agency. In these negotiations the food agency consistently opposed ceilings on live cattle and hogs. In part, this opposition grew out of a reluctance to have any maximum prices which would be enforceable against farmers. The Office of Price Administration wanted livestock ceilings because it believed that they would relive pressure on processor and distributor ceilings and thereby simplify the OPA enforcement job. Agriculture took the position that livestock ceilings were impracticable and unenforceable and that by undermining the farmers' confidence in food-production programs, they would tend to reduce production. This view was also held by the American National Livestock Association, the National Grange, and other livestock producing and marketing groups. The lack of control at the producer level caused the Office of Price Administration to hold onto ceilings which undoubtedly did discourage production or processing. With so little control, it seemed necessary to retain the regulations which were in effect.
The Anderson Committee reported that "one of the fundamental mistakes made in the war-food program was in the failure to expand cold-storage space in keeping with the increases in production which
farmers were asked to make." Lack of storage space affected production as well as distribution. Having announced a support-price program to encourage increased production, the War Food Administration frequently found that facilities were not available to store the commodities it would have to buy in order to maintain market prices at the support level. Departmental officials then began to think in terms of curtailing production to proportions which could be handled in available storage space. When prices fell below support levels guaranteed by the Department, farmers also lost confidence in Departmental programs and tended to reduce production below levels set by the Department. For example, in 1944 the Department asked farmers to produce 20 percent fewer hogs than they had in 1943, but farmers actually reduced their pig crop by 30 percent.32
The agriculture subcommittee of the House Appropriations Committee, under the chairmanship of Congressman Tarver, made a special study of the warehousing and storage operations of the War Food Administration. The committee reported that "many errors of judgment and administration" necessarily occurred in carrying out a vast emergency program for which "administrative machinery had to be assembled hurriedly." Not all of these mistakes were unavoidable, however, and matters such as the failure to develop a properly managed inspection service to determine whether warehouses were suitable for food storage, unnecessary transfers of food between warehouses, inadequate inventory and financial records, and poor coordination and supervision of component parts of WFA were cited as examples of faulty administration which should have been corrected.33
During the 1945 "food crisis," pressure also developed to curtail food shipments to foreign countries. On March 12, 1945, Director of War Mobilization and reconversion Byrnes appointed an Interagency Committee on Foreign Shipments to reexamine our foreign commitments in light of existing food supplies. The Committee, under CHairman Leo Crowley of FEA, consisted of representatives of Army, Navy, Foreign Economic Administration, War Food Administration, War Production Board, War Shipping Administration, and the Department of State. In its first report, the Committee stated that "stocks were not built up to the maximum possible extent last year (1944) to meet this emergency, in part due to insufficient storage facilities. Instead, we consumed our food at a record rate, 9 percent over prewar years." The report went on to say that military needs would be greater in 1945 than in 1944, and that millions of people in Europe, recently liberated by Allied armies, were living on starvation
diets, in some areas on "no more than one-fourth the daily minimum requirements." Because of world food shortages, the "most that can be accomplished is to provide such foods as will tide the people of Europe over their immediate difficulties."34
On the subject of our own civilian requirements, the Committee stated that "the American people would, were it available, consume greater quantities of food in 1945 than were consumed in 1944." We could afford to reduce our consumption without risk of malnutrition. But because of the increased demand for food, "the maintenance of an effective rationing system is an essential condition for the distribution of adequate food supplies to all Americans in the period ahead."35
After the German surrender in May and the Japanese surrender in August 1945, the Government moved swiftly to relax rationing controls. Within a few months only sugar remained on the ration list. Thus, unexpected military developments and the speedy removal of wartime controls forestalled for the American people the consequences of inadequate food organization, policies, and operations. We emerged form the "war for survival" the best fed of all the major Allied nations.
Six months after VJ-day, however, there was another "food crisis," this time involving actual starvation of millions of people in Europe and Asia.
Table of Contents ** Previous Chapter (10) * Next Chapter (12)
1. U.S. Navy. Supplies and Accounts Memorandum No. 416, May 1937, "Items and Quantities to be Carried by Ships," reprinted and in use, 1942.
2. Office of Lend-Lease Administration. Seventh Report to Congress on Lend-Lease Operations, for the period ended Dec. 11, 1942, p. 6.
3. Executive Order No. 9280, Dec. 5, 1942, 7 Federal Register 10179.
4. Office of Emergency Management. Handbook 1942, pp. 66-67. Letter from President Roosevelt to Secretary Wickard, May 1941, establishing the Office for Agricultural War Relations.
5. Executive Order No. 8734, Apr. 11, 1941, 6 Federal Register 1917.
6. Office of Price Administration and Civilian Supply, Minutes of Price Administration Committee, June 11, 1941.
7. Leon Henderson to Representative Cannon, Apr. 30, 1941. OEM Press Release PM345, May 1, 1941.
8. WPB Press Release 1295, June 5, 1942.
9. WPB. Minutes of Food Requirements Committee, July 31, 1942.
10. Executive Order No. 9250, Oct. 3, 1942, 7 Federal Register 7871. The relevant language follows: "Subject to the directives on policy of the Director, the price of agricultural commodities shall be established or maintained or adjusted jointly by the Secretary of Agriculture and the Price Administrator; and any disagreement between them shall be resolved by the Director."
11. Secretary Wickard also suggested the transfer of the Food Requirements Committee from the War Production Board and its reestablishment by Executive order in the Office of Economic Stabilization.
12. Department of Agriculture, Office of the Secretary, Memorandum No. 1068, Jan. 26, 1943.
14. State Department, Departmental Order No. 1114, Dec. 4, 1942.
15. Executive Order No. 9280, Dec. 5, 1942, 7 Federal Register 10179. The WPB personnel concerned primarily with food production matters as determined by the Director of the Bureau of the Budget, Jan. 8, 1943, and by Memorandum No. 1054, Supplement No. 1, Jan. 16, 1943, were transferred to Food Production Administration and those concerned with distribution were transferred to Food Distribution Administration.
16. Department of Agriculture, Office of the Secretary, Memorandum No. 1954, Dec. 10, 1942.
17. U.S. Congress. House, Committee on Appropriations, Agriculture Department Appropriation Bill for 1944. Hearings . . . 78th Cong., 1st sess.; and U.S. Congress. House. Select Committee to Investigate Activities of the Farm Security Administration . . . pursuant to H. Res. 119. Hearings . . . 78th Cong., 1st sess.
18. Department of Agriculture. Food Production Memorandum No. 2, Jan. 22, 1943.
19. U.S. Congress, house. Committee on Appropriations. Agriculture Department Appropriation Bill for 1944. Hearings . . . 78th Cong., 1st sess., p. 784.
20. Ibid., p. 688.
21. 57 Stat. 392: "No part of said appropriation or any other appropriation in this Act shall be used for incentive or production adjustment payments" except for soil conservation and water conservation payments.
22. U.S. Congress. Senate. Committee on Agriculture and Forestry. Hearings before a subcommittee on the Food Supply of the United States. 78th Cong., 1st sess.; also Senate Report No. 10, 78th Cong., 1st sess.
23. Executive Order No. 9280, sec. 5, Dec. 5, 1942, 7 Federal Register 10179.
24. 56 Stat. 765.
25. WPB Directive No. 1, Jan. 24, 1942, 7 Federal Register 562.
26. Executive Order No. 9322, Mar. 26, 1943, 8 Federal Register 3807.
27. Executive Order No. 9334, Apr. 19, 1943, 8 Federal Register 5423.
28. House Report No. 504, 79th Cong., 1st sess. Representative Clinton Anderson was named chairman of the Special Committee to Investigate Food Shortages for the House of Representatives, 1945. The report of this committee was favorably received, and when Secretary Wickard resigned, President Truman appointed Mr. Anderson to the post of Secretary of Agriculture.
29. House Report No. 504, 79th Cong., 1st sess., pp. 13-14.
30. Ibid., p. 14.
31. Ibid., p. 15.
32. Ibid., p. 14.
33. House Report No. 816, 79th Cong., 1st sess.
34. U.S. Interagency Committee on Foreign Shipments. First Food Report to the Director of the Office of War Mobilization and Reconversion, Apr. 30, 1945.