Evening star., 1943-08-09
Industry Under OPA

The decision of the Emergency
Court of Appeals in the meat packers
case sheds an interesting light on
some of the things that are happen
ing to American business under the
curious philosophy which seems to
dominate the thinking of the Office
of Price Administration.
In it's scope, the decision is limited,
merely setting aside the refusal of
OPA to permit Armour 81 Company
to charge higher price for beef sold
to the Government, and directing
the price control agency to re-
examine its original ruling against
the background of the facts devel-
oped by the court. But since the
ruling by OPA in the Armour case is
applicable to the entire industry, its
history merits review.
The order limiting the maximum
price of beef to the level of March,
1912, became effective in July of last
year. Because of the administrative
and possibly political-difficultie
involved, no ceiling was placed on
the price that producers could charge
for livestock. AS result, Armour
(and all other packers found them
selves squeezed between the rising
cost of livestock and the prices they
were permitted to charge for dressed
beef. Armour claimed, and OPA
admitted, that under the ceiling
which had been fixed it actually was
compelled to pay more for livestock
than it was permitted to charge for
dressed beef, thereby forcing the
concern to operate at a loss in it's
sales to the Government. In a brief
period of time this loss amounted to
$250,0O0.
For some reason, which does not
appear on the face OF the opinion,
Armour did not attack the validity
of the price regulation itself, but
sought relief on its sales to the Army
under an amendment permitting
price adjustments in the case of
contracts with the Government when
the price permitted to be charged
was so low as to threaten contin-
uance Of the Army's beef supply.
This request for relief was denied
last September, OPA promising that
appropriate methods" for solving
the problems created by the rise in
cattle prices were under considera-
ton and would be put into effect as
quickly as the Government agencies
concerned could work out the ad-
ministrative details. Although a
year has passed, that relief is not yet
forthcoming.
What is Interesting now, however,
is the reasoning back of the refusal
of oPA to grant any price relief last
year. To considerable extent this
necessarily is matter for conjecture,
but a reasonable assumption would
run about as follows: The amend
ment to permit price adjustments in
certain circumstances was issued to
insure continued supply of beef for
the Army. But the Government,
acting for the Army, has wartime
authority to go into the Armour
plant and commander at ceiling
prices such beef as it needs for the
armed forces. Hence, Armour and
the other packers had to furnish the
beef desired by the Government,
even at heavy loss to themselves, and
therefore it was not necessary for
OPA to grant price relief to maintain
the Army's source Of supply.
Apparently OPA took the view that
Armour could offset the loss on it's
sales to the Army through its larger
sales in civilian channels. but, if this
is the case, it would seem to follow
that civilians are being compelled to
pay too much for their beef so that
the Government may buy at less
than the actual cost to the professor.
If that be the case, however, it is an
unhealthy state Of affairs-for the
meat industry, for the Government
and for the public.