Evening star. [volume] (Washington, D.C.) 1854-1972, 1945-03-28
Prices and Black Markets

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meat shortage has brought forth
this explanation from the indie
pendent packers: 1.-THE shortage of
meat is not by any means due en-
tirely to the large amount which is
taken by the armed forces and
lease-lend. The shortage is due in
very substantial part to an illegal
diversion of meat from the normal
channels of distribution. We have
the worst black market in our his
tory, black market which owes its
existence primarily to the fact that
legitimate packers are required I'M
der OPA regulations to produce both
pork and beef at a loss. Nothing
gives greater encouragement to the
black market than to have the
legitimate packers in a position
where they have to operate at a
loss"
That is the statement of Wilbur
La Roe, jr., who is general counsel
for the National Independent Meat
Packers Association, representing
some seven hundred small and me-
dunn sized packers. In this capacity
Mr.. La Roe, of course, is spokesman
for the industry that he represents
But in Washington, where he is
well known, his contention will not
be brushed aside as another example
or selfish special pleading.
The OPA, if one may Judge from
the testimony of it's representatives
who have appeared before the Sen,
ate committee, is not prepared to
accept Mr.. La Roes views at face
value. But if this be so, the fact
remains that OPA has not made out
a good case for It's meat-pricing
policies. James F. Brownlee. deputv
administrator, urged the committee
10 give OPA the benefit of the
doubt" when the packers "cry that
they are being put out of business"
And he also contended that there
is now a near-record number of
cattle in feed lots in addition to
about SO,oO0,0oo on the ranges.
1t is difficult to see what bearing
either of these statements has on
the immediate question of whether
OPA policies are in part responsible
for the meat shortage. The real
issue Is not so much whether the
packers are being put out of bust
ness, but whether OPA prices are
pushing meat out of legitimate
channels and into the black market
. And if 1t be true that there is a
near-record supply of cattle in the
feed lots and on the ranges, but a
pronounced shortage in the legiti-
mate market, then the plain infer
ence is that the black market is
getting an excessive proportion of
the total supply.
The desire on the part of OPA to
prevent price increases is under
standable and laudable. But when
this is carried to the point Of forcing
essential commodities into the
black market, as seems to have been
the case with meat, then the pro-
gram becomes self -defeating. For
the patrons of the black market
have to pay above-ceiling prices,
often for an inferior product, and
those who will not patronize the
black market are denied their fair
share of the total supply.
Some good might result from more
vigorous action against the black
market operators. But Mr.. La Roe
is on sound ground in suggesting
that a better remedy lies in more
equitable enforcement of the price
control law since it does not make
sense to "set up a price condition
which causes the black market to
thrive and then seek remedy along
penal lines"