[Fighting Inflation in 1945]
[From the U.S. Government Publishing Office, www.gpo.gov]

INF-t.377 ( 2- 4S)
OPA INFORMATION LEAFLET
FOR SCHOOLS AND GROUPS LEAFLET NO. 29-Feb. 1945
EDUCATIONAL SERVICES BRANCH DEPARTMENT OF INFORMATION OFFICE OF PRICE ADMINISTRATION
FIGHTING INFLATION iN 1945 - THE WARTI M E JOB AHEAD
During the new year, 1945, the American people face the hardest battles of the war, in military zones and on the home front. Of all battles at home, that against inflation is among the most important and most difficult to win.
In the months ahead, the forces making for inflation can become even stronger. This means that all American civilians will have to increase their efforts to control these forces so that the line is firmly held on all wartime prices. What these forces are and how they can be kept within bounds is outlined here, the inflation problem which America faces in 1945.
It May Look lake a Good Idea in the Beginning
HOW LARGE ARE WAR EXPENDITURES?
To provide the men and materials needed to fight this war, the United States Government has been spending more and more billions of dollars. These expenditures increased from $2.8 billions in 1940 to $91.0 billions in 1944. Last year this amounted to about $7% billions a month or $250 millions a day.
A sizable part of war expenditures have gone into the production of military equipment and munitions. From the war’s beginning until December 1944, for example, America produced
about:
68,000 tanks
178,000 planes
1,800,000 trucks
2,800,000 big and medium guns
15,000,000 machine guns and rifles
43,400,000 bombs of all types 43,000,000,000 rounds of ammunition
HOW HIGH ARE TOTAL INCOME PAYMENTS?
Because of war expenditures, the total amount of money paid to wage - and salary - earners, farmers, businessmen, and others is mounting higher and higher.
In 1944, according toX/ie U. S. Department of Commerce, total income payments to individuals reached the record-breaking peak of $157 billions. This was 9 per cent’higher than in 1943 - more than double the figure for 1940.
Large groups of our population have shared in this wartime prosperity. The total cash income of farmers, says the U. S. Department of Agriculture, increased from $8.6 billions in 1939 to $19.9 billions in 1944, up 131 per cent. Total wages and salaries paid, reports the U. S. Department of Commerce, rose from $44.2 billions in 1939 to $112.0 billions in 1944, up 147 per cent.
The increase in total income payments to Americans has brought a corresponding increase in their demand for the civilian goods and services which are still available.
HOW LIMITED ARE CIVILIAN GOODS?
In 1944, America produced about $99 billions worth of civilian goods and services, slightly more than the year before. It also provided about $91 billions worth of goods and services for war purposes.
This is a remarkable production record. But because war requirments are still large, Americans at home will have to continue to get along with a limited supply of many of the things they need and want.
Already civilians are doing without new automobiles, refrigerators, radios, and other durable goods because factories formerly making these things are now making war equipment.
Also civilians are buying less meat, butter, canned foods, sugar, gasoline, shoes, and scarce essentials Decause large shares of these products too are going to the military services and because civilian shares are rationed. "Rationing distributes limited supplies equitably. It does not increase the total supplies available to civilians.
HOW AMERICANS USED THEIR INCOMES IN 1944
TOTAL INCOME PAYMENTS TO INDIVIDUALS
<------------$157 BILLIONS-----------------
*20 BILLIONS	*99 BILLIONS	*38 BILLIONS
PAID FOR
SPENT FOR
PUT INTO
DIRECT PERSONAL TAXES
CONSUMER GOODS & SERVICES
WAR BONDS BANK ACCOUNTS & OTHER SAVINGS
TAXES
FOOD
RENT CLOTHING OTHER
SAVINGS
ROW DOES GREATER DEMAND FOR A LIMITED SUPPLY AFFECT PRICES?
During 1944, as the chart above shows, Americans had $137 billions of disposable income, -that is, after paying their direct taxes. If they had used all these billions to try to buy the available supply of civilian goods and services worth $99 billions, It would have been the same as $4 in purchasing power bidding for $3 worth of goods and services. This would surely have pushed prices, skyward.
HOW HAVE WARTIME MEASURES HELPED HOLD PRICES STEADY?
Price and rent control have done much to hold prices steady during 1944. Throughout last year, the cost of living stayed at about thesame general level.
Rationing has helped hold down civilian demand for scarce essential goods, and has thus aided in keeping prices under control.
Stabilization of wages and farm prices have helped prevent inflation, higher incomes and prices* During inflation, it should be noted, rising incomes usually lag behind rising prices.
Heavier taxes have helped keep prices within bounds, by siphoning off the excess purchasing power which forces prices upward.
Saving, instead of spending has aided in keeping prices down. During 1944, for example Americans saved some $38 Dillions. They put these funds into War and other Government bonds ($16 billions) and into other savings ($22 bil-lians), - insurance, debt payments, bank accounts, and currency.
EVERY AMERICAN CAN DO HIS PART TO MAKE PRICE CONTROL, RATIONING, AND OTHER WARTIME MEASURES WORK IN HIS OWN HOME AND GDMMINITY.
When he does so, ne helps protect all civilians and all men in military service against skyrocketing prices in 1945.
He also helps America to prepare for postwar years which are free from inflation or depression and which are prosperous and secure.
HE’S GOT SOMETHING ON THE BALL
M-IOB
u. S. GOVERNMENT PRINTING OFFICE : 1945 O - 631726