A Poster on Inflation

No economic problem has been as persistent and intractable in recent times as inflation, President Carter, for example, in an effort to halt today’s rising price spiral, established voluntary wage-price guidelines in October 1978. Difficulties caused by rapidly rising prices have emerged periodically throughout American history. Inflation is especially acute in time of war, when unemployment is low, people have money to spend, and goods are scarce—factors that drive prices upward.

From 1914 to 1918, for example, the impact of World War I increased prices by a staggering 60 percent. After the United States entered World War II, the Government, anxious to keep the lid on inflation, established the Office of Price Administration (OPA). Congress authorized the OPA to "fix" prices on goods and rents, and the OPA set the prices prevailing in March 1942 as ceiling prices. To charge anything higher was illegal. The OPA regulated prices on products ranging from automobiles to toilet tissue in an effort to hold the line on practically all consumer goods and services.

In addition to fixing prices, the OPA set up a distribution system for goods in short supply. Wartime shortages occurred principally among goods that the military now used in greater quantity than in peacetime and also among imported goods because of transportation difficulties. Because the consumer demand for such goods as sugar, coffee, meat, tires, and gasoline exceeded the supply, the OPA limited by "rationing" the amount of these items that an individual could purchase. Every person received ration coupons, which were turned in at the time of purchase.

In order for its programs to be effective, the OPA needed wide public support. It used a variety of methods to encourage the public to buy from retailers who observed OPA regulations and CO discourage people from buying on the "black market," where scarce products could be purchased illegally at prices considerably higher than levels set by the OPA. The OPA sought public cooperation by explaining its objectives and citing the dangers of inflation in brochures, speeches, school programs, radio shows, films, and posters. It also sponsored a campaign in which 15 million housewives signed the pledge, "I pay no more than ceiling prices. I accept no rationed goods without giving up ration stamps."

Was the OPA successful in holding the line against inflation? The cost of living rose 30 percent during World War II, which was a significant improvement over the rate of inflation during the First World War. Yet, the rise in prices was still troublesome. After the war, when President Truman gradually relaxed OPA regulations, the dislocations in the economy caused by wartime price controls contributed to a sharp increase in prices and a serious inflationary cycle.

The poster reproduced here is an example of the OPA’s campaign to convince the American people to help control inflation. It is part of a collection of over 3,700 posters in Records of the Office of Government Reports, Record Group 44, in the Audiovisual Division of the National Archives.

Suggestions for Teaching

Allow time for the class to study theposter. Then review the four steps in an inflationary cycle (see poster), making certain that students understand how each step follows the other. Now choose a particular industry—clothing, for example—and again go through the four stages to see how inflation affects the industry.

Questions to Discuss with the Students

1. At whom was this poster directed? How could citizens help the OPA fight inflation?

2. In what way would each person be affected by inflation? Who would be harmed the most? Who might benefit: a homeowner, a Government worker, a retired couple with a fixed income, a father with a large family, a minimum wage earner, a manufacturer?

3. Inflation occurs when the amount of money in circulation exceeds the total availability of goods and services; deflation occurs when people lack sufficient buying power to purchase the available goods and services. When in American history has deflation been a problem?

4. We are living in a highly inflationary period. What recent price jumps have you observed? How do you react to the higher prices? Discuss how the Carter administration planned to control it.

Posters as Historical Documents

1. Should this poster be saved as a historical document? Why?

2. What artistic details make this an effective poster?

3. Posters are frequently used in citizen participation campaigns. What characteristics do they have that make them popular?