Price Controls End After Corporate Decontrol Campaign, Inflation Spikes

The Office of Price Administration effectively ends on November 9, 1946, when President Truman removes controls on most consumer goods following intense corporate lobbying and deliberate business disruption. The premature decontrol triggers an immediate inflationary spike that harms consumers while enriching corporations that had campaigned to end controls.

Wartime price controls, administered by the OPA, had kept inflation relatively modest despite massive deficit spending. OPA Administrator Chester Bowles warns that premature decontrol will unleash pent-up inflationary pressures. Business interests dismiss these warnings as government overreach and demand immediate termination of controls.

The National Association of Manufacturers and meat industry producers orchestrate deliberate shortages to create public pressure against controls. Cattle are held off market; meat disappears from store shelves. The resulting “meat famine” is blamed on price controls rather than industry manipulation. Politicians facing the 1946 elections respond to constituent anger by voting to weaken the OPA.

Congress extends OPA in June 1946 but strips its enforcement powers and mandates decontrol of many products. Truman vetoes the weakened bill, creating a brief period with no controls at all. Prices immediately spike. Congress passes a marginally stronger bill in July, but the damage is done. By November, Truman concedes defeat and ends most controls.

The aftermath vindicates Bowles’s warnings. Consumer prices rise 18 percent in the twelve months following decontrol, erasing wartime wage gains for many workers. Meat prices increase 70 percent. The inflation disproportionately harms working families while generating windfall profits for corporations that had organized the decontrol campaign. The episode demonstrates how coordinated corporate action, including deliberate market manipulation, can defeat consumer protection measures by generating artificial crises blamed on regulation.