Inflation has been in the news quite a bit lately. As the world emerges from the dark days of the pandemic, we are experiencing a period of high demand and low supply. The war in Ukraine has only exasperated the situation and it seems as if the prices on just about everything are skyrocketing.
Yet, as bad as things seem today, they don’t compare with what happened during World War II. Here in the United States, the needs of the military came first, which included not just the raw materials needed to make tanks, ships, and weaponry, but also the supplies needed to feed our troops. This created severe shortages of nearly everything, including gasoline, automobiles, sugar, dairy, and meat. And, as we are experiencing right now, shortages typically lead to high inflation.
To avoid this, the federal government introduced ration stamps. So, to make a purchase, a consumer needed to hand over both the cash and the required ration points. For example, a can of corn would require 14 points, while a can of peaches was 21 points. This not only reduced demand but also assured more equitable distribution of the goods.
Coupled with the rationing program was a series of price controls in which the government would cap the maximum price that could be charged for a product, with the goal of keeping inflation under control.
This is all an oversimplification of the steps that were taken, but let’s take a look at one product that had been subject to price controls: bread.
As we all know, nearly all bread is wheat-based. During WWII, the demand for wheat began to increase, and because so many men were overseas fighting the war, there were fewer people to harvest the fields. That meant that the price of wheat began to rise, which resulted in a 10% increase in the price of flour from the mill, which translated into higher costs for the baker. The net result would be that the baker would have to charge more for a loaf of bread. But, they couldn’t because the federal government had already placed a cap on bread prices.
This basically left the bigwigs in Washington with two options: First, they could simply raise the price the baker could charge a consumer for the loaf of bread, which would cause the cost of living to increase. A second option was to have the bakers absorb the added cost, but they were already operating on razor-thin margins.
When stuck between a rock and a hard place, you can count on the federal government to come up with a solution that wouldn’t be beneficial to either the consumer or the bakers. On Tuesday, December 29, 1942, they announced that beginning January 18, bakers would no longer be able to slice bread. Their thinking was that the bakeries could save a lot of money on both machinery and manpower in doing so. That’s because the thin blades used in slicing the bread were costly to purchase, had a limited lifespan, required constant resharpening, and used steel essential to the war effort. In addition, each sliced loaf required two sheets of wax paper to keep it fresh, while an unsliced loaf only required one.
One baker commented, “Not slicing the bread will save something.” He continued, “It will eliminate one operation, cut the paper consumption in half, and reduce labor costs a little. But all these things together won’t go far enough toward making up the increase in flour prices.”
The net effect of all this was that it was now up to the homemaker to slice the bread. This had unintended consequences: First, there was far more waste by cutting bread at home. The bakery could slice it far more efficiently. Next, most people didn’t own a bread knife, so they had to now go out and purchase one. This resulted in a surge in bread knife sales, which were manufactured from much-needed steel, which ultimately caused the price of the knives to surge.
Once the slicing ban went into effect, bakeries noticed a drop in bread sales. Plus restaurants were complaining because they now needed to hire more staff to slice the bread. While they weren’t banned from using machinery to slice the bread, the war shortages made it impossible to purchase such machinery.
The ban had only been in effect for 47 days when, on March 6, 1943, Secretary of Agriculture Claude Wickard announced that he was rescinding it. “The order prohibiting the slicing of bread was aimed at affecting economies in the manufacture of bread and in the use of paper.” He continued, “Our experience with the order, however, leads us to believe that the savings are not as much as we’d expected and the War ProductionBoard tells us that sufficient wax paper to wrap sliced bread for four months is in the hands of paper processors and the baking industry.”
Three days later, full-page advertisements were run by the makers of Wonder Bread in newspapers all across the country announcing, “Wonder Bread Brings You Sliced Bread Today.”