Black Markets

September 9, 1943

Report Outline
Problem of Black Markets in Time of War
Black Market Controls in Britain
Control of Black Markets in United States

Problem of Black Markets in Time of War

Illicit Trade as an Accompaniment of War Controls

Black markets in foods, gasoline and other commodities are an outgrowth of government efforts to hold down prices and enforce an equitable distribution of available supplies at a time when the American people have more money to spend than ever before and sparse stocks of durable goods to purchase with their increased earnings.

Price ceilings and rationing have brought black markets in their train wherever they have been invoked in an effort to avoid the greater evils that would result from runaway inflation. Without rationing and price controls, there would be no black markets but all consumers would be compelled to pay the equivalent of black market prices for the necessaries of life.

Canada, with its comprehensive system of rationing and price controls, has held fluctuations in wages and the cost of living within narrow limits during the last two years. In Mexico, where consumers are not rationed and there are no price ceilings, food costs had risen 18 per cent during the first seven months of this year, 57 per cent since 1941, with an accompanying epidemic of strikes and threats of strike. For the United States, the corresponding figures were 4.8 per cent and 30 per cent.

ISSUE TRACKER for Related Reports
Underground Economy
Mar. 04, 1994  Underground Economy
Apr. 06, 1984  The Underground Economy
Sep. 09, 1943  Black Markets
Commercial Law