I wish to point out that we never
devoted more than fifteen per cent of our resources to the war in any year of world war I, whereas in world war II, in some years, we devoted approximately fifty per cent of the production of the country to the war. And economists have always told me that that is the main factor in driving
prices up-the proportion of output that you shoot away and send away, leaving in the country the purchasing power that was paid out to produce it, and nothing to spend it on. That is a powerful inflationary influence. It must be remembered that in many countries where there existed no effective control, prices were going up 100, 200 and 300 per cent, and I am not talking of wild inflations such as occurred in China and other places. But if we assume that prices would have risen, and the inflationary factors were more powerful in the last few years than in the years between 1914 and 1920, much more powerful-if we assume, I say, that prices would have risen, without control, just to the same extent proportionately, year by year, as they did in the period from 1914 to 1919, then these are the results you get: the consumers would have had to spend an average of nearly $8 billion between 1942 and 1946.
Subtopic: AMENDMENT, MR. DREW