Price gouging

“ To increase these evils, a project was formed to fix the prices of articles, and restrain persons from giving or receiving more for any commodity than the price stated by authority. These regulating acts were reprobated by every man acquainted with commerce and finance; as they were intended to prevent an effect without removing the cause. To attempt to fix the value of money, while streams of bills were incessantly flowing from the treasury of the United States, was as ridiculous as an attempt to restrain the rising of water in rivers amidst showers of rain. ”

“ And, as is now well known to all of us, the same net loss to society comes from reckless overproduction and monopolistic underproduction of natural and manufactured commodities.
Overproduction, underproduction and speculation are three evil sisters who distill the troubles of unsound inflation and disastrous deflation. It is to the interest of the Nation to have Government help private enterprise to gain sound general price levels and to protect those levels from wide perilous fluctuations. ”

“ Instead of striking one decisive blow, which would have cleared the market at once, upon terms proportioned to the price of the four per cents six weeks ago, he has tampered with a pitiful portion of a commodity which ought never to have been touched but in gross;—he has given notice to the holders of that stock, of a design formed by government to prevail upon them to surrender it by degrees, consequently has warned them to hold up and inhance the price;—so that the plan of reducing the four per cents must either be dropped entirely, or continue with an increasing disadvantage to the public. ”

“ While the volume of money is decreasing, though very slowly, the value of each unit of money is increasing in a corresponding ratio, and property and wages are decreasing. Those who have contracted to pay money find that it is constantly becoming more difficult to meet their engagements. The margins of securities melt rapidly, and their confiscation by the creditor becomes only a question of time. All productive enterprises are discouraged and stagnate because the cost of producing commodities to-day will not be covered by the price obtainable for them to-morrow. ”

“ Everything that can be brought to bear by market manipulation, litigation, and other means is now being done to prevent the extension of this line, and to bankrupt the men who are building it through much tribulation. The mechanical fixation of values, by which the refiners who use this line to export oil are compelled to meet a lower price for the refined in New York than can be got for the crude out of which it is made, has been already referred to, and, as shown above, the same prestidigitation of prices is [Pg 446] being resorted to in Europe against the independents of Germany. ”

“ They tried 24 times before in the United States and in other nations. Every economic writer told them, "Just crush down the price level, and interest, remaining stationary, will have the purchasing power back again." ”

“ President, is it possible that these eminent speculators throughout the country bide their time to depress the stocks of their own Nation and then to purchase them in, and then to raise the price to the highest possible mark; then seize the products of the farmer from the farm, the results of the manufactures from the factories, at the very lowest prices to which they have been depressed, and then lift them to the very highest prices that monopoly will induce, and so sell them to the great profit of the manipulators? ”

“ Congress was under pressing necessity of meeting this danger by a practicable and expeditious means which would operate with such promptness, regularity and consistency as would minimize the sudden development of commodity price disparities, accentuated by commodity shortages occasioned by the war.
Inflation is accelerated and its consequences aggravated by price disparities not based on geographic or other relevant differentials. The harm resulting from delayed or unequal price control is beyond repair. ”

“ Every Cause hath been assigned except the true one, which seems to be "the sinking Value of Money, arising necessarily from the exorbitant Increase of Trade and Wealth." If this be so, it follows, that the Evil is incurable, excepting only by a general Augmentation of the Wages of the Poor.—Now This, which is the necessary Effect of the Exorbitancy of Commerce, naturally tends (by the increased Price of Manufactures) to the Destruction of Commerce. If the Exorbitancy of Trade should still run higher, this Evil will be aggravated in Proportion. ”

“ Fairer competitive prices, it is claimed, resulted when distress gasoline was removed from the market. But such defense is typical of the protestations usually made in price-fixing cases. Ruinous competition, financial disaster, evils of price cutting and the like appear throughout our history as ostensible justifications for price-fixing. If the so-called competitive abuses were to be appraised here, the reasonableness of prices would necessarily become an issue in every price-fixing case. In that event the Sherman Act would soon be emasculated ”

“ To amend title XVIII of the Social Security Act to require drug manufacturers to pay a Medicare part B rebate for certain drugs if the price of such drugs increases faster than inflation. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled. ”

“ They destroy competition, control the price of raw material and of the finished product, thus robbing both producer and consumer. They lessen the employment of labor and arbitrarily fix the terms and conditions thereof; and deprive individual energy and small capital of their opportunity for betterment. They are the most efficient means yet devised for appropriating the fruits of industry to the benefit of the few at the expense of the many, and, unless their insatiate greed is checked, all wealth will be aggregated in a few hands and the Republic destroyed. ”

“ Measures short of monopoly may have 'a salutary effect,' as for example a degree of control or supervision over prices not obtainable while the parties 'stood on their old footing of severalty.' But that relief is apt to be 'only transient,' for as the costs of production decline and growth of the industry 'catches up with the gain in economy,' the need for further controls or restraints increases. And so the restless, never-ending search for price control and other types of restraint. ”

“ Increase.—The dollar amount applied under subparagraph (A) (i) —
“ (i) for 2022, shall be the dollar amount specified under such subparagraph for 2021, increased by the percentage increase in the consumer price index for all urban consumers (United States city average) as of the first quarter of the previous year ”

“ That the quantity of money in the world is daily increasing, and of consequence its value decreasing, is a fact that will admit of no doubt, because there are fresh supplies daily coming from the mines, which are converted either into plate or specie. You cannot, however, possibly mean, that the sudden increase of our riches is owing to this general and slowly-operating cause, whose effects, tho' certain, are always insensible in heightening the price of Provisions. ”

“ The power to fix prices, whether reasonably exercised or not, involves power to control the market and to fix arbitrary and unreasonable prices. The reasonable price fixed to-day may through economic and business changes become the unreasonable price of to-morrow. ”

“ It is inconceivable that any sinister influence, in order to help the debtor or creditor, could manipulate a sufficient number of commodities to affect appreciably the index number. Even if some one could "corner" a market and double the price of one commodity this would not raise the general price level one per cent. To accomplish even such a feat is out of the question, while to corner or control a hundred commodities is unthinkable. ”

“ You have closed mills instead of opening them, thrown out of work thousands, lowered the price paid for raw material, bringing ruin to its producers, increased the price charged for your products to the ruin of the consumer, and saddled millions of fictitious debts on the backs of their children yet unborn. ”

“ But any forced system will soon break. Let the circulation be limited by real demand, not by legislative violence. A forced restriction of currency is as much against the natural order of things as a forced issue. ”

“ To put him where he must do so beyond reasonable doubt of error is to create a dilemma where, if he guesses right, he goes to jail, and, if he guesses wrong, he becomes a bankrupt; so that Governmental price fixing, as to all going business ultimately but means that there will be no trade sufficient even to pay for the keep of those men, heretofore carrying on the business enterprises of the United States, in the jails that will have to be provided for their occupancy. ”

“ The newspapers have been emphatic in the denunciation of the merchants who, taking advantage of the national crisis, and making capital of the fear and need of the populace, have raised the prices of the necessaries of life, and have advised the people not to submit to the imposition. Today [Pg 10] the poorer classes have adopted the policy of smashing anything for which an unreasonable price is demanded. ”

“ When the crop comes in, the price will be kept down, by appreciating or purifying paper currency, by lessening the quantity. Under this influence, those who work the furnace, buy. The loss, like adulterations of specie, falls upon ignorance and industry. It is a law of maximum, or for fixing prices, except that an interested party regulates them, instead of a government. ”

“ And, friends, I want to repeat once more and warn you that you cannot crush down a price level, after you have done business for a number of years on a certain price level. You bought and sold your farms and homes and your goods on the shelf. Every obligation and future contract is based on this price level. You cannot crush a price level down unless you bring in return to the people starvation and deprivation and misery and want and soup kitchens and bread lines. ”

“ So that whatever is adopted to lower prices by diminution of the quantity of currency, produces, in the nature of things, a direct spirit of counteraction, because the lowering of prices augments the pressure of taxation. And in addition to the abstract nature of things, we have also to combat all the passions and interests of mankind, as far as they relate to their ease and profit. ”

“ It is unfortunate for the consumer because it makes prices uneven, and it inflicts cruel injury upon laborers and operatives, and through them upon the whole community.
Here, then, is the evil. Speculation inflames it; currency inflation stimulates it; but undiffused, unregulated, and unrestrained production throws the whole complex machinery of trade out of order; it stirs the whole energies of the people into producing at one period, and arrests energies at another; in suddenly stopping production, it reduces consumption, and hence renders recovery the very labor indeed of Sisyphus. ”

“ Thus, as during the present rise of prices, strikes, riots, violence, and the other secondary effects of rising prices destroy the profits of the winners by blocking the wheels of industry and even destroying its tools. If we are going to have discontented workmen smash our windows and run the wooden shoe through our machinery, it is not so much a question of who is going to get the profits as a question of whether there are to be any profits. If we want workmen to be contented, we must let them have a fair share of prosperity and not let a shrinking dollar defraud them. ”

“ These are the only sensible and legitimate ways of controlling and lowering the price of Gold: not the contracting our currency, distressing our merchants, increasing our taxes, and withdrawing those means of credit and accommodation by which we have gained our power and superiority in the commercial world.
No one can be more aware than the writer of the evils which spring from over trading, which often results from too great facility in acquiring credit and currency: but it is an evil which has a tendency to cure itself. ”

“ Authority is asked also to establish prices, but not in order to limit the profits of the farmers, but only to guarantee to them, when necessary, a minimum price, which will insure them a profit where they are asked to attempt new crops, and to secure the consumer against extortion by breaking up corners and attempts at speculation when they occur, by fixing temporarily a reasonable price at which middlemen must sell. ”

“ It is only its sudden increase or sudden decrease that has any influence upon the internal state of a kingdom: the former, by raising the price of commodities, before the price of labour can be raised, naturally tends to quicken the industry of the people, and to make them active, alert, and vigorous; the latter, by lowering the price of commodities, before the price of labour can be lowered, as naturally tends to slacken their industry, and to make them lazy, indolent, and slothful. ”

“ Any combination which tampers with price structures is engaged in an unlawful activity. Even though the members of the price-fixing group were in no position to control the market, to the extent that they raised, lowered, or stabilized prices they would be directly interfering with the free play of market forces. The Act places all such schemes beyond the pale and protects that vital part of our economy against any degree of interference. Congress has not left with us the determination of whether or not particular price-fixing schemes are wise or unwise, healthy or destructive. ”