Arval Erikson–OPS (Office of Price Stabilization)-1951-53

Arval Erikson–OPS (Office of Price Stabilization)-1951-53

Arval wrote very little about his activities with OPS. The only information available was from travel vouchers, some letters & other resources. This narrative was compiled by Joan, his oldest daughter

The Korean War started on June 25, 1950 and lasted until July 27, 1953. Shortly after the outbreak, Pres. Harry S. Truman told the nation that he would ask for price and wage controls if prices increased. One effect was to stimulate sales of canned meats and some other non-perishable foods. A little later Congress passed the Defense Production Act giving the president authority to place ceilings on prices and wages and to allocate scarce materials. In many respects the pattern was repeated from OPA: Free orders, rollbacks, slaughter controls, dollars-and-cents ceilings, black marketing, declining volume, livestock prices out of relation to finished product prices, set-asides, compulsory grading and exhortations and threats from the control agencies.

The Office of Price Stabilization (OPS) was formally established on January 24, 1951, with Michael DiSalle, mayor of Toledo, being appointed by Pres. Truman in December 1950 as its administrator/director. Through its 14 regional and about 90 district offices, the OPS obtained voluntary compliance with measures to stabilize prices and established and administered price regulations. OPS operations were hampered throughout its existence by the continuous debate over the appropriate level of mobilization and governmental economic control required for an undeclared war. The Agency was disbanded on April 30, 1953.

FAO TO OPS

The onset of hostilities with Korea in 1950 came as a complete surprise to Americans. Fear of a major conflict with the Soviet Union and still-fresh memories of rationing programs during World War II led to massive hoarding and panic buying by both consumers and manufacturers. By the end of September 1950, government figures showed that prices for a basket of 28 commodities had increased by 25% since the beginning of the war three months earlier.

On October 24, 1950 Blaine Liljenquist had written Alan Valentine, the first Administrator of the Economic Stabilization Agency (ESA), recommending Arval as the Price Administrator. In November 1950 a memo from Geoffrey Baker (ESA) said that “arrangements had been made to employ Mr. Arval Erikson at a grade of GS15 upon completion of his service with the FAO. Mr. Erikson expected to be available not later than March 1951 when FAO leaves for Rome. “ (FAO actually moved in February.) Arval had worked under Baker at OPA. Valentine was followed by Eric Johnston in February 1951 and then by Roger Putnam a few months later.

On December 18, 1950 DiSalle wrote that he would like to appoint Mr. Arval Erikson as a full-time consultant to assist and advise him concerning the food problems for approximately four months. Mr. Erikson was to receive compensation at the rate of $50 per day. (DiSalle resigned on January 23, 1952, to run for a seat in the Senate which he did not win.)

One day early in January 1951, Chester Bowles, the first Administrator of OPA, showed up at my FAO office. He had been asked to help recruit the personnel for the food division. I quickly set about winding up my FAO work.

OPS

I joined the OPS staff on a part-time basis as Food Consultant to Michael V. DiSalle, head of OPS. The balance of my time during this period (Dec 18, 1950-Mar 1951) was utilized in winding up my work with FAO. In Mar 1951, I resigned from FAO to accept a full-time position with OPS. On March 29, 1951 Mike DiSalle announced the formal appointments of 23 men to help direct price control operations dealing with virtually every commodity and service used in the national economy. Arval L. Erikson was to be the acting assistant director of the Food and Restaurant Division working under Edward F. Phelps, Jr. Director of Price Operations. Arval would bring to OPS a wide range of knowledge of agricultural and food problems at both the national and international level. Arval actually received pay as a Consultant for 9 ½ mon. because of problems within other agencies and it just took time to move him from Consultant to Assistant Director of the Food and Restaurant Division.

From an article in "The Reporter" of April 17, 1951 quoting Arval Erikson, asst. director of the OPS food program and its leading expert on meat controls says: "I had hoped when I first went with the agency that we could avoid a price freeze on meat....The meat-price freeze, whatever the source and whatever the reason, was a mistake."

An October 1951 congratulatory letter from the Secretary General of the International Federation of Agricultural Producers: “I know nothing of his (Arval) administrative ability, but do know that he is a very hard working and conscientious person. He knows his job. He has a flair for practical application to the problems at hand. J.B. (Jack) Hutson, former director of the OPS Food and Restaurant Division, always spoke very well of him and the only criticism he had was that Erikson didn’t enter into outside office functions as much as Hutson thought he should. On the basis of his economic ability I would recommend him. As a matter of fact, we tried to hire him, but couldn’t offer him as much money as OPS. I have no question as to his character or loyalty to the US.”

LOTS OF LEAVING AND MOVING AROUND

The work at OPS was a continuation of our work at OPA. As predicted, Jack Hutson became head of the Food Division, with George Mehren and me as Assistant/Associate Heads. And, as predicted, Hutson resigned in a few months on July 22, 1951. Edward F. Phelps, Jr., our boss (Director of Price Operations), asked George if he would stay on if I were made Division head. George answered: "I guess so." Phelps asked me the same sort of question, and I said, "I guess so." "Well," said Phelps, "in that case we'll name George the head. I wouldn't know where to get anyone to handle the livestock meat job if you became head of the Division." I really didn't care if George was made Head. I knew he would leave my area alone. [At that time I was the assistant Director of the Food and Restaurant Division and supervised the meat programs and the pricing of related products.] After Hutson resigned Mehren was appointed acting director & I continued as assistant director with supervision of the Meat Branch and several other branches of the Division. “He is widely known in meat and agricultural circles.”

In August 1951 I received a letter from Geoffrey Baker: “George Mehren will continue in his Acting Director status. After six months or so the Agency may be able to qualify him for the Director job, in which case he will assume that title. Your work on the meat side is, of course, of the greatest value to us, but I think you will agree that if you are to accomplish that nearly impossible job, you cannot undertake the responsibilities of supervising all of the other seven branches. From the standpoint of experience and ability there is no reason why you could not handle the Director job in a highly satisfactory manner, and I just wanted you to know that DiSalle, Phelps and I are unanimous in this view. It’s just a case of you being infinitely more valuable right where you are.”

Mehren stayed only a few months and then resigned; he was worried about his job at the University of California. Phelps came to my office and said, "You're it." "What does that mean?" I asked. "You're the new head of the Food Division. Don't you want the job?" "Not if you treat me like you did George." "What was wrong with that?" asked Phelps. "You gave him the work, but you didn't give him the title or the salary," I answered. "Okay, okay," he said. "You'll get the title and the salary." "The title, Director of the Food and Restaurant Division, was announced July 30, 1952. I said that the title was fine, but leave the salary alone because it’s okay. [He worked at a GS-17 level with a salary of $13,000. At the time GS18 was the highest grade at $14,800.] This was my last job in Washington; it lasted only about one year.

My long-time friend, Blaine Liljenquist, sent me a clipping from the July 31, 1952 issue of the "New York Journal of Commerce" entitled, “Erikson Appointed OPS Division Head”. “I am very delighted that you have received this outstanding recognition. Your appointment is richly deserved as you have always demonstrated foresight and understanding in economic relationship pertaining to our industry. I do not believe that there is anyone else in the United States that can fill this difficult assignment as well as you can fill it. You have earned the respect of the industry and everyone I know of has great confidence in your ability and judgment.”

RESPONSIBILITIES

As Assistant Director of the Food and Restaurant Division, I helped organize and staff the Division, selected industry consultants and set up Industry Advisory Committees. I assisted in the general administration of the Division. I supervised 150 business specialists, economists and others. However, I had full responsibility in livestock, meat and related areas and with respect to these commodities I reported directly to the Director of the Agency.

Because of the major importance of meat in the control of inflation, I worked closely with the directors of the Agency, Michael V. DiSalle and the former Governor of Georgia, Ellis Arnall, in carrying through a program which would strengthen the general efforts of the OPS.

As Director of the Food and Restaurant Division I worked under Joseph H. Freehill, another Director of OPS. I had responsibility for the development and administration of the various food and agriculture programs within the broad, general framework of Agency policy. I supervised the division which included 11 branches and 38 sections with a personnel staff of more than 300 workers consisting of business specialists, economists, analysts, etc. In addition, a large number of business consultants served in the division on a part-time basis and approximately 100 industry advisory committees were set up in this division to assist in the development and carrying out of various regulations and programs. The regulations developed in the Division covered most food and agriculture commodities at the manufacturing, wholesaling and retailing levels, with some extending to the producer level.

With the assistance of staff and industry consultants, advisory committees, etc., I directed the work of developing pricing regulations relating to four major branches in the Food and Restaurant Division: Livestock Branch, the Livestock and Meat Distribution Branch, the Meat and Fish Branch and the Fats and Oils Branch including soaps. In the field of livestock and meat distribution, I directed the development of livestock allocation among slaughterers and the allocation of meat. I served as chairman of important meetings held with Industry Advisory Committees and informal gatherings of industry groups which met for discussion of Division problems. In this capacity I have made talks at several gatherings, including the annual conventions of the American Meat Institute, the Western States Meat Packers, the National Association of Food Chains and the National Association of Retail Meat and Food Dealers. The work required frequent meetings with congressional committees, participation in congressional hearings and interagency meetings with heads of other agencies.

I testified before the House Committee on Agriculture in May 1951 on "Beef Ceiling Price Regulations". It appears it was a somewhat confrontational meeting with the vice-chairman of the committee, W.R. Poage of Texas, who was most unhappy with the way I was answering the questions. In a letter from Herman Greenberg, a Washington attorney, on May 21 to Mr. Harold D. Cooley, chairman of the committee defending me: “It was shocking to me to read that Mr. Poage saw fit to attempt to attack the integrity and capability of Mr. Arval Erikson. I have known Mr. Erikson intimately for more than ten years and during that time I have worked with him as a colleague and also as a private practitioner, have had occasion to be on opposite sides of the question from him. Of my own knowledge I can state unqualifiedly that no person who has ever had any dealing with Mr. Erikson could challenge either his integrity or ability. His great knowledge of the meat industry and his utter lack of bias are immediately apparent to anyone who has business with him. He is a public servant of the highest caliber and I would think the government would consider itself fortunate to have his services during these critical times.”

The many trips he made were by train and plane. During these periods he rarely took any days off. In a letter dated June 23, 1951 he said that during the first part of 1951 they were “into a bad jam here in OPS where we were working seven days a week and nearly every evening. Because of the pressure under which we have been working, I have frequently stated that I wished I had gone to Rome.”

1951 - Arval had a very busy schedule meeting and speaking with various groups as a representative of OPS.

•January - Met with representatives of the major meat packers in Chicago.

•March - Attended a meeting on live hog ceilings in Chicago.

•May - Traveled to New York City to appear on a television program, the Court of Current Issues speaking on “Can Price Controls Work”. Testified before the House Committee on Agriculture. Comments about these activities: From E. F. Phelps, Jr. “My scouts tell me you did very well on your television program. Also, I am informed you held your own in good shape before the House Agriculture Committee. It’s too bad that you have to be exposed to some of these things, but at least it indicates that we were exercising good judgment when we coaxed you back into this arena. More power to you and hold the fort.” From another person about the TV show: “We would like to call on you again when we schedule a subject in which you are interested.”

•May - Spoke before the 5th annual convention of the Western States Meat Packers Association on “The Current Outlook on Meat Controls” and was on a panel for a radio broadcast.

•June - In Seattle and Portland to represent OPS at regional meetings of the Western States Meat Packers Assn. In Chicago to confer with regional office personnel, to attend a meeting with Mr. DiSalle and cattle feeders at the Chicago Stockyards, in New York City to appear on a television program on the subject “Beef” in opposition to a representative of the American Meat Institute.

•July - Radio broadcast.

•August – In Cincinnati for a speech at the convention of the National Association of Retail Meat and Food Dealers. A letter from one of the Regional Price Executives: “The principal speaker at the program was Mr. Arval Erikson who served as a replacement for Mr. Mike DiSalle. I wish to go on record that we were highly pleased with Mr. Erikson and feel that our pricing program at the Washington Office is in very capable hands. He is to be commended for his abilities and also for the adroit manner in which he handled a ‘very difficult’ topic.”

•September - Attended meetings in Chicago of the American Meat Institute and the National Independent Beef Slaughterers Association where he spoke on “Price Control on Meats.”

•November - Attended a meeting of the National Casing Institute and to confer with officials in the New York City Regional Office of OPS about meat problems. He also spoke on “Price Controls on Meats” at the 46th annual meeting of the American Meat Institute.

1952 – Another busy schedule. During this year I was also a member of the Agency’s Suspension and Decontrol Committee which had been established for the purpose of developing policy and procedures for the orderly elimination of controls.

•January - Attended a meeting at the Union Stockyards in Chicago of the National Independent Beef Slaughterers Association; conferred with the Chicago Regional Office officials concerning meat regulations.

•May - In San Francisco to meet with the Western States Packer Feeders with respect to a revision of CPR 23. Visited the District Office in Salt Lake City to discuss meat in general, but specifically, the proposed hog regulation and the freezer food plans.

•November - On the same trip flew to Minneapolis to meet with regional and district Directors from five regions to discuss the Division viewpoint with respect to retail beef rollbacks on November 15. Flew to Idaho Falls to meet with the Idaho Wool Growers Association to discuss the impact of regulations on the present lamb situation and general marketing. Met with the Idaho State Farm Bureau Convention in Pocatello to discuss the general viewpoint of the Agency as well as general marketing.

ELECTIONS AND THE LOSS OF MY JOB

In the 1952 fall elections the Republicans won big with Dwight D. Eisenhower being elected president. [Dad and I were able to watch the inaugural parade on January 20, 1953 from the hotel room and balcony of the old Willard Hotel that Earl M. Gibbs and his wife, M.J. had rented. Gibbs was a meat processor and food company president in Cleveland.]

it was easy to see that price controls would soon be lifted on most products in my Division, for we knew that the Department of Agriculture, and the soon named Secretary, Ezra Taft Benson, wanted controls off almost all agricultural products. I had been urging removal since early fall. On February 6, 1953, President Eisenhower's Executive Order called for the end of all price and wage controls. OPS ended all activities on April 30, 1953 with residual operations passing to the ESA.

On the second day in Benson’s new job as Secretary of Agriculture, I had a call from Benson asking my position on the decontrol of ceiling prices in cattle and beef products. I gave him our Agency’s position. He said “I know your Agency thinking. Would you tell me, confidentially, what your own position is?” It was known in the trade that I had supported decontrol for weeks and I confirmed this to Sec. Benson. He said “That’s all I wanted to know. I’ll see the president tomorrow and a presidential order will be issued to de-control these products.” (This happened in the first two weeks of February 1953.) Benson called me to say that a Presidential Order would be issued the following day decontrolling ceiling prices on livestock and meat. "I was expecting it," I said. Sec. Benson said he wanted to visit with me and asked me to call his secretary and arrange for a time. I met with him, and he said he would like to have me in the Department. There was a suggestion that perhaps it could be arranged to have me as second in charge of the Marketing Department, the largest unit in the USDA. It was a position I would have liked. However, it was occupied by a person who was sponsored by a Senator, and I knew that Sec. Benson would not run the risk of offending an important Senator by transferring a person to make room for me.

Arval received a letter dated Feb 26, 1953 from Peter H. Petersen of Petersen-Owens, Inc in NYC: “We just about got the Agency wound up with our big decontrol action of yesterday on groceries, cigarettes, etc. I think most of our people are glad to have the operations end, particularly in view of the situation which has prevailed for the past several months. We appreciated very much the assistance we obtained from you (Erikson) as a member of our several industry advisory committees. The Industry Advisory Office told me yesterday that you were on more committees than any other man. We didn’t mean to overwork you, but sincerely felt that you could be most helpful to us in representing your industry.”

OUT OF WORK

I was now out of a job as of April 30, 1953. (In other notes, he says June 30. Us children didn’t even know this.) Many letters were written on Dad’s behalf when he knew that OPS was going to be terminated. In February he received a letter from the United Nations stating that job possibilities at the UN were almost non-existent and from someone else that there were no openings for “which your particular experience would be appropriate. Quite frankly I see very little prospect of our having a post in your field”. Arval also looked for a job at the State Department. From a Mr. Conason on June 30 who had worked at OPS: “The job-hunting has not been very good for any of our people. In a discussion yesterday with Hans Hirsch we were unable to think of any of the Price people who had obtained jobs other than those with re-employment rights.”

In April I wrote to Geoffrey Baker (I worked with him at OPA and OPS) who thought the best opportunities would be in the area of foreign agricultural service because it looked like there was not an opportunity of going into the USDA’s livestock and meat program and probably nothing in dairy. It turned out that there was actually a freeze on the hiring of additional employees in the USDA at that time.

It was thought that Sec. Benson would be consulting with people on key personnel. Many letters were written on my behalf. Some of the comments were: “He (Arval) has earned the respect and admiration of us; has dealt fairly in administering the law and demonstrated a real understanding of the American economic system. Arval has a very analytical mind and also has fine administrative ability. I have a deep respect for his integrity and ability. This job (OPS) is a difficult one, but Mr. Erikson has the respect of those who opposed price controls and quotas. As a public servant he has attempted to carry out the law according to its purpose. I do not know Mr. Erikson’s politics, but I do know he is fair and objective in carrying out his work. Again I urge that you consider Mr. Erikson for a high position in the Department, as his work will be productive of excellent results.”

From Irvin Busse of Busse Brokerage to Sec. Benson: “During the very trying years of OPA and again during OPS, I had considerable very close contact with Mr. Arval Erikson under whose administration the meat section came. In view of the fact that he was most capable and his approach to the many very difficult problems most intelligent and because of his experience and background I believe you would find most helpful in a good, sound, practical administration, as I am sure you anticipate. I believe you would find it most desirable to have Mr. Erikson in a responsible position on your staff. I for one in the Packing Industry would feel much more at ease if I knew Arval Erikson’s honest consideration and practical knowledge and experience were being utilized in the Department of Agriculture in the trying times which are undoubtedly ahead.”

From E.F. Forbes, President and General Manager of the Western States Meat Packers Association to Sec. Benson: “I know you are interested in obtaining the services of able people and I want to recommend to you Arval L. Erikson. I have personally known Mr. Erikson for several years. Because of the positions he has held in government, the Western States Meat Packers Association and many of our members have come in close contact with him and his work. Even though Mr. Erikson was operating a program not generally in favor among our members, his understanding of our problems and his fairness in carrying through his work have earned him the respect not only of our people but of many other groups in the food industries. It was because of these facts, together with Mr. Erikson’s background in food and agriculture, that we and others encouraged him to accept a position with OPS when the price control agency was getting underway. We felt that we needed a person who understood our problems and was sympathetic to them. Erikson’s presence in OPS undoubtedly prevented many hardships to our industry which might otherwise have been forced upon us. We sincerely believe that Arval’s ability, his fundamental philosophy and his excellent grasp of the economics of agriculture would prove very useful to the U.S. Department of Agriculture. In addition to being admirably equipped for work in the meat and dairy areas, Arval’s four years of experience with the FAO of the UN should, I feel, particularly qualify him for work in your new foreign agricultural program.”

In a letter from Geoffrey Baker, vice-president of Ralston Purina to Sec. Benson: “Perhaps the most important attribute which Mr. Erikson has, in addition to his professional experience, is his integrity. In the face of almost impossibly difficult situations during the war and more recently, he has always maintained a steady course in the interest of the government and the people as a whole. As is true with people in this kind of position, he may have been unyielding to some people in the meat or livestock industry. Those of us who knew the problems, however, were grateful for his sturdy character in those situations.”

Geoffrey Baker also wrote two very nice letters to other important people: “When I was in Washington last week, I found that Arval Erikson had not yet arranged for a job upon the conclusion of his work at OPS. He has had to fight some bitter battles with those nice neat boys and it is possible that some echoes of those struggles may still be reverberating around the Department of Agriculture. I know that you think as highly of Arval as I do, and agree with me that he would be a tremendous help to any government agency dealing with agricultural economics, not only on meat, but on dairy, grain or other basic products.” In another letter: “Shortly after OPS started, I persuaded Arval Erikson to come in as Assistant Director of the Food and Restaurant Division instead of going over to Italy for FAO. He will be through at OPS shortly and, as you know, is a man who would make a fine contribution in a number of spots related to agricultural economics. Due to Arval’s association with meat, both at OPA and OPS, he has had to deal with some of the more reactionary factors in the food industry, and deserves great credit for his firm stand in the interest of fair selling prices.”