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time. Current practice, therefore, imposes the responsibility upon the German authorities to continue the enforcement of a consumer rationing program on a needs basis. In applying this criterion, the German Economic Offices are required to adhere to certain priorities in the issuance of purchase permits. In addition, the German Economic Offices are required to eliminate all features of the rationing system which discriminate against groups or individuals on the grounds of nationality, race, creed, color or political opinion, or which discriminate in favor of groups or individuals on the ground of service in the German war effort or of pro-Nazi activities or opinions.

Zonal control of rationing has been influenced not only by the extreme scarcity of consumer commodities but also, indirectly by a quadripartite policy which anticipated the problem of the “flight of goods" from one zone into another. Although Zonal Military Government Offices impose but very few restrictons or operational controls upon rationing, a list of critical items, which may not be removed from a zone unless approval is received from the respective Military Governments, has been agreed upon on a quadripartite level. Most of the items on this list are also subject to allocation and rationing by the German authorities.

Insofar as the future outlook is concerned, the system of rationing of consumer goods is not very likely to undergo major changes for some time to come, that is, not until production of consumer goods will reach a level where a "point" system can be effectively re-introduced. In these circumstances, uniform rationing throughout Germany can be achieved only for a very limited number of items, the supply of which is sufficient to provide each person with at least a minimum requirement according to the disease and unrest formula. Price Control and Rationing Inflation

After twelve months the German systems of rationing and price control are operating effectively; but both system are confronted with problems which are becoming increasingly more difficult to face. It is impossible to forecast whether controls, enforcement, directives and quadripartite agreements on policy can withstand the effects of the numerous adverse circumstances.

Though other measures are involved in inflation control, price control and rationing are recognized as two of the most effective instruments to combat inflation. The fight against it will be continued with a full realization by the German authorities as well as by Military Government authorities that uncontrolled inflation would jeopardize the plan to leave Germany with a minimum balanced economy after carrying out disarmament and reparations; such an inflation would increase Germany's dependence upon imported supplies of food and other essentials; and such an inflation would strike at the heart of Allied hopes for a democratic and peaceful Germany.

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DISTRICT LEVEL

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TOTAL OF 2 5 6 PRICE OFFICES

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