Shave & Haircut, Oh Boy

In Greenwich, Conn. (pop. 38,000), barbers posted a new price scale: shave and a haircut, two bucks. And rising costs wiped out another price landmark. In Philadelphia, the Coca-Cola Bottling Co. upped its prices by 15¢ a case, thus forcing retailers to charge 6¢ for a bottle of Coke.

As other prices continued to edge up, Iowa’s white-haired Democratic Senator Guy Gillette and his Agriculture subcommittee decided to investigate. It called leading U.S. packers and retailers to Washington last week to find out why the price of sirloin steak in July had risen from 88¢ a Ib. to $1.10, then dropped to 98¢, then bounded up close to $1.10 again. During all this time, the price of beef on the hoof was virtually unchanged. The explanation, as everyone expected, was simple. The packers and retailers had jacked up prices when the Korean war touched off a burst of buying, then cut them when housewives balked at the increase. Explained Swift & Co. Vice President Paul C. Smith: “In the meat business you have to take advantage of any increased demand by the raising of your price.”

Most packers thought that meat prices would dip a bit this fall, when big quantities of beef and hogs start moving to market. Meat production is expected to increase 20% over this quarter in the heaviest cattle slaughter since 1944, and consumers should benefit by the big supplies on hand.

Nevertheless, prices will probably still be higher than last year, because the U.S. is eating meat at a belt-bursting clip. The American Meat Institute estimated that U.S. meat consumption will hit an annual rate of 160 Ibs. per capita in the last quarter of 1950 v. 144 Ibs. for all of last year.

Since meat already takes up some 24% of the U.S. housewife’s food budget, packers worried that further price rises might tempt Congress to revive price controls.

Other industries were equally jittery last week. Charles A. Cannon, president of the huge Cannon Mills, biggest U.S. towel-maker, called for voluntary price ceilings on cotton goods. This year’s short cotton crop (an estimated 38% below 1949) has boosted raw cotton futures to 40.25¢ a Ib., highest in 30 years. Cannon feared that if cotton cloth prices followed suit, consumers would demand Government controls.