PRICES: Hell for Leather

All of a sudden there was a crisis in shoes. The entire U.S. shoe industry seemed threatened with imminent shutdown. Several plants actually closed. Reason: now that OPA had returned from the grave, no hides and leather were going to market.

Until June 30, OPA had held the price of cattle hides to 15½¢ a Ib. When ceilings came off, U.S. hide prices raced to catch up with world prices, went as high as 27¢ before the old ceilings were clamped on again 25 days later. Despite OPA’s interim warning to buyers, 900,000 hides were bought in the hectic free market.

Tanners found themselves in a sorry fix. With leather prices (which had risen 4%) also back under ceilings, they could not process and resell their expensive hides at a profit. So they held them. But neither could they buy any more raw hides; foreign prices were too high and no hides were offered by domestic producers. Despite record slaughterings, packers were reluctant to sell at 15½¢.

The only thing the tanners could do was hotfoot it for Washington. There, joined by shoe manufacturers, they clamored for 1) complete decontrol of hides and leathers, or 2) hefty price increases.

They got neither. But federal agencies, after a White House conference on the crisis, gave them plenty of action. The Department of Justice was asked to determine whether an industry-wide conspiracy had been formed to force OPA’s hand; the Civilian Production Administration sent investigators out to check hide and leather inventories of slaughterers and tanners (only working minimums are permissible).

In short order, hides began to move. Within three days, offerings were 75% of normal. Then OPA granted a small (6%) price increase to certain segments of the industry (leather wholesalers, dealers, jobbers) which had not benefited by a similar increase given tanners in March. Leather, too, began to move. Shoe plants planned normal operations. Said an OPA official at week’s end: “We think the problem is licked—at least temporarily.”