Binghamton University Economics Essay

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Write a paper after watching two movies and two reading. The papers should discuss the relevant economic content of the films, preferably as they relate to the readings and class discussion. They should not be critical reviews of the films themselves. Papers should be uploaded in Brightspace. They should be double-spaced and use twelve-point type. You may choose your own font. Papers should be between 500 and 1000 words long. Spelling and grammar count. References should follow Chicago style. Late papers will not be accepted. “A” papers are those that are well-written, discuss the topic cogently, and add something to what one can know from simply reading the assigned paper, and watching the film. That is, they need to tell me something new and interesting. Please know that I check Wikipedia and the reviews of the movies you watch. Thus, if you use these resources, you must quote them.reading is the pdf that i posted.

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The Suntory and Toyota International Centres for Economics and Related Disciplines
The Economic Organisation of a P.O.W. Camp
Author(s): R. A. Radford
Source: Economica, New Series, Vol. 12, No. 48 (Nov., 1945), pp. 189-201
Published by: Wiley on behalf of The London School of Economics and Political Science and
The Suntory and Toyota International Centres for Economics and Related Disciplines
Stable URL: https://www.jstor.org/stable/2550133
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1945j
The Economic Organisation of
a P.O.W. Camp
By R. A. RADFORD
INTRODUCTION
AFTER allowance has been made for abnormal circumstances, the
social institutions, ideas and habits of groups in the outside world are
to be found reflected in a Prisoner of War Camp. It is an unusual but
a vital society. Camp organisation and politics are matters of real
concern to the inmates, as affecting their present and perhaps their
future existences. Nor does this indicate any loss of proportion.
No one pretends that camp matters are of any but local importance
or of more than transient interest, but their importance there is great.
They bulk large in a world of narrow horizons and it is suggested that
any distortion of values lies rather in the minimisation than in the
exaggeration of their importance. Human affairs are essentially
practical matters and the measure of immediate effect on the lives of
those directly concerned in them is to a large extent the criterion of
their importance at that time and place. A prisoner can hold strong
views on such subjects as whether or not all tinned meats shall be
issued to individuals cold or be centrally cooked, without losing sight
of the significance of the Atlantic Charter.
One aspect of social organisation is to be found in economic activity,
and this, along with other manifestations of a group existence, is to be
found in any P.O.W. camp. True, a prisoner is not dependent on his
exertions for the provision of the necessaries, or even the luxuries of
life, but through his economic activity, the exchange of goods and
services, his standard of material comfort is considerably enhanced.
And this is a serious matter to the prisoner: he is not ” playing at
shops ” even though the small scale of the transactions and the simple
expression of comfort and wants in terms of cigarettes and jam, razor
blades and writing paper, make the urgency of those needs difficult to
appreciate, even by an ex-prisoner of some three months’ standing.
Nevertheless, it cannot be too strongly emphasised that economic
activities do not bulk so large in prison society as they do in the larger
world. There can be little production; as has been said the prisoner
is independent of his exertions for the provision of the necessities and
luxuries of life; the emphasis lies in exchange and the media of
exchange. A prison camp is not to be compared with the seething
crowd of higglers in a street market, any more than it is to be compared with the economic inertia of a family dinner table.
Naturally then, entertainment, academic and literary interests,
games and discussions of the ” other world ” bulk larger in everyday
Life than they do in the life of more normal societies. But it would be
189
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I90
ECONOMICA
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wrong to underestimate the importance of economic activity. Everyone receives a roughly equal share of essentials; it is by trade that
individual preferences are given expression and comfort increased.
All at some time, and most people regularly, make exchanges of one
sort or another.
Although a P.O.W. camp provides a living example of a simple
economy which might be used as an alternative to the Robinson
Crusoe economy beloved by the text-books, and its simplicity renders
the demonstration of certain economic hypotheses both amusing and
instructive, it is suggested that the principal significance is sociological.
True, there is interest in observing the growth of economic institutions
and customs in a brand new society, small and simple enough to prevent detail from obscuring the basic pattern and disequilibrium from
obscuring the working of the system. But the essential interest lies
in -the universality and the spontaneity of this economic life; it came
into existence not by conscious imitation but as a response to the
immediate needs and circumstances. Any similarity between prison
organisation and outside organisation arises from similar stimuli evoking
similar responses.
The following is as brief an account of the essential data as may
render the narrative intelligible. The camps of which the writer had
experience were Oflags and consequently the economy was not complicated by payments for work by the detaining power. They consisted
normally of between I,200 and 2,500 people, housed in a number of
separate but intercommunicating bungalows, one company of 2oo
or so to a building. Each company formed a group within the main
organisation and inside the company the room and the messing
syndicate, a voluntary and spontaneous group who fed together, formed
the constituent units.
Between individuals there was active trading in all consumer goods
and in some services. Most trading was for food against cigarettes or
other foodstuffs, but cigarettes rose from the status of a normal commodity to that of currency. RMk.s existed but had no circulation
save for gambling debts, as few articles could be purchased with them
from the canteen.
Our supplies consisted of rations provided by the detaining power
and (principally) the contents of Red Cross food parcels-tinned milk,
jam, butter, biscuits, bully, chocolate, sugar, etc., and cigarettes.
So far the supplies to each person were equal and regular. Private
parcels of clothing, toilet requisites and cigarettes were also received,
and here equality ceased owing to the different numbers despatched
and the vagaries of the post. All these articles were the subject of
trade and exchange.
THE DEVELOPMENT AND ORGANISATION OF THE MARKET
Very soon after capture people realised that it was both undesirable
and unnecessary, in view of the limited size and the equality of supplies,
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1945] THE ECONOMIC ORGANISATION OF A P.O.W. CAMP I9I
to give away or to accept gifts of cigarettes or food. ” Goodwill”
developed into trading as a more equitable means of maximising
indi vdual satisfaction.
We reached a transit camp in Italy about a fortnight after capture
and recei’ved i of a Red Cross food parcel each a week later. At
.once exchanges, already established, multiplied in volume. Starting
with simple direct barter, such as a non-smoker giving a smoker friend
his cigarette issue in exchange for a chocolate ration, more complex
exchanges soon became an accepted custom. Stories circulated of a
padre who started off round the camp with a tin of cheese and, five
cigarettes and returned to his bed with a complete parcel in addition
to his original cheese and cigarettes; the market was not yet perfect.
Within a week or two, as the volume of trade grew, rough scales of
exchange values came into existence. Sikhs, who had at first
exchanged tinned beef for practically any other foodstuff, began to
insist on jam and margarine. It was realised that a tin of jam was
worth I lb. of margarine plus something else; that a cigarette issue
was worth several chocolate issues. and a tin of diced carrots was
worth practically nothing.
In this camp we did not visit other bungalows very much and
prices varied from place to place; hence the germ of truth in the story
of the itinerant priest. By the end of a month, when we reached our
permanent camp, there was a lively trade in all commodities and their
relative values were well known, and expressed not in terms of one
another-one didn’t quote bully in terms of sugar-but in terms of
cigarettes. The cigarette became the standard of value. In the
permanent camp people started by wandering through the bungalows
calling their offers-” cheese for seven ” (cigarettes)-and the hours
after parcel issue were Bedlam. The inconveniences of this system
soon led to its replacement by an Exchange and Mart notice board in
every bungalow, where under the headings ” name “, ” room number “,
” wanted ” and ” offered ” sales and wants were advertised. When
a deal went through, it was crossed off the board. The public and semi-
permanent records of transactions led to cigarette prices being well
known and thus tending to equality throughout the camp, although
there were always opportunities for an astute trader to make a profit
from arbitrage. With this development everyone, including nonsmokers, was willing to sell for cigarettes, using them to buy at another
time and place. Cigarettes became the normal currency, though, of
course, barter was never extinguished.
The unity of the market and the prevalence of a single price varied
directly with the general level of organisation and comfort in the camp.
A transit camp was always chaotic and uncomfortable: people were
overcrowded, no one knew where anyone else was living, and few
took the trouble to find out. Organisation was too slender to include
an Exchange and Mart board, and private advertisements were the
most that appeared. Consequently a transit camp was not one
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192
ECONOMICA
[NOVEMBER
market but many. The price of a tin of salmon is known to have
varied by two cigarettes in zo between one end of a hut -and the
other. Despite a high level of organisation in Italy, tht market was
morcellated in this manner at the first transit camp we reached after
our removal to Germany in. the autumn of 1943. In this campStalag VIIA at Moosburg in.Bavaria-there were up to 50,000 prsoners
of all nationalities. French, Russians, Italians and Jugo-Slavs were
free to move about within the camp: British and. Americans were
confined to their compounds, although a few cigarettes given to a
sentry would always procure permission for one or two men to visit
other compounds. The people who first visited the highly
organised French trading centre, with its stalls and known prices,
found coffee extract-relatively cheap among the tea-drinking
English-commanding a fancy price in biscuits or cigarettes, and some.
enterprising people made small fortunes that way. (Incidentally we
found out later that much of the coffee went ” over the wire ” and
sold for phenomenal prices at black market caf6s in Munich: some
of the French prisoners were said to have made substantial sums in
RMk.s. This was one of the few occasions on which our normally
closed economy came into contact with other economic worlds.)
Eventually public opinion grew hostile to these monopoly profitsnot everyone could make contact with the Ftench-and trading w’ith
them was put on a regulated basis. Each group of beds was given a
quota of articles to offer and, the transaction was carried out by
accredited representatives from the British compound, with monopoly
rights. The same method was used for trading with sentries elsewhere,
as in this trade secrecy and reasonable prices had a peculiar importance,
but as is ever the case with regulated companies, the interloper proved
too strong.
The permanent camps in Germany saw the highest level of coiImercial organisation. In addition to the Exchange and Mart notice.
boards, a shop was organised as a public utility, controlled by representatives of the Senior British Officer, on a no profit basis. People
left their surplus clothing, toilet requisites and food there until they
were sold at a fixed price in cigarettes.. Only sales in cigarettes were
accepted-there was no barter- and there was no higgling. For
food at least there were standard prices: clothing is less homogeneous
and the price was decided around a norm by the seller and the shop
manager in agreement; shirts would average say 8o, ranging from
6o to 120 according to quality and age. Of food, the shop carried
small stocks for convenience; the capital was provided by a loan from
the bulk store of Red Cross cigarettes and repaid by a small commission
taken on the first transactions. Thus the cigarette attained its
fullest currency status, and the market was almost completely
unified.
It is thus to be seen that a market came into existence without labour
or production. The B.R.C.S. may be considered as ” Nature ” of the
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1945] THE ECONOMIC ORGANISATION OF A P.O.W. CAMP 193
text-book, and the articles of trade-food, clothing and cigarettesas free gifts-,land or manna. Despite this, and despite a roughly equal
distribution of resources, a market came into spontaneous operation,
-and prices were fixed by the operation of supply and demand. It
is difficult to reconcile this fact with the labour theory of
value.
Actually there was ail embryo labour market. Even when cigarettes
were not scarce, there was usually some unlucky person willing to per-
form services for them. Laundrymen advertised at two cigarettes a
garment. Battle-dress was scrubbed and pressed and a pair of
trousers lent for the interim period for twelve. A good pastel portrait
cost thirty or a tin of ” Kam “. Odd tailoring and other jobs similarly
had their prices.
There were also entrepreneurial services. There was a coffee stall
owner who sold tea, coffee or cocoa at two cigarettes a cup, buying his
raw materials at market prices and hiring labotir to gather fuel and to
stoke; he actually enjoyed the services of a chartered accountant at
one stage. After a period of great prosperity he overreached himself and failed disastrously for several hundred cigarettes. Such largescale private enterprise was rare but several middlemen or professional
traders existed. The padre in Italy, or the men at Moosburg who
opened trading relations with the French, are examples: the more
subdivided the market, the less perfect the advertisement of prices,
and the less stable the prices, the greater was the scope for these
operators. One man capitalised his knowledge of Urdu by buying
meat from the Sikhs and selling butter and jam in return: as his
operations became better known more and more people entered this
trade, prices in the Indian Wing approximated more nearly to those
elsewhere, though to the end a ” contact ” among the Indians was
valuable, as linguistic difficulties prevented the trade from being quite
free. Some were specialists in the Indian trade, the food, clothing or
even the watch trade. Middlemen traded on their own account or on
commission. Price rings and agreements were suspected and the traders
certainly co-operated. Nor did they welcome newcomers. Unfortunately the writer knows little of the workings of these people: public
opinion was hostile and the professionals were usually of a retiring
disposition.
One trader in food and cigarettes, operating in a period of dearth,
enjoyed a high reputation. His capital, carefully saved, was originally
about 50 cigarettes, with which he bought rations on issue days and
held them until the price rose just before the next issue. He also
picked up a little by arbitrage; several times a day he visited every
Exchange or Mart notice board and took advantage of every discrepancy between prices of goods offered and wanted. His knowledge
of prices, markets and names of those who had received cigarette parcels
was phenomenal. By these means he kept himself smoking steadilylis proits-while his capital remained intact.
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194 ECONOMICA [NOVEMBER
Sugar was issued on Saturday. about Tuesday two of us used to
visit Sam and make a deal; as old customers he would advance as
much of the price as he could spare then, and entered the transaction
in a book. On Saturday morning he left cocoa tins on our beds for the
ration, and picked them up on Saturday afternoon. We were hoping
for a calendar at Christmas, but Sam failed too. He was left holding
a big black treacle issue when the price fell, and in this weakened
state was unable to withstand an unexpected arrival of parcels and the
consequent price fluctuations. He paid in full, but from his capital.
The next Tuesday, when I paid my usual visit he was out of business.
Credit entered into many, perhaps into most, transactions, in one
form or another. Sam paid in advance as a rule for his purchases of
future deliveries of sugar, but many buyers asked for credit, whether
the commodity was sold spot or future. Naturally prices varied
according to the terms of sale. A treacle ration might be advertised
for four cigarettes now or five next week. And in the future market
“bread now ” was a vastly different thing from ” bread Thursday ”
Bread was issued on Thursday and Monday, four and three days’
rations respectively, and by Wednesday and Sunday night it had
risen at least one cigarette per ration, from seven to eight, by supper
time. One man always saved a ration to sell then at the peak price:
his offer of ” bread now ” stood out on the board among a number of
” bread Monday’s ” fetching one or two less, or not selling at alland he always smoked on Sunday night.
THE CIGARETTE CURRENCY
Although cigarettes as currency exhibited certain peculiarities, they
performed all the functions of a metallic currency as a unit of account,
as a measure of value and as a store of value, and shared most of its
characteristics. They were homogeneous, reasonably durable, and of
convenient size for the smallest or, in packets, for the largest trans-
actions. Incidentally, they could be clipped or sweated by rolling
.them between the fingers so that tobacco fell out.
Cigarettes were also subject to the working of Gresham’s Law.
Certain brands were more popular than others as smokes, but for
currency purposes a cigarette was a cigarette. Consequently buyers
used the poorer qualities and the Shop rarely saw the more popular
brands: cigarettes such as Churchman’s No. I were rarely used
for trading. At one time cigarettes hand-rolled from pipe tobaccc
began to circulate. Pipe tobacco was issued in lieu of cigarettes by
the Red Cross at a rate of 25 cigarettes to the ounce and this rate was
standard in exchanges, but an ounce would produce 30 home-made
cigarettes. Naturally, people with machine.,made cigarettes broke
them down and re-rolled the tobacco, and the real cigarette virtually
disappeared from the market. Hand-rolled cigarettes were not
homogeneous and prices could no longer be quoted in them with
safety: each cigarette was examined before it was accepted and thi
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1945] THE ECONOMIC ORGANISATION OF A P.O.W. CAMP 195
ones were rejected, or extra demanded as a make-weight. For a time
we suffered all the inconveniences of a debased currency.
Machine-made cigare-ttes were always universally acceptable, both
for what they would buy and for themselves. It was this intrinsic
value which gave rise to their principal disadvantage as currency, a disadvantage which exists, but to a far smaller extent, in the case of metallic currency ;-that is, a strong demand for non-monetary purposes.
Consequently our economy was repeatedly subject to deflation and to
periods of monetary stringency. While the Red Cross issue of 50 or
25 cigarettes per man per week came in regularly, and while there were
fair stocks held, the cigarette currency suited its purpose admirably.
But when the issue was interrupted, stocks soon ran out, prices fell,
trading declined in volume and became increasingly a matter of
barter. This deflationary tendency was periodically offset by the
sudden injection of new currency. Private cigarette parcels arrived in
a trickle throughout the year, but the big numbers came in quarterly
when the Red Cross received its allocation of transport. Several
hundred thousand cigarettes might arrive in the space of a fortnight.
Prices soared, and then began to fall, slowly at first but with increasing
rapidity as stocks ran out, until the next big delivery. Most of our
economic troubles could be attributed to this fundamental instability.
PRICE MOVEMENTS
Many factors affected prices, the strongest and most noticeable
being the periodical currency inflation and deflation described in the
last paragraphs. The periodicity of this price cycle depended on
cigarette and, to a far lesser extent, on food deliveries. At one time
in the early days, before any private parcels had arrived and when
there were no individual stocks, the weekly issue of cigarettes and
food parcels occurred on a Monday. The non-monetary demand for
cigarettes was great, and less elastic than the demand for food: consequently prices fluctuated weekly, falling towards Sunday night and
rising sharply on Monday morning. Later, when many people held
reserves, the weekly issue had no such effect, being too small a propQrtion of the total available. Credit allowed people with no reserves
to meet their non-monetary demand over the week-end.
The general price level was affected by other factors. An influx of
new prisoners, proverbially hungry, raised it. Heavy air raids in the
vicinity of the camp probably increased the non-monetary demand for
cigarettes and accentuated deflation. Good and bad war news certainly
had its effect, and the general waves of optimism and pessimism which
swept the camp were reflected in prices. Before breakfast one morning
in March of this year, a rumour of the arrival of parcels and cigarettes
was circulated. Within ten minutes I sold a treacle ration, for four
cigarettes (hitherto offered in vain for three), and many similar deals
went- through. By IO o’clock the rumour was denied, and treacle that
day found no more buyers even at two cigarettes.
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I96
ECONOMICA
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More interesting than changes in the general price level were changes
in the price structure. Changes in the supply of a commodity, in the
German ration scale or in the make-up of Red Cross parcels, would
raise the price of one commodity relative to others. Tins of oatmeal,
once a rare and much sought after luxury in the parcels, became a
commonplace in 1943, and the price fell. In hot weather the demand
for cocoa fell, and that for soap rose. A new recipe would be reflected
in the price level: the discovery that raisins and sugar could be
turned into an alcoholic liquor of remarkable potency reacted permanently on the dried fruit market. The invention of electric immer-
sion heaters run off the power points made tea, a drug on the market in
Italy, a certain seller in Germany.
In August, I944, the supplies of parcels and cigarettes were both
halved. Since both sides of the equation were changed in the same
degree, changes in prices were not anticipated. But this was not the
case: the non-monetary demand for cigarettes was less elastic than the
demand for food, and food prices fell a little. More important however
were the changes in the price structure. German margarine and jam,
hitherto valueless owing to adequate supplies of Canadian butter and
marmalade, acquired a new value. Chocolate, popular and a certain
seller, and sugar, fell. Bread rose; several standing contracts of
bread for cigarettes were broken, especially when the bread ration was
reduced a few weeks later.
In February, 1945, the German soldier who drove the ration waggon
was found to be willing to exchange loaves of bread at the rate of one
loaf for a bar of chocolate. Those in the know began selling bread and
buying chocolate, by then almost unsaleable in a period of serious
deflation. Bread, at about 40, fell slightly; chocolate rose from IS;
the supply of bread was not enough for the two commodities to reach
parity, but the tendency was unmistakable.
The substitution of German margarine for Canadian butter when
parcels were halved naturally affected their relative values, margarine
appreciating at the expense of butter. Similarly, two brands of
dried milk, hitherto differing in quality and therefore in price by five
cigarettes a tin, came together in price as the wider substitution of the
cheaper raised its relative value.
Enough has been cited to show that any change in conditions affected
both the general price level and the price structure. It was this latter
phenomenon which wrecked our planned economy.
PAPER CURRENCY-Bully Marks
Around D-Day, food and cigarettes were plentiful, business was
brisk and the camp in an optimistic mood. Consequently the Entertainments Committee felt the moment opportune to launch a restaurant,
where food and hot drinks were sold while a band and variety turns
performed. Earlier experiments, both public and private, had pointed
the way, and the scheme was a great success, Food was bought at
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1945] THE ECONOMIC ORGANISATION OF A P.O.W. CAMP 197
market prices to provide the meals and the small profits were devoted
to a reserve fund and used to bribe Germans to provide grease-paints
and other necessities for the camp theatre. Originally meals were
sold for cigarettes but this meant that the whole scheme was vulnerable
to the periodic deflationary waves, and furthermore heavy smokers
were unlikely to attend much. The whole success of the scheme
depended on an adequate amount of food being offered for sale in the
normal manner.
To increase and facilitate trade, and to stimulate supplies and
customers therefore, and secondarily to avoid the worst effects of deflation when it should come, a paper currency was organised by the
Restaurant and the Shop. The Shop bought food on behalf of the
Restaurant with paper notes and the paper was accepted equally with
the cigarettes in the Restaurant or Shop, and passed back to the
Shop to purchase more food. The Shop acted as a bank of issue.
The paper money was backed IOO per cent. by food; hence its name,
the Bully Mark. The BMk. was backed iOO per cent. by food: there
could be no over-issues, as is permissible with a normal bank of issue,
since the eventual dispersal of the camp and consequent redemption
of all BMk.s was anticipated in the near future.
Originally one BMk. was worth one cigarette and for a short time
both circulated f-reely inside and outside the Restaurant. Prices
were quoted in BMk.s and cigarettes with equal freedom-and for a
short time the BMk. showed signs of replacing the cigarette as
currency. The BMk. was tied to food, but not to cigarettes: as it was
issued against food, say 45 for a tin of milk and so on, any reduction
in the BMk. prices of food would have meant that there were unbacked BMk.s in circulation. But the price of both food and BMk.s
could and did fluctuate with the supply of cigarettes.
While the Restaurant flourished, the scheme was a success: the
Restaurant bought heavily, all foods were saleable and prices were
stable.
In August parcels and cigarettes were halved and the Camp was
bombed. The Restaurant closed for a short while and sales of food
became difficult. Even when the Restaurant reopened, the food and
cigarette shortage became increasingly acute and people were unwilling
to convert such valuable goods into paper and to hold them for luxuries
like snacks and tea. Less of the right kinds of food for the Restaurant
were sold, and the Shop became’ glutted with dried fruit, chocolate,
sugar, etc., which the Restaurant could not buy. The price level and
the price structure changed. The BMk. fell to four-fifths of a cigarette
and eventually farther still, and it became unacceptable save in the
Restaurant. There was a flight from the BMk., no longer convertible
into cigarettes or popular foods. The cigarette re-established itself.
But the BMk. was sound! The Restaurant closed in the New Year
with a progressive food shortage and the long evenings without lights
due to intensified Allied air raids, and BMk,s could only be spent in
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198
ECONOMICA
[NOVEMBER
the Coffee Bar-relict of the Restaurant-or on the few unpopular
foods in the Shop, the owners of which were prepared to accept them.
In the end all holders of BMk.s were paid in full, in cups of coffee o
in prunes. People who had bought BMk.s for cigarettes or valuable
jam or biscuits in their heyday were aggrieved that they should have
stood the loss involved by their restricted choice, but they suffered no
actual loss of market value.
PRICE FIXING
Along with this scheme came a determined attempt at a planned
economy, at price fixing. The Medical Officer had long been anxious
to control food sales, for fear of some people selling too much, to the
detriment of their health. The deflationary waves and their effects on
prices were inconvenient to all and would be dangerous to the
Restaurant which had to carry stocks. Furthermore, unless the
BMk. was convertible into cigarettes at about par it had little chance
of gaining confidence and of succeeding as a currency. As has been
explained, the BMk. was tied to food but could not be tied to cigarettes,
which fluctuated in value. Hence, while BMk. prices of food were
fixed for all time, cigarette prices of food and BMk.s varied.
The Shop, backed by the Senior British Officer, was now in a position
to enforce price control both inside and outside its walls. Hitherto
a standard price had been fixed for food left for sale in the shop, and
prices outside were roughly in conformity with this scale, which wat
recommended as a ” guide “‘to sellers, but fluctuated a good deal around
it. Sales in the Shop at recommended prices were apt to be slow
though a good price might be obtained: sales outside could be made
more quickly at lower prices. (If sales outside were to be at higher
prices, goods were withdrawn from the Shop until the recommended
price rose: but the recommended price was sluggish and could not
follow the market closely by reason of its very purpose, which was
stability.) The Exchange and Mart notice boards came under the
control of the Shop: advertisements which exceeded a 5 per cent.
departure from the recommended scale were liable to be crossed out by
authority: unauthorised sales were dis