On 26 July 1946, Congress passed legislation reinstating the Office of Price Administration (OPA) and price controls.

The office was created under the Federal Office of Emergency Management by a decree of President Franklin D. Roosevelt on 28 August 1941. It became an independent agency under the Emergency Price Control Act of 30 January 1942, enacted in response to the war. OPA was empowered to limit prices and ration supplies on cars, shoes, nylon, sugar, petrol, fuel oil, coffee, meat, and manufactured goods. At its peak, almost 90 percent of retail food prices were frozen.

In 1946, commodity producers and retailers engaged in active lobbying against the OPA and the latter was shut down at the end of June. This resulted in a price hike: in less than a month, food prices went up by 14 percent and the cost of living as a whole by 6 percent, which was equivalent to more than 100 percent a year. Public discontent forced Congress to revive the Office of Price Administration.

Yet, under market conditions, direct regulation could not last long. Meat producers would be forced to reduce butchering and production, a shortage would ensue; and between higher prices and no products at all, Americans would choose higher prices. Consumer discontent would cause a major change in the political situation; the Democratic Party would cede control of Congress to the Republicans. On 29 May 1947, the Office of Price Administration would be abolished and price regulation would be subject to market laws. These events, as well as the Office itself, were reflected in Rex Stout's novel “The Silent Speaker”.

Source:

John Kenneth Galbraith, “A Theory of Price Control”, Cambridge, Massachusetts: Harvard University Press, 1952