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Home Front Illicit Trade and Black Markets in World War II

In a graphic design image, an oversized large, white thumb presses down a ration stamp, crushing a fallen villain, who may be a black market merchant or an enemy.
“Stamp Out Black Markets With Your Ration Stamps: Pay No More Than Legal Prices.” United States Office of Price Administration, 1943.

Collection of Northwestern University Libraries. ark:/81985/n2qn61c8x

Introduction

Rationing was the process by which the government limited access to items and materials needed for the war effort during World War II. It also helped to control inflation. Items rationed included meat, shoes, metals (including cans), tires, gasoline, and heating fuel. Regardless of rationing and other limits on available goods during the war, some people figured out how to profit and get what they wanted.

The “black market” describes trade in goods and services illicitly, or outside of legal systems (i.e. “I bought this steak on the black market”). It can also describe those goods and services (i.e. “This is a black market steak”). The term first appeared in the 1930s and gained traction with World War II rationing.[1] Despite general public support for the war effort, many did not like the inconvenience of doing without.[2]

Black market trade during World War II included steel, tires, coffee, sugar, gasoline, butter, potatoes, processed foods, and meat. The press regularly identified meat as the largest problem. The Office of Price Administration (OPA) estimated that as much as 17% of the nation’s meat trade was via the black market.[3] The press called it “meatlegging,” conjuring Prohibition-era bootlegging in illicit alcohol.[4]

Black markets also made up significant portions of the trade in other rationed goods. For example, approximately 5% of gasoline (2,500,000 gallons per day) was traded through forged and stolen coupons alone.[5]

Black and white newspaper editorial cartoon of people shopping at a swastika-shaped counter.
“The real shape of the Black Market.” From the Daily Monitor Leader March 11, 1943, p. 7.

Daily Monitor Leader 1943 March 11, p. 7 (Chronicling America, Library of Congress).

Working Around the System

Illicit trade did not just happen at the grocery counter. Unscrupulous producers, suppliers, and consumers at all levels took part. Some were interested in lining their pockets; others didn’t see the problem if they bought on the black market “just this once.” Others were furious when they found out that Axis prisoners of war in the US were being fed rationed foods. Despite the fact that by international law, POWs had to be fed the same as the military of the country holding them, some felt no need to ration if it meant feeding the enemy.[6]

On the wholesale side, unscrupulous sellers took money above ceiling prices for their products. This was done by asking for more money outright; by accepting “gifts” after selling at ceiling prices or taking bribes. In Cleveland, a meat packer was offered a cash "bonus" of $75,000 (almost $1.3 million in 2023 dollars) if he would sell at ceiling prices.[7]

Meatleggers found another way around government controls by diverting livestock to black market slaughterhouses. One news story describes at least 800 head of cattle diverted from a single market on a single day.[8]

Not only were cattle diverted from regulated markets, but the makeshift slaughterhouses were not inspected for cleanliness or other food safety regulations. Nor were there systems to ensure that the livestock themselves were healthy and suitable for market. Epidemics of food poisoning and deaths were linked to black market beef.[9]

Black and white photo of a grocer’s meat case showing a cut of beef and sausages. The sign in front of the beef reads 55c per pound, 8(crossed out) 4 points. A white hand is gesturing at the meat as though selecting it.
If the ration points are cut, so must the prices be. Slashed points without slashed prices are one of the surest clues to black-market meats. Photo by Ann Rosener, Office of War Information, 1943.

Collection of the Library of Congress (https://lccn.loc.gov/2017851792).

On the retail side, buyers and sellers found several ways to work around the ration limits. At the meat counter, sellers would include cuts that were not under price control (like livers, hearts, and brains) in with price-controlled meat. They would then sell it at ceiling prices (without the knowledge of the buyer).

Sellers would also charge for more weight than was being sold, or cut the number of needed ration points without lowering prices.[10] Buyers wrote checks for the legal price and handed over the difference in cash, or sweet talked their way out of using ration coupons. It was not uncommon for buyers to "buy" lower-quality cuts of meat and take home better cuts for dinner.[11]

There were also illicit markets for ration coupons themselves. Legitimate coupons and counterfeits were bought, sold, and traded against the law. Agents arrested one man in Detroit for selling 400 gasoline ration coupons for $57.50 (just over $985 in 2023). Over half of the coupons were counterfeit.[12]

A well-dressed white woman in a hat, gloves, and with parcels under her arm reaches into her purse, and looks at the reader.
“Why shouldn’t I buy it? I’ve got the money!” Detail from an ad published by the War Advertising Council in Radio Craft March 1944, p. 357.

War Advertising Council, Radio Craft (magazine) March 1944, p. 357.

To counteract illicit trade in coupons, the OPA instructed sellers not to accept unendorsed or loose stamps. They were supposed to tear the stamps out of the ration books themselves.[13] Many looked the other way when consumers claimed their loose stamps had “fallen out” of their ration books – and surely some of them had! The ration books were made of cheap paper, and often fell apart.

There were several ration book forgery rings across the country, including ones run by organized crime. And there were targeted thefts of coupons from local ration boards, despite keeping them under lock and key. Thefts of restricted goods, including by siphoning gasoline, were not uncommon.[14] To curb the black markets, the government used several approaches.

Combating the Black Market

The biggest challenge to combating the black market was that many Americans were making lots of money working in war industries. These people had extra cash to spend to get what they wanted. A lot of what they wanted were things in short supply. And people were willing to pay more and more for them, driving inflation up for everyone.[15] The government spent a lot of resources trying to put a stop to the black market, from propaganda to enforcement and pulling cash out of the economy.

Poster with a graphic of profile of the lower half of a face with the mouth wide open. Dollar signs are flying into the mouth. Text within the outline of the face lists rationed goods, including irons, butter, nylons, meat, and electric toasters.
“Don’t Feed Black Market Greed: Pay No More Than Ceiling Prices.” Poster, Office of Price Administration, 1946.

Collection of the National Archives and Records Administration (NAID: 514140).

War-era posters put out by the government appealed to peoples’ better angels (“Don’t Feed Black Market Greed” - at left), their pride (“Sucker! If You Pay Over Ceiling Prices”), and their patriotism (“Spies, Saboteurs, “Meatleggers” & Hoarders: There isn’t any great difference. They’re all helping the enemy” - below).

Advertisements in women’s magazines and newspaper articles further discouraged people from participating.[16] One article written by the OPA argued that black markets helped the enemy, asserting that those who took part were guilty of “nothing short of treason.”[17]

The OPA led enforcement against the black market, often with the help of local, state, and other federal authorities. Consumers and other members of the public were encouraged to report violations, and people were hired to confirm the authenticity of coupons.[18]

There were definitely challenges. In New York, the state was unable to prosecute meat dealers who were taking bribes because no one would testify against them.[19] And there were just not that many OPA investigators – fewer than 3,000 were responsible for the whole country. They focused mainly on large-scale violations, not the “shabby little under-the-counter deals between butchers and their regular customers.”[20]

Despite the challenges, the OPA charged one in fifteen businesses with breaking the rationing and price laws during the war. These had penalties of up to a year in prison and a $5,000 fine.[21] The front page of the Washington, DC Evening Star for March 9, 1943 carried the article, “Black Market Meat Dealers Get Jail Terms.” Imposing jail terms of 6 months each and a total of $27,500 (about $480,000 in 2023) in fines on seven meat wholesalers, the judge said: “Black market operations must cease. The public will know from these sentences that unpatriotic profiteering at the expense of the war effort will not be tolerated.”[22] Other examples of punishment include: a man in California arrested for stealing 7 pairs of shoes sentenced to 6 months in jail or a $500 fine (about $8,500 in 2023); and a group of 10 people charged with counts up to grand larceny for stealing and selling black market tires.[23]

A graphic color poster showing a large steak sitting on a counter. Underneath, a white man’s hand with “BLACKMARKET” printed over it, reaches for a $5 bill being offered by a white woman’s hand.
“Sucker! If You Pay Over Ceiling Prices.” Poster, Office of Price Administration, 1946.

Collection of the National Archives and Records Administration (NAID: 515507).

Blue text printed over a red swastika.
“Spies, Saboteurs “Meatleggers” & Hoarders: There isn’t any great difference. They’re all Helping the ENEMY. Be On Guard – Help Fight – Right Here At Home.” Poster, War Production Board, ca. 1942-1943.

Collection of the National Archives and Records Administration (NAID: 535194).

The government also used the economy to try to limit the effects of the black markets. Although organized crime got most of the press, much of the problem, according to officials, was economic. “Extra money in people’s pockets during the wartime is dangerous money,” wrote Maxwell Stewart in 1944. Also in 1944, a newspaper ad from Mrs. Smith’s Pie Company screams, “Joe’s Got a Fistful of Dangerous Dollars.”[24] Because only those with extra money could afford black market goods (and to otherwise curb inflation), the government sold war bonds and raised taxes predominantly to pull cash out of circulation. Raising money to fund the war was not the primary reason. [25]

This article was written by Megan E. Springate, Assistant Research Professor, Department of Anthropology, University of Maryland, for the NPS Cultural Resources Office of Interpretation and Education. It was funded by the National Council on Public History’s cooperative agreement with the National Park Service.

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Last updated: November 16, 2023