This episode is from the WNYC archives. It may contain language which is no longer politically or socially appropriate.
Blackmarketing. Ceiling prices on meats. Retail taxes.
Hand-written note: Library has sides 1 and 3 only.
Audio courtesy of the NYC Municipal Archives WNYC Collection
WNYC archives id: 71134
Municipal archives id: LT4024
The original text of the WNYC radio broadcasts are the property of the New York City Department of Records/Municipal Archives. This digital edition is made available for research purposes only. The text may not be duplicated or reproduced without the written permission of the New York City Department of Records/Municipal Archives 31 Chambers Street New York, NY 10007
For Immediate Release: Sunday. March 21, 1943
CITY OF NEW YORK OFFICE OF THE MAYOR
TEXT OF MAYOR F. H. LA GUARDIA'S WEEKLY SUNDAY BROADCAST TO THE PEOPLE OF THE CITY OF NEW YORK MADE FROM HIS HOME, MARCH 21, 1943, OVER WNYC AT 1:00 p.m. FOLLOWS:-
Patience and Fortitude:
Our troubles are just starting, but are nothing that we will not be able to overcome. We're in this war to win and we're going to win and win as soon as we possibly can by all the people of the country giving support to their government and support to the armed forces fighting and dying for us.
The food situation is anything but satisfactory and yet not exactly hopeless. It is to be expected that in the initial period of rationing and real, actual price ceilings there is bound to be dislocation of supplies and we will be confronted with shortages of many commodities. This period is very crucial and of the utmost importance to all government agencies.
It is my determination to move speedily and vigorously right now, in the beginning, against every sort of black marketing within the limits of the power of the City Government. I also intend to publicize, prosecute and expose, wherever possible, every instance of profiteering. It is my belief that if we curb every attempt in the beginning it will not be long before New York City will be bad medicine and unwelcome territory for black marketeers, rashogs, profiteers and chisellers. On the other hand, if we wink at profiteering or submit to it or are lax in curbing black markets, we will soon be at the mercy of complete black marketing and prices will become prohibitive and all regular, legitimate channels of distribution disrupted. We must not permit that.
We gained a great deal of experience the last two weeks in supervising wholesale and retail channels of food distribution and I was able to provide Washington with helpful and valuable information. Unless ceiling prices are enforced is will just become impossible for the majority of the families in this City to get sufficient food. I intend to enforce all regulations and price ceilings regardless of the opposition, open and some subtly disclosed, by profiteers, chisellers and their confederates and associates, I want you all to know that the City Government is cooperating very closely with the local OPA and that we shall proceed together in exchanging information and also in prosecution of violations.
It is my hope that within a month United States will have completed and will have under control all of the supply of meat. It will then be possible to detect and destroy the black market from the slaughterhouse right to New York City's retail butcher stores. From our last roundup of meat we have been keeping a constant close watch, as I stated last week. No claim is made with any degree of accuracy that all of the stamped meat is genuine and lawful. After a conference with the Animal Industry Bureau of the United States Department of Agriculture in Washington, last Tuesday, I believe this condition will be brought under control.
Before very long the United States Department of Agriculture will have established and completed a system of permits covering every slaughterhouse in the country where animals may be lawfully slaughtered and sold. Any meat coming from any other source will be black market meat. We are now working on a system of information and identification from the licensed slaughterhouse right to the city butcher shop.
DEPT. OF HEALTH MEAT INSPECTORS
It is my intention, if necessary, to send inspectors of the Health Department of the City to distant points to supervise the City's meat supply to us just as we now do with milk. We will have constant supervision so that we will know at all times that the meat comes from an authorized, licensed slaughterhouse having a permit from the United States Department of Agriculture. That slaughterhouse will then have to sell at ceiling prices to the wholesaler, the wholesaler will have to sell at ceiling prices to the retailer and the retailer will have to sell at the ceiling price to the consumer. That is why it's so important to have this supervision and control.
CEILING PRICES ON BEEF
Uniform ceiling prices for beef will be announced, I hope, by the OPA in a very few days. I was promised that when I was in Washington this week. As soon as they are announced the City will require these ceiling prices to be conspicuously posted in every butcher shop. The City will continue to cooperate with the retailers and will expect their full and complete cooperation in turn in order to avoid overcharge to them by wholesalers and packers. And the City will also expect no overcharge from the retailers but will expect them to sell to the consumers at ceiling prices. With uniform ceiling price on beef there is no reason why consumers in this City cannot buy their beef at legitimate ceiling prices.
We will expect full and complete compliance with ceiling prices now fixed for pork as already announced effective April 1st. The ceiling prices in New York City are as follows: Loin pork, 39 cents a pound to the consumer. The wholesaler's price to the retailer is 27 cents. Sliced bacon derinded, now mark you, that means without the rind, so don't let the butcher weigh the rind with your bacon, grade A, 43 cents a pound, the wholesale price to the retailer is 35 cents. Smoked ham, bone in, or with the bone, 39 cents; the wholesale price to the retailer is 27 cents. Ham, boneless and fatted, 58 cents, consumer prices; price by the wholesaler to the retailer is 45 cents.
I took up the question of poultry in Washington and I hope something will be done. It will take a little time to get more uniform enforcement of ceiling prices. The minute we get that we will have our supply in New York City. You see, the trouble is that where there is no enforcement the supply is shipped and sold at exorbitant price. If we permitted that to be done, the whole regulations and price ceilings of the government would be destroyed and we would be at the mercy of profiteers. But, I am hopeful that that will be gotten under control - it will take a little time.
I appeal to all consumers, as well as to the retailers, to keep the REPORT Department of Markets informed or my office at City Hall wherever there VIOLATIONS is any overcharge. That is the only way we will be able to expose the culprits, violators of the law, enemies of our people, chisellers and profiteers, whether wholesalers or retailers. There is just not a chance for a black market in New York City if we all cooperate. Uniform ceiling prices on veal and lamb will follow after the beef prices have been announced by the Administrator but that will take a little longer time.
EVIL TRADE PRACTICES IN MEAT
Just one more word of warning, and this is the last warning on certain trade practices that have crept into the meat distribution in sources that are otherwise reputable and honest. These practices have grown to such proportions that they reflect in increased prices to the retailer and therefore increased prices to the consumer in buying meat. These bad practices have increased to such an extent that I do not believe that they can hardly be unknown to these large wholesalers. The City has been very patient. These bad practices must stop and stop at once, We have now sufficient facts to prove a condition and I shall expect the full and complete cooperation of the large packers in this respect. No more warnings, I expect action now.
The supply of milk was abundant the last week and the department of Agriculture is now holding hearings concerning diversion payments to processors. The decision on these diversion payments should not affect the retail price of milk I was informed by the Department of Agriculture in Washington. The increased labor costs in the plants also should not affect the retail price of milk in the stores. Again, consumers using milk are warned to shop for milk, as you'd shop for anything else and to buy milk in the manner most economical in the particular section of the City in which you happen to reside. All milk in New York City is inspected and uniform in quality.
RATIONED FOODS - HOARDING
On rationed food, again I must warn all consumers to market prudently and according to normal, current needs. Hoarding or buying undue quantities disturbs normal market conditions and makes it all the harder for everyone else. It is always likely to jump prices artificially where there is no ceiling.
Recently, injudicious advertisers have caused a rush in the buying of cheese. If anyone has been led by such advertisements into buying too much cheese, I advise that the purchase should be taken back to the store and a refund obtained. Reputable stores will do that.
BUTTER AND EGGS
Watch your ceiling prices on butter and eggs. Where there is violation either on butter or eggs or anything else, report it on the same day to the Department of Markets and, if possible, arrange with the Department of Markets to accompany the inspector right to the store where the violation takes place.
Also, continue to look out for substitutes. Report all substitutes to the Department of Health where proper laboratory analysis will be made. There is a tendency now to prepare substitutes, not necessarily deleterious but having less food value, thereby covering up exorbitant profiteering margins made in the price.
I have been asked about meatless Tuesday. There is considerable discussion on that just now. Well, I discussed the matter in Washington the other day. There is no doubt that the supply of meat to restaurants and hotels and public eating places is going to be greatly reduced. In other words, your portions will be smaller and the amount allowed to public eating places, I think, will be reduced to quite a bit. [AVAILABLE AUDIO ENDS HERE] Therefore, until we have a national policy and I think that Washington will announce a trial period, please keep meatless Tuesday, the following Tuesday. After that, you may use your own discretion, because, as I said before, all public eating places will be limited in the amount of supply of meat obtainable and therefore, you can adjust it to suit your own trade. Therefore, the policy of the City is: we'll continue meatless Tuesday next Tuesday and after that we'll try, say for a period of 30 days or so, to see just what adjustments can be made with the supply available, I think that Washington will recommend a suspension for a trial period. If the supply continues to be short, then, of course, we'll have to return to regular meatless day or days a week.
NEW YORK PREPAREDNESS BLACKOUT DRILL
Just a warning that regardless of how any of us may interpret the war news, it is necessary in a city of seven and a half million people always to be prepared. We must not forget our signals. We must always remember what to do. The next blackout drill or air attack drill will be very severe in testing the response and
mobility of all of our city protective services, including our volunteer and splendid Air Warden Service.
All of us must remember that on the blue signal sustained note on the siren your lights are out, keep the lights out and turn the radio on. If the first signal is sounded and your lights are on, turn the lights off and keep the radio on. Keep lights off and radio on until the all clear. The radio will give you up-to-the-minute information and news. You will know, thereby, whether a practice drill has been ordered or whether it is a real attack. The army will send out the signal. It is up to us to show how good we are.
THANKS TO RADIO STATIONS FOR AIR-RAID INSTRUCTION CHARTS
May I take the opportunity to thank WABC, WEAF, WHN, WTZ, WNEW, WOR, our leading broadcasting stations, for their splendid and useful illustrated chart on air raid instructions. If you do not have one of these attractive charts write to your favorite radio station and get one. The Air Wardens will also distribute them. Keep one of these charts posted where all members of the family may see it and become familiar with the rules. Or, keep it posted in the shop or factory or office where all employees may see it and know just exactly what to do in the event of an attack.
Tomorrow I go into my annual budget retreat. That means I commence preparation of the Executive Budget which must be submitted to the Board of Estimate on or before April 1st. The budget will be ready at that time. That brings up the question of the present financial condition of the City. At the outset let me tell you that a balanced budget will be presented. Regardless of all the efforts made, I will not permit my City to become bankrupt and all values destroyed, causing irreparable and immeasurable damage to hundreds of thousands of innocent people and making it possible for a few to buy up distressed property and business and make a fortune. That has happened in other cities. It will not happen in good old New York as long as I am Mayor.
REAL ESTATE TAX
I still believe that real estate is carrying all that it can. That applies to rent. Real estate taxes are paid by the rent payers. I shall continue to make every effort, not only to keep New York City solvent but also to keep it so financially sound that it cannot be wrecked in years to come. Efforts are being made at this very moment to disregard prudent financial planning for the future. It is not the Mayor's personal interest involved. It is the interest of our City, our City that all of us love and are proud of. It's the government of all of the people of the City of New York.
H.L. GRIGGS LETTER
I received an interesting letter from Mr. H. L. Griggs. I want to read it to you, he said:
"I have been listening to a discussion on the radio on the suggested increase in the sales tax of 1 percent to 2 percent, which is all right with me, but I would like to hear over the radio on Sunday why an increase in revenue is needed."
The writer then adds, "please excuse pencil, I shall be 88 years old in nine days." Well, many, many happy returns of the day, Mr. Griggs, and here is the answer. Additional revenue is needed, as I've just stated, because I do not believe the real estate tax should be increased. In addition, if additional revenue from other sources is not provided, there will be an increase in real estate taxes of perhaps as much as $2. a thousand. I feel that the present real estate tax has reached just about the saturation point and that the 20 points reserve between the present rate and the constitutional tax rate limit, although constitutionally available, if used would bring about undue hardship to over three hundred and fifty thousand owners of small homes in our five boroughs, and would also reflect in increased rents to additional hundreds and hundreds of thousands of tenants.
Any discussion of an increased sales tax at this moment, Mr. Griggs, would be only academic because the state legislators voted such an increase down last week, That apparently is the end of an increased sales tax, as such, and it is quite satisfactory to me. I do not blame upstate legislators for voting against an increased sales tax when city members voted against it. I'm sure the city members of the state legislature for the moment, did not bring to mind that voting down additional revenue for the city would increase real estate taxes for their constituents. I'm sure that when the New York City legislators realize that, they will give the City the necessary enabling act to raise some sort of additional revenue other than increased sales tax.
MANDATORY INCREASES IN EXPENDITURES
In further answer to the query of why additional revenue is necessary, I want to say that each year for the past nine years I have been able to absorb mandatory increases in expenditures of millions of dollars by economies. Each year, it naturally has become increasingly difficult. In addition, in times of war, the cost of government increases, while a municipality is limited in its sources of revenue. It is not like the State or the Federal Government, sovereigns with powers to appropriate and run into a deficiency, if necessary. The Executive budget must be within the limits of estimates based on lawfully authorized revenue. For instance, it has been stated by a group that in a budget of $769,000,000, it would be easy to deduct two and one half percent and thereby make up the deficiency. That was stated by the Citizens Budget Commission.
Any honest person familiar with the City's budget will readily see what an unfair and wilfully deceiving statement that is. For instance, $156,000,000 is the debt service item. No two and a half percent could be deducted from that. Mandatory salaries in the Department of Education amount to $80,900,000. The City does not have the power to deduct from that. Salaries fixed by referendum vote are $86,500,000. No two and a half percent can be deducted from that. Fuel oil, coal, food and medical supplies for City institutions amount to over $13,000,000. The price of all of these commodities has increased and is increasing. We cannot deduct two and a half percent from that. There are the state courts for which the State fixes the mandatory salaries and the City must provide the money amounting to over $9,000,000 and therefore, we cannot cut two and a half percent from that. Pension funds are based on actuary formulas and are fixed by law. They amount to about $37,000,000 and no deductions as recommended by the opponents of any tax can be deducted. Also of the items covered, $85,000,000 come from state and federal contributions to many activities. To decrease that would be to decrease the contribution to the City. This alone shows how silly such a proposition is.
COST OF WELFARE SERVICES
Another item in the present budget which amounts to $42,000,000 is the allowance for food, clothes, and rent for the aged, for the blind, for veterans' relief, for the unemployed and for orphaned children. These allowances are low even now, I fear. Surely two and a half percent could not be deducted from this scanty allowance thereby taking it out of the mouths of these unfortunate people. No, not as long as I am Mayor. There will be some saving because of decreased load, but that is very risky in the face of existing conditions. Yet, I will take a chance, but I must have some reserve ready to supplement these appropriations if conditions change.
HIGH COST OF LIVING
Everybody knows that the cost of living is increasing and we have several thousand employees in the lowest wage groups. We cannot ignore that. I must meet that situation. Take families getting $1500 a year or $1600 a year. Surely it is difficult for them to make both ends meet and to provide for their children. I cannot ignore that any longer. I must provide some increase - not as much as I would like to give but not even up to the brackets I would like to go because of limited revenue. But, we must meet this situation and I intend to meet it. The City Council has called the attention of the People of this city several times to this situation. It's going to be met.
ALTERNATE PLANS FOR INCREASING REVENUE
Now, as an alternative proposition to the state legislature to avoid increase in the present rate of real estate tax, I repeat FOR INCREASING some of the available revenues that could he provided: as I stated last week and I so continue to state, the return of the cigarette tax taken from the City in 1940, the return of the utility tax two-thirds of which was taken from the City in 1938.
If possible, the State to assume the payment of all State Courts now imposed on the City, as I've just said amounting to $9,000,000, or to give budgetary control to the City of all salaries except that of judges, Budgetary control of all non-teaching salaries now fixed by the State or the State to assume full control of education which is claimed as a state function, and the City to contribute 4 9/10 mills of each dollar of tax collected.
An increase of from one twentieth to one tenth in the business tax. I think such a bill is pending.
RETAIL BUSINESS TAX
Here is a plan in lieu of the increased sales tax or in place of any sales tax. If the Legislature will give the power to the City. Let the State give the City the power to enact a retail business tax. [AVAILABLE AUDIO BEGINS AGAIN HERE] A retail business tax based on the total volume of retail sales. This could be a graduated scale starting at one and one half percent, one and three-quarter percent up to two percent. All retailers doing business under $10,000. would be exempt. This would relieve no less than 104,000 retailers in the City of New York who are now collecting the present sales tax and would further relieve them of the cost of accounting and collecting this sales tax. 104,000 stores. The retail tax would be paid by the retailers and not the customers. In other words, by the vendor and not the purchaser. This alone would avoid any of the objections raised by the Department stores. The group whose retail sales range from $10,000. to $40,000. per year of which there are 21,000 who would pay at the rate of one and one half percent of their annual sales. The customer pays nothing. The group doing business from $40,000. to $100,000. of whom there are 4,816, who would be taxed at one and three quarter percent of their receipts. Retailers doing business from $100,000 to $1,000,000. or more, would pay at the rate of two percent of the gross receipts of retail sales. Customers would pay nothing.
This plan, of course, is neither new nor original. It has been known as the Brandeis plan. I was discussing the tax. situation with my good friend, Morris Ernst, the other day, and he asked me if I had forgotten about the Brandeis plan. I told him no, but that I did not have much choice in the matter, it was really up to the state legislature and the increase in the sales tax was very definitely intimated to the City as the one which could receive consideration by the legislature. Now that that is defeated I submit the Brandeis plan to the legislature. It is used in the State of Illinois. It was tried out in this State but was very poorly administered and then it was repealed. This plan would relieve the retailers from the present business tax and, as I've stated above, others. I'm asking the Legislature to permit the City to increase the business tax from one-twentieth to one-tenth percent.
INCREASE IN DEPARTMENT STORE SALES
Talking about opponents of any kind of taxes, may I point out that the department stores, who are doing most of the kicking just now, had a most prosperous year. I am informed by the Federal Reserve Bank of New York that sales of New York City Department stores showed an increase of 14 percent in the week ending March 6, as compared with a like week a year ago and also showed an increase, according to the Federal Reserve Bank, of 19 percent over a comparable period of four weeks a year ago. No, not only an increase of trade but also an increasing Increase in profits.
REQUESTS BY DEPARTMENT STORES FOR REDUCTION IN TAXES
Talk about the burden of real estate tax, may I point out that the very same department stores which do not like the sales tax, seem to forget that they do not like the real estate tax either. For instance, the firm of Lord & Taylor has been asking for a reduction in the real estate tax since 1939. Now, let's see Lord & Taylor's record. In 1939 Lord & Taylor started to ask for reduced real estate taxes. It has actually received a reduction of $150,000 of the assessed valuation in 1940-41. In addition they received $100,000 reduction in 1941-1942. Not satisfied with that they again came and begged for reduced rates and $100,000 more was reduced in 1942-1943. Seemingly forgetful of the home owners and small taxpayers another application is pending for a further reduction of real estate taxes by Lord & Taylor for 1943-1944.
Another department store, Bloomingdale's has a great record here of complaints about real estate taxes and so has Gimbel's. I could go through the whole list. I mention that to prove my point that it is hard to put anything more on real estate to provide the additional revenue needed for the City of New York. I'm sure the legislature will give our needs favorable consideration. Otherwise, as I've stated before, I will submit a balanced budget within the means available and that will make next year even more difficult,
I guess my time is about up now. I may have run a little over, I have a lot more material here, but I can't take more time because there's a very interesting program on, so I will now say patience and fortitude.