Monday, October 26, 2009

The Blackmarket in Gasoline During WWII -- "Gas Chiselers"




The Black Market: “Chiseled Gas”

Consumers, gasoline dealers, and distributors gave the black market a tacit approval. Lifted out of the Great Depression by the war in Europe and a resurgent consumerism, Americans renewed their appetite for automobiles and driving. In his analysis of American culture during the war, John Morton Blum noted, “By stimulating the economy, the war did wonderful things for the American people . . . There were plenty of jobs. Business and farm profits were rising, as were wages, salaries, and other elements of personal income.”43 After Pearl Harbor, Americans spent their disposable income and sought new economic opportunities. Using mass transit, public transportation, and automobiles, “Americans moved faster and in greater numbers than before.”44 As a result of this renewed affluence, Americans needed to buy more gasoline. Harold Williamson observed, “Between 1939 and 1941 the annual domestic consumption of all petroleum products rose by approximately 242 million barrels – an increase of slightly over 20 percent.”45 Perhaps with some irony, however, global war limited the supply of petroleum to the American market, and dashed consumer’s hopes of an open road. The commitment to send oil tankers to Great Britain, coupled with the toll that German submarines took in the North Atlantic and Caribbean, reduced petroleum supplies available on the East Coast. To further complicate things, Japan invaded East Asia in late 1941 and with the fall of Singapore controlled 90 percent of the world’s rubber supply.

Americans resisted gas rationing from its inception. Government officials’ wartime policies concerning the conservation of critical commodities were often at cross-purposes to a rising consumerism among those Americans active on the home front. Economists James Maxwell and Margaret Balcom explained: “The inspiration for the debate was not simply the high esteem in which the American motorist held his car. A babel of voices arose which left citizens unclear as to what was necessary. Some oil companies feared the effect of gasoline rationing on their businesses, automobile associations feared a loss in clientele and State gasoline tax officials feared a loss in revenue.”46

In an attempt to provide East Coast Americans with gasoline, government officials pursued a strategy of “opening the valves.” Pipelines were constructed, railway transportation increased, and domestic refining of crude oil increased. The pipelines ‘Big Inch’ and ‘Little Big Inch’ were built by War Emergency Pipelines Inc. to transport crude oil from east Texas to New York and Philadelphia. But government and industry efforts did not meet military and civilian demand for gasoline. The urgent situation led to the creation of the Office of Defense Transportation, which was given the task of coordinating all domestic transportation for the successful prosecution of the war.47

By early 1942, the transportation bottleneck and burgeoning industrial, commercial, and civilian demand for petroleum products began to put pressure on supplies.48 Before rationing was instituted, government agencies attempted to limit consumer’s access to gasoline. In February 1942, The Petroleum Administration for War (PAW), whose function was to allocate necessary gasoline to subcommittees, recommended a reduction in the amount of time service stations would remain open. In March, the War Production Board (WPB) ordered a 20% reduction in the normal deliveries of gasoline to service stations and bulk plants in District I and the Pacific Northwest.49 Concomitantly, the PAW launched a public information campaign to encourage drivers to economize the use of gasoline and heating oil. “But the public failed to respond,” a PAW official lamented, “because it could not understand why the statements of abundance of a few months before should suddenly be reversed to claim of shortage.”50

As the amount gasoline allocated to the war effort increased and the amount allocated to the citizenry decreased, it became apparent to officials that gas would have to be rationed. Americans still needed the automobile to get to work, for recreation, and to maintain familial and community relationships. Many Americans, whose work was essential to ensure victory in the war, needed to drive to their places of employment. Bradley Flamm wrote, “Private cars had to remain the principal form of transportation . . . and they had to be used as efficiently as possible.”51 Rationing aimed to control the use of gasoline, and urged citizens to draw a distinction between essential and non-essential travel. Since the automobile had become a necessity in American life, a semblance of the structure of everyday life had to be maintained to allow victory in Asia and Europe. Public transportation was not sufficient, and during the war trolley tracks and rail lines were worn to a nub.

Individual travel and disposable income combined to create what The New York Times Magazine called “The Taxi Driver’s Golden Age.”52 With gas rationing, and the number of taxicabs reduced, New York cabbies found themselves, “one of the most popular forms of life.”53 Beyond the urban environment where cabs could transport individuals, government officials faced unprecedented transportation challenges.

On December 1, 1942, the Office of Price Administration (OPA) made gasoline rationing a policy in District I, and later that year a national policy. The Office of Defense Transportation (ODT) was created to keep essential passenger cars and commercial vehicles fueled. In his analysis of the ODT, Framm pointed out, “the system of rationing evolved extensively over time.”54 Beyond reduction of supplies, Framm wrote, “it quickly became a more complex system based on ration books and coupons that were administered by thousands of War and Price Rationing Boards.”55 In theory, rationing was to be executed through a complex system. Economists James A. Maxwell and Margaret N. Balcom described the process:

Rationing is a process of controlling demand for a scare commodity. Therefore, the first step in the function of a rationing program must be placing of ration evidences (representing the right to buy) in the hands of the right consumers and in the right quantities . . . In order to control effectively the use of that currency, and the distribution of the commodity it represents, supervision must be exercised over the industry engaged in distributing the commodity…the principal control was the flowback system.56

At the top were state-licensed distributors, then the intermediate wholesaler, and then a retailer who sold to costumers. A card-based system was put in place temporarily while officials developed a system based on coupons.57 The system depended on the discretion of local administrators. The local boards gave citizens, depending on circumstances, either “A”, “B,” or “C” coupons. Government officials assumed that all cars averaged 15 miles per gallon.58 “A” coupons were the standard ration: 150 miles for occupational purposes and 90 for miscellaneous family driving. This amounted to an annual 5,250 miles per vehicle. “B” and “C” coupons included additional miles for those whose work was seen as necessary in wartime America.59 Boards also provided rations for hardships, furloughs, fleets, and transports.60 Drivers in preferred categories received what they needed. “Rural teachers are limited to 5,400 miles and prospectors for strategic minerals to 11,800.”61 For obvious reasons, American citizens chaffed against rules implemented by their local boards.

In 1943 Joe M. Dawson, a board member in his community wrote, “We are about as popular as tax collectors.”62 He noted, “in the gasoline and fuel-oil rationing . . . there is the most discretion, and much depends upon the judgment of the board members.”63 Doctors, traveling salesmen, and businessmen lobbied Dawson to give them more gasoline. When he did not grant their requests, Dawson would often be “cussed out.”

The ODT used several methods to control American’s gas consumption. “The most important method of controlling travel demand was to simply limit the amount of gasoline that civilians could buy by rationing supply.”64 Methods also included a national 35 mph speed limit, bans on pleasure driving, and a requirement to carpool. The ODT also had suggested cooperative methods such as the coordination of business and travel schedules.65 The ODT used posters, radio programs, newspaper articles, and advertisements to influence Americans to drive less. They often linked their propaganda with patriotism, and they still encouraged Americans to travel. Flamm explained, “keeping up morale and ensuring that productivity remained as high as possible depended, in part, on ensuring that some purely social and personal travel was permitted.”66

A July 1942 survey, “Do Americans support gasoline rationing?” revealed that 70 per cent of Americans approved and recognized the necessity of the government program.67 Americans recognized the necessity of rationing during wartime, but still disagreed with the decisions of local boards and yearned for the open road. When local boards turned down requests for additional gas, Americans had no difficulty in acquiring ‘black gasoline,’ and a widespread black market for gasoline quickly developed with the coupon system, which threatened to upset the war effort. Maxwell and Balcom estimated that 8% of oil was purchased illegally, and Williamson estimated that in 1944, up to 125,000 barrels a day were illegally procured.68 The PAW wrote that black markets, “drained millions of gallons of sorely needed gasoline from legitimate users” and “time after time threatened to upset the entire gasoline distribution system,” particularly on the East Coast.69 Bradley Flamm asserted that the amount could not be quantified, but remained evidence that “demand for fuel, and the personal mobility it permitted, remained high.”70

When the bureaucrats responsible for the flowback system first generated statistics on gas use, they reported that the market was full of unused coupons.71 The buying and selling of additional coupons enabled Americans who wanted to travel in automobiles during the war to do so. Beyond surplus coupons, many were counterfeit. Highly organized rackets developed to take advantage of the ease of theft, and the lack of impunity. The coupon system welcomed a “Who’s Who” of criminals from bootlegging, counterfeiting, white slavery, kidnapping and murder to the world of oil. A March 27, 1944 Newsweek article noted the ease and profitability of racketeering: “the risks are fewer, the work is clean and not unpleasant, and the operating costs are not nearly so prohibitive . . . the profits are unbelievably high: 1,000,000,000 a month.”72 Racketeers supplied the demand of American consumers for gasoline and enabled automobility. Racketeering was a part of American culture, and the anonymity of car culture provided opportunity for illegal profit.

In the 1944 movie Jitterbugs, comedians Stan Laurel and Oliver Hardy were a traveling two-man jitterbug band.73 The movie opens with the comedians in their broken down Ford with just an “A” card. Suddenly, a debonair salesman played by Bob Bailey, arrived and sold the duo magical gas pills. The gas pill, sold in 5- and 10-gallon packets, transformed water into gas. They were marketed by Bailey as the answer to the “rationing problem,” which in Jitterbugs was stated to be the “world’s greatest problem.” The con man convinces a na├»ve Laurel and Hardy to play a concert at a local carnival and sell the pills to the crowd. They con a small town American for $223. The trio moves on to engage in other plans to swindle real-estate racketeers and other fortune seekers. In Jitterbugs, trust or good feelings were absent in wartime America.

Beyond approval, many American consumers purchased from the black market. In 1943, Colliers writer Mike Miller traveled on “chiseled gas,” from the Mexican border at Brownsville, Texas to the Canadian boundary at International Falls, Minnesota. A chiseler, defined during the war, was one who drove to gas stations and attempted to ‘finagle’ a tank of gas. Some gas stations refused Miller service, but many were willing to sell gasoline at the regular market price. He also discovered that truckers reported they used gas, but still had gas in the tank, and received more tickets to sell. Miller noted that retailers were permitted to build surplus in their tanks. He wrote, “No one had stopped me to ask if the trip was necessary or to examine my ration books. There was an A card sticker on the windshield.”74 Miller’s trip might have been more difficult if he traveled from Florida to Maine, but his journey exposed the OPA’s inability to prevent a black market.

By 1943, the black market threatened America’s successful prosecution of the war. The Senior Scholastic, in a call to “Smash the Black Market Menace,” wrote “the general public has been too tolerant, or ignorant, of the activities of the black market.”75 The article blamed ignorance and called for teamwork. It linked American’s driving directly with the war: “The Nazis know that a breakdown in our gasoline rationing program would seriously hamper the American war effort.”76

By 1944, the Office of Price Administration recognized the black market as a serious threat to the American war effort. Chester Bowles, an OPA administrator wrote, “every gallon of gasoline bought in the black market is an overdraft on our precious war stock: gas that is diverted from legitimate users.”77 In 1944, even with limited manpower, the OPA began to thwart the black market. First the OPA launched a public information campaign to warn the American people of ‘black gasoline.’ Second, the OPA appealed to car owners to endorse their coupons. Beginning in March 1, all “B” and “C” stamps were issued with serial numbers to make stolen and counterfeit coupons easier to trace.78 The Petroleum Industry War Council created a Black Market Committee and that paid for $500,000 in newspaper ads. By the summer of 1944, a majority of the American public was informed of ‘black gasoline.’

In 1943 the OPA cracked down on the black market. Chester Bowles declared, “We must smash the racketeers, if we are to save soldiers’ lives.”79 Before the war ended, more than 4,000 stations had lost their selling licenses, and 32,500 drivers lost their ration coupons due to illegal gasoline transactions.80 In 1944, Congress convened to address the problem.81 Despite a diminished black market, more oil was dedicated to military use. In the latter years of the war, Americans hoped for more gasoline, but the prospects were bleak. A September 1943, Business Week article noted that the “PAW considers civilian supply seventh on its list of important jobs.”82

Business Week explained that rationing was more of a problem than a solution, because, “car owners turned out to be rugged individualists.”83 In June 1943, more gas came to America by barge, but the Army and Navy demanded more gasoline,84 so much so that, “Good Humor’s jingling ice cream trucks were swept off the streets,” and made stationary outlets.85 By summer 1943, rationing became more stringent. Gasoline supplies for civilian use were pressured between military demands for both aviation gasoline and all-purpose gasoline.86 The Nation declared, “Maybe We’ll Get More Gasoline, but Outook’s None Too Bright.” Civilian supply remained lowest on the PAW’s triage even with crude production oil reaching a peak in 1944. Americans supported the war effort and wanted to defeat the Nazis and Japanese empire abroad, but the war revealed an American dependency on gasoline for the operations of daily life and a car culture of individual anonymity that permitted ease of theft and widespread complicity in a black market. Gas rationing also revealed the masterful effort of various government agencies to control automobile travel. In his final analysis, Bradley Flamm asserted that “had the American public been able, they would have used the money they were finally earning after the lean years of the 1930s to get in a car and go,” and thus the efforts of the ODT to control American desires was “a remarkable accomplishment.”87

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