Letter on the Resignation of Chester C. Davis.

Dear Chester:

I have given a good deal of thought to your letter of June sixteenth, and your request to be relieved of responsibility for the future direction of the food program.

No one appreciates more than I do your ability in dealing with agricultural matters. But I am sure that you will agree with me that effective teamwork is absolutely necessary.

Before the Office of Economic Stabilization was established, differences as to prices and wage policies from time to time arose between the various war agencies which frequently had to be brought to me. The Act of October 2, 1942, directed me to stabilize the cost of living so far as practicable on the basis of the levels prevailing on September fifteenth and authorized me to exercise my authority through such department, agency, or officer as I might direct.

Under that Act, and before you accepted the office of Food Administrator, I set up the Office of Economic Stabilization and authorized the Director, among other things, to resolve disagreements which might arise between the Food Administrator and the Price Administrator and to issue to them policy directives. If we are to stabilize all prices we must place the final responsibility in one official. I know of no better method of coordinating the work of the Food Administrator and the Price Administrator, although that method does require a willingness on the part of both Administrators to accept the decisions of the Stabilization Director. The country realizes that stabilization applies not only to food but to many other things, such as rent, clothing, and wage decisions. The broad objective is, of course, to prevent the cost of living from spiraling upward and the purchasing power of the dollar from spiraling downward.

I agree with you that we cannot fully or effectively enforce our price or rationing programs or fully or effectively stabilize the cost of living without an adequate tax and savings program to drain off excess purchasing power. I have emphasized that fact in my Budget Message, in my statement on the hold-the-line Order, and on other occasions. But because the Congress has not yet provided the tax legislation I have requested, I cannot sit back and fail to advocate other measures such as limited consumers' subsidies which I am convinced can help to prevent the cost of living from getting completely out of hand. Of course you know that I also favor and have advocated such support programs and incentive payments to producers as will enable us to obtain the necessary war production.

I think you will also realize that I did not announce a program of broad general subsidies at my press conference on June fifteenth. I stated my views on limited subsidies in order to maintain farm prices and hold down consumer prices, and stated my willingness to give full and sympathetic consideration to any program which would accomplish these two ends. None has been offered me.

I am truly sorry that you feel unable to continue as Food Administrator subject to the coordinated controls which I have established and which I believe essential for the proper functioning of our war effort. But it would be unfair to you to insist that you remain in your position when you feel that, all things considered, you cannot wholeheartedly support a program to hold down the cost of living.

There can be no disagreement on the program for 1944, which you recently discussed with me. Everybody is agreed that far greater efforts must be made to increase production next year. However, the result of such a program for crops maturing in 1944 will not make itself felt until at least a year from now. What I am concerned with is the objective of keeping the cost of essential foods down for the next twelve or fourteen months. That, it seems to me, is of immediate concern to the country. The pay envelope of tens of millions of our citizens will not compensate them for great increases in their food bills.

In regard to the program for next year, I do not think that it would be advisable for you finally to determine and announce it. Whoever takes over as Food Administrator would then be called on to administer a program which he had no part in determining. That would really be a case of dividing authority.

Very sincerely yours,