Figures on holdings of money and of government securities during World War II suggest that the controls may have had such effects when they were in force; but, if so, the effects were not lasting and had completely disappeared by mid-1948 when prices reached their peak. From the outbreak of the war to the subsequent price peak, cash balances as a fraction of national income fell by about the same amount in World War II as in World War I, and cash balances plus government security holdings rose by a smaller amount (lines 18 and 19). So direct controls can be rejected as a factor affecting the ultimate magnitude of the price rise.
Does the fact that prices rise precipitously when wage and price control are lifted prove that the wage and price contols were inconsequential or that their removal played no role in the ultimate rise in prices?
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