§ Mr. Sharpasked the Secretary of State for Foreign Affairs to what extent black market activities have increased in the 222W British zone of Germany as the result of recent increases in agricultural wages and in the prices of agricultural production requisites, unaccompanied by corresponding increases in the approved prices of agricultural products; and what remedial action is proposed.
§ Mr. MayhewIt is impossible to give any accurate estimate of the extent to which the black market in foodstuffs has been increased since currency reform. Certain foodstuffs are still scarce and supplies and price levels have not yet settled down to a new equilibrium. However, it is known that, in spite of an appreciably greater total of foodstuffs available, the amount of home produced foodstuffs passing through the official channels of distribution is less than at the same time last year.
Prices of agricultural produce have not remained stable as is suggested in the Question. Since the spring of 1948, the prices of all the main agricultural products, with the exception of sugar, have in fact been increased. The prices of grain and meat have been raised since currency reform. Nevertheless, it is unquestioned that the increase in agricultural prices is not as large as that of industrial prices including those for farm requisites.
The question how to create a new balance of price levels, and all problems connected with price questions are in the first instance German problems within the competence of the German Bizonal Economic Administration. Recently, two letters were sent by the British and American Chairmen of the Bipartite Control Office to the Chairman of the Bizonal Executive Committee, the President of the Bizonal Economic Council, and the Chairman of the Bizonal Länderrat. In these letters anxiety was expressed about recent price increases, and an increased measure of economic controls was requested. The German authorities are setting up a body to survey the whole field of prices, wages and taxes, and it is hoped that this body will help to improve the price situation and thereby reduce black market activities to a minimum.