The Office of Economic Stabilization was established within the Office for Emergency Management by Executive Order 9250 of October 3, 1942, to control the inflationary tendencies and the dislocations attendant thereon which threaten the military effort and domestic economic structure. The establishment of the Office was a result of the passage by Congress of the Stabilization Act of October 2, 1942 (56 Stat. 765), which directed the President to issue a general order stabilizing prices, so far as practicable, on the basis of levels that existed on September 15, 1942, and authorized him to provide for such subsequent adjustments in prices, salaries, and wages as might prove necessary for the effective prosecution of the war or the correction of gross inequities.
The Economic Stabilization Director, as head of the Office of Economic Stabilization, formulated and developed, which the approval of the President, comprehensive national economic policies relating to the control of civilian purchasing power, prices, rents, wages, salaries, profits, rationing, subsidies, and all related matters. These policies were for the purpose of preventing avoidable increases in the cost of living; minimizing unnecessary migration of labor from business, industry, or region to another; and facilitating the prosecution of the war. To give effect to these policies, the Director had power to issue the necessary directives to the Government agencies concerned. He was required also to settle any disagreement between the Price Administrator and the Secretary of Agriculture as to what maximum prices should be established for agricultural commodities; and increases in rates (under certain circumstances) and in salaries in excess of $5,000 (with $25,000 after payment of taxes as the maximum for any salary were not to be effective unless approved by him. By an Executive Order of April 8, 1943, in a further attempt to hold prices, wages, and salaries at the level of September 15, 1942, the President delegated to the Director all powers and duties conferred upon him by the Stabilization Act of 1942, and ordered him to issue the necessary directives under the authority of the act. By another Executive order of August 16, 1943, the Director was authorized to issue to other agencies such directives as he might deem necessary to enforce compliance with orders of the National War Labor Board.
By Executive Order 9620 of September 20, 1945, the Office of Economic Stabilization and the Office of the Economic Stabilization Director were abolished as an independent agency and its functions were transferred to the Office of War Mobilization and Reconversion, where it continued to exist as the Office of Stabilization Administrator.
The position of Economic Stabilization Director was held until the end of the war successively by James F. Byrnes, October 3, 1942-May 27, 1943; Fred M. Vinson, May 28, 1943-March 4, 1945; and William H. Davis, March 9-September 17, 1945.
