While the Restaurant flourished, the scheme was a success: the Restaurant bought heavily, all foods were saleable and prices were stable.
In August parcels and cigarettes were halved and the Camp was bombed. The Restaurant closed for a short while and sales of food became difficult. Even when the Restaurant reopened, the food and cigarette shortage became increasingly acute and people were unwilling to convert such valuable goods into paper and to hold them for luxuries like snacks and tea. Less of the right kinds of food for the Restaurant were sold, and the Shop became glutted with dried fruit, chocolate, sugar, etc., which the Restaurant could not buy. The price level and the price structure changed. The BMk. fell to four-fifths of a cigarette and eventually farther still, and it became unacceptable save in the Restaurant. There was a flight from the BMk., no longer convertible into cigarettes or popular foods. The cigarette re-established itself.
But the BMk. was sound! The Restaurant closed in the New Year with a progressive food shortage and the long evenings without lights due to intensified Allied air raids, and BMk.s could only be spent in the Coffee Bar—relict of the Restaurant—or on the few unpopular foods in the Shop, the owners of which were prepared to accept them. In the end all holders of BMk.s were paid in full, in cups of coffee or in prunes. People who had bought BMk.s for cigarettes or valuable jam or biscuits in their heyday were aggrieved that they should have stood the loss involved by their restricted choice, but they suffered no actual loss of market value.
prices of food were fixed for all time, cigarette prices of food and BMk.s
varied.
The Shop, backed by the Senior British Officer, was now in a position to enforce price control both inside and outside its walls. Hitherto a standard price had been fixed for food left for sale in the shop, and prices outside were roughly in conformity with this scale, which was recommended as a "guide" to sellers, but fluctuated a good deal around it. Sales in the Shop, at recommended prices were apt to be slow though a good price might be obtained: sales outside could be made more quickly at lower prices. (If sales outside were to be at higher prices, goods were withdrawn from the Shop until the recommended price rose: but the recommended price was sluggish and could not follow the market closely by reason of its very purpose, which was stability.) The Exchange and Mart notice boards came under the control of the Shop: advertisements which exceeded a 5 per cent. departure from the recommended scale were liable to be crossed out by authority: unauthorised sales were discouraged by authority and also by public opinion, strongly in favour of a just and stable price. (Recommended prices were fixed partly from market data, partly on the advice of the M.O.) At first the recommended scale was a success: the Restaurant, a big buyer, kept prices stable around this level: opinion and the 5 per cent.
tolerance helped. But when the price level fell with the August cuts and the price structure changed, the recommended scale was too rigid. Unchanged at first, as no deflation was expected, the scale was tardily lowered, but the prices of goods on the new scale remained in the same relation to one another, owing to the BMk., while on the market the price structure had changed. And the modifying influence of the Restaurant had gone. The scale was moved up and down several times, slowly following the inflationary and deflationary waves, but it was rarely adjusted to changes in the price structure. More and more advertisements were crossed off the board, and black market sales at unauthorised prices increased: eventually public opinion turned against the recommended scale and authority gave up the struggle. In the last few weeks, with unparalleled deflation, prices fell with alarming rapidity, no scales existed, and supply and demand, alone and unmellowed, determined prices.