The sun. [volume] (New York [N.Y.]) 1833-1916, 1916-04-17
Figures on Nearly All COM
m@ditics Expected to Climb
Until War Ends.
PURCHASE POWER OF
MONEY Is BADLY CUT
Merchants Face inclination
to Overbuy With Dis
aStrOuS Results.

The upward movement in comnodit,
prices. taking them as i whole. con-
raucS and shows hut little promise OF
abating until the basic cause for the
uplf, in the market in this country
the European warts removed.
Il IS recognized fact that present
high prices are due primarily to the
impetus given our domestic trade by
the heavy buying here Of the beliigerent
sa;icns since the outbreak OF the war.
With foreign Governments stepping
in;o our domestic markets and order
ins millions OF pounds of metals, many
shoes, thousands of cases Of clothing,
'crs Of grain and millions Of dollars
worth Of munitions. the result was that
tie domestic consumer. fearful OF being
caught short OF this or that basic com.
modify. has been inclined to stock up
heavily at increasing prices. In some
commodity markets II IL aid that buy
ers are nov oyerbought
Recently the features of the general
business situation have remained un-
changed and they continue to show in
crcastne intensity as the spring season
opens and fair weather promises to IA
ciitaI- outdoor activities. A general
shortage Of materials and labor will
serve TO check the work that might 9TH
er"ise he accomplished. According to
reports this check will not prove serious.
ou' II will hold back some OF the opera.
oons the country at large would like to
zee progressing rapidly.
Full
sure advance In wages are reflected BY
me retail trade reports throughout the
country. Merchandise is widely distrib-
u,ed and retailers are increasing their
purchases for some time ahead.
The heavy demand from abroad con-
lnues-our weekly exports reached a
new nigh record recently--and an abun.
lance of money and credit has aided in
plsh'ng commodity prices to abnormal
points. The fact that prices are higher
And that a large number of articles are
ornslng more dollars than heretofore IL
met with enthusiastic approval by per-
sons who are making the sales, hut IL
sould be wise to remember that under
,hese circumstances the dollar does not
nave the same Purchasing power.
the purchasing power Of the Ameri-
can dollar ~ present is less I'm the ma
!or'E OF instances than at any time
snce the last period of imitation during
nc civil war and the severa, years fol-
owing 1t. The dollar now has a pur-
chasing power Of from one third TO two
'ninns its strength year or a year and
six months ago
ANY development or accidept-in this
instance the European war-causes the
expectation OF shortage of supply by
reason "i unusual demand. Prolonged
ara unusual demand incites buying and
o. classes OF men who sell things fear
mat they Will not he able TO buy ma
'er"I, IN N" Quantities they desire and
'ha' 'h"lr r"ntract deliveries may be de-
aSed. AlS" they expect following and
rcprders
IN" result Is that there Is a desire to
NEE this condition and anticipate II,
ana much buying is done in excess Of
'"'Hlr'ncnts Thus buying becomes
ps'nIa'iNe and competition causes higher
'rlr''. FINALLY prices reach levels where
orn'ndrN industry cannot support them.
me merchant and the manufacturer stop
ouy'nc IN anticipation of a drop in prices.
and u is then that some men find that
levels ~ "'e"
f'''- "cgii 70 decline, and when the
'eh carrying burdensome stocks fail to
W! mere Is sim further decline. which
.oh''hle' as Il rule until all Of the
t'onhn gained by the rise has been lost
WIN r>naly something more
Wh"t'"n ~ credit and initiation Of COM
u'"''! prices generally occur at the
%me une' and this condition is never
.in"H uni!l the reaction and accom-
.sh!lhg period OF dehation or contrac-
"o" n's Tha, dena,lon and contrac-
w" ''l9" iuI'atipn and expansion Is
~ ABSOLUTE certainty