New-York tribune., 1918-07-21

After several months Of hesita-
tion commodity prices are rising
again-rising at more rapid rate
than has been Witnessed at any
time since the first month Of Ameri-
can participation in the war. Be-
tween April /, 1917, and the corre-
spending date Of this year, prices
advanced steadily until Dun's index
number established a new peak at
$23O.31. The advance was then ar
rested, and on the first. day Of each
of the two succeeding months de-
clines were reported, the general
level of prices, as measured by this
index, falling more than s points in
the period. So pronounced was the
downward trend that some observers
suggested that the crest of the up
ward movement had been reached
and passed, and that as the govern
ment extended it's control over
prices further recessions might
take place. During June, however,
the course Of prices was reversed, SO
that by the first of this month the
declines occurring in April and May
were wiped out and new high rec
ord was established by an advance
of nearly 8 points. 1t is significant
that, for the first time in more than
a year, advances were made in all
of the seven groups Of commodities
included in the index. In part this
general rise no doubt resulted from
adjustments in fixed prices for cop
per and other commodities, but it
may also be accepted as showing
that credit initiation is beginning to
have a more pronounced effect on
the cost of living. It would not be
surprising if the rate Of increase at
tained in June should continue.
Gross railroad earnings in May
were only 8 per cent larger than in
the corresponding month a year be-
fore, though meanwhile rates had
been increased heavily. In June the
increase probably was still smaller,
a preliminary estimate Of "The
Financial Chronicle" Indicating Il
gain of slightly more than 4 per
cent. Apparently there was little if
any expansion in the volume of traf-
fic handled during the two months,
and this is regarded in some quar-
ters as disappointing, the inference
being drawn that unifcation of oper-
ations under Federal control has
failed to produce greater efficiency.
That may be true. Lacking definite
information, it is impossible to tell
just what was responsible for the
seemingly unfavorable showing. But
it is not improbable that curtail-
ment of non-essential operations and
of passenger travel were resspon-
sible to considerable extent for the
failure of earnings to expand as
heavily as had been anticipated. 1t
IS absurd to pass judgment on the
efficiency of the Railroad Admins
tration on such poor evidence as this.
On d number of occasions we have
called attention to the fact that, in
asmuch as stock speculation must be
regarded as non-essential, it would
have to get along on thin rations
whenever essential requirements of
credit made it necessary to curtail
Stock Exchange loans. During the
last week this contention was shown
to be we'll founded by developments
In the local money market. Inas-
much as the volume of trading has
not been unusually large, the dearth
of money for speculation was rather
unexpected, and, had it not been for
Judlcious action by the money COM
mittee, a sharp advance in rates
might have resulted. AS it was,
rates held firm at the recent high
levels. The control exercised over
money will be a continuing factor in
the stock market, and probably will
tend to restrain speculative oper
atlons for an indefinite period.
Spectators might be willing to pay
considerably higher rates than those
which now obtain, in view of the
large returns on many stocks, but
1t is not so much question of rates
RS the assurance Of a steady supply
OF funds. And that is something
upon which it will be impossible to
count with certainty if big specu-
lation should develop.