New-York tribune., 1920-08-27
Cost of Living
Taking aDrop;
Food to Fall
Reserve Board Says Break
in Prices of Basic Raw
Materials Is Reflected
in Rates to Consumers
Speculation Is Checked
Wool, Silk and Leather
Principal Commodities
Which Show Reduction

WASHINGTON, Aug. 26 (By The AS
sociated Press ).-Marked indications
that living costs apparently have start
ed on their long awaited fall were said
by the Federal Reserve Board to-day
TO be contained in its latest reports.
An important downward tendency" in
prices OF ali commodities, excepting
food. is evidenced in all parts of the
country, the board said, adding that a
sharp reduction in the price of raw
products also forecast lower food
prices.
The board said there had been
pronounced checking" of speculation.
as we'll as definite, although slight.
increase in general efficiency, and an
equally positive, yet limited, curtail-
ment Of extravagant expenditure and
unnecessary borrowing" There has
been also sustained tendency" tow
ard the paying off of loans secured by
government and other bonds and Sc
curities.
Basic Raw Materials Lower
Inc podIu report reveals that with
in the last two months price changes
have been marked in all basic raw
products. but have been most notice.
able in wool silk and leather. These
reductions are said TO have been ac-
companied generally by a correspond
ing drop OF prices IN the retail field
on clothing and shoes and several other
staples.
The downward tendency of prices" :"
the board said. SIS not to be explained
by reference TO any one cause or set of
causes, but is the outcome of a COM
plex Of factors. In wool, til termina-
tion o. government control in various
parts Of the world and the steady mar
keting Of the raw supply held by the
United States government has had an
important effect"
depressed situation" was said to
exist in the leather and shoe industry.
Shoe manufacturers are slow in placing
o1der5 with leather dealers, with the
result that prices of raw materials
hsve suffered heavy decline. The
dull season of late summer is de-
scribed & beginning earlier and last
ing longsr.' The manufacturers. how
ever, anticipate a heavy fall business,
but this is not expected by business
experts 10 increase the level of prices
in these lines.
Large Stocks Accumulated
Large stocks of leather and hides
which had accumulated" the board as
serted, coupled with a falling off in
consumption demand for leather prod
gc;s resulting directly from the very
high retail prices which were being
Charged are correctly regarded as
primarily responsible for the drop in
leather prices"
The break in The silk market and
subsequent falling OF retail prices Of
that textile were attributed to specu-
larIve activity in Japan, where heavy
losses have been suffered by dealers
as a result Of the refusal of Americans
70 buy at exorbitant prices. Financial
difficulties which developed in Japan
las- spring also are showing effects
and aiding in forcing price reduction
on silk
Lower prices on cotton and cotton
products were forecast because of an
expected heavy crop combined with a
slowing UP of demand In addition, the
board foresees generally higher eff
Cheney of labor in industrial produc-
tion and an improved transportation
service