The Washington times., 1930-11-20
Tower. LIVING
/ COST SEENF0R.
THIS WINTER
Downward Trend OF Staples
to Be Unchecked During
Winter, Expert Believes
BY LEWIS HANEY.
ny LAVAc hhNEAs
Director New York Universlty Bureau Of
Fuslneas Research and Former Eeono-
mist Of Federal Trade Commission.

Director New York Unlver9ity Bureau O4
mist Of Federal Trade Commission.
Last month, according to the
Governments index, wholesale
commodity prices declined 2 per
cent. They now stand 14.3 per
cent below q year ago. All the
main groups Of ON m o dities
showed declines in October.
Thus we are warranted In con
cluding that the downward trend
continued unchecked.
The Bureau Of Labor Statistics
index is heavily weighted with
finished commodities. It includes
such things as furniture, shoes,
automobiles and tires. This fact
makes it slow in reflecting priCss
changes. At present, however, q
is right up to time. The mo
sensitive BradStreet index feIl g
per cent in october.
Raw Material Slump
One Of the most significant
facts is that raw material prices
continue to slump. Rarely, If ever,
does a business recession stop
until the prices Of raw materials
begin to firm up. 1t is not likely
that there win be any upturn in
business until such prices stop
declining.
Last month the raw materials
in the Government index fell IS
per cent and were nearly 10 per
cent below a year ago.
On the other hand, the finished
commodities (manufactures) 3ell
only IA per cent. and were only
1915 per cent below a year ago.
This is one Of the troubles in the
existing situation. Manufacturers
try to keep prices up and are slow
to get their products in line with
cheaper raw materials. In many
cases it would be better If the
prices Of finished goods could be
more promptly. reduced in proper
ton to raw materials. This would
help consumers and might stirmu-
late buying.
Food Prices Cheaper
Unfortunately, we do not have
any cor lorehenSive measurement
Of retail prices. The Government,
however, Goes report an index Of
retail food prices. This shows Q
decline of 0.9 per cent in october
and is 10 per cent below a year
ago. So we can at least eat more
cheaply. Even here, however, we
note that wholesale food prices
have fallen more than retail food
prices.
The farmers are hard hit. The
average prices Of farm products
has fallen more than 20 per cent
since q year ago. But the average
price Of non-agricultural commod.
tiles is only IL per cent lower.
The reduction in what the farmer
has to sell has been much greater
than in what he has buy.
Some interesting details are as
follows: Hides and skins have
fallen 90 per cent in price during
the year, but leather is off only
is per cent. Boots and shoes are
only about 5 per cent lower Ia
wholesale prices than q year age.
Big Break in Rubber
Rubber has fallen nearly 80 per
cent in a year. Tires, however,
are down less than 6 per cent ia
the same period.
Livestock and poultry have de-
clined II per cent. Meats are
about 10 per cent lower at whole
sale.
These facts indicate that either
the manufacturers or the laborers
engaged in these industries, or the
wholesalers all Of these
have been trying not to pass. on
to consumers the lower raw ma
terial prices. This is q case IN
which business men do not want
the cost of replacement idea to
function.
But time and competition are
working for the consumer and we
may confidently expect lower liv.
ing costs during the winter.
1