Evening star., 1932-08-28

Profs. Warren and Pearson Of Cornell
University have, after prolonged and
patient research, produced a record OF
wholesale prices in America extending
back to Colonial times. No such record
has ever before been available to stu
dents of economics. The record covers
1873 years, beginning in 1850, at a time
when the independence Of the United
States was scarcely dreamed Of by the
most far-Seeing.
The immediate usefulness Of the cata-
logue today is the indication 1t gives,
thoroughly borne out by the events of
the moment, that wholesale prices early
this Summer had reached normal low
and were due, in the light Of past
experience, to swing upward. They
have done so. Wholesale prices of all
manner of basic commodities have
risen, particularly foodstuffs and farm
products. But other materials have
risen, too, including oil, copper, silver
and pig iron.
Observing a healthful lag behind the
prices, stocks and bonds took turn
upward, too, not long ago and the coun-
try appears to be launched on another
period of rising security prices. 1t might
be regarded that the market had been
rigged by manipulators were it not
for the fact that the commodities them
selves rose first. When the actual wares
produced by or dealt in by companies
whose securities are traded in on the
stock exchanges are bringing higher
prices, that constitutes reason to eX-
pect those companies will make larger
profits. Stocks and bonds can only be
valuable when the basic goods dealt in
bring remunerative prices. Such
situation now exists and If continued
for only a short time will restore the
Nation to a sound prosperity and solve
the unemployment difficulty.
Prices are not as low as they have
been in the past, according to the War
rem and Pearson study, but have ap-
preached near enough to record bottom
to warrant belief in a change. The
record has been computed, using the
period from 1910 to 1914 as a base
The average of wholesale prices for
that period is assumed to represent 100
Variations in the price level above or
below that average are stated IN terms
of relative percentages of the 100 mark.
Wars Cause High Levels.
The lowest prices recorded are for
the very start of the record; that is,
1850. They were then only so per cent
a slow rise until the outbreak OF the
Revolutionary War, when, as always in
wartime they literally skyrocketed. BY
the end of the war they had reached
an index number of 225-that is, two
and one-quarter times the 19lO-lsl4
average.
There followed the distress period OF
reconstruction after the treaty of Paris.
The currency was much confused.
Various issues Of Colonial money we're
still in circulation, the Continental cur
| rency of the new Government was IN
use. English money still was employed,
and by preference where 1t was
obtainable. 1t can readily be imagined
that the price situation was seriously
disturbed. BY searching the periodicals
published in principal cities of the new
republic the researchers were able TO
compile the trend 1t showed that
| there was an abrupt fall extending
down 10 a level Of IS by 1870.
Wars always mean rise In the gen
eral price level This rule affects not
! only countries which themselves are
belligerents, but others as well. Tne