Evening star., 1935-01-01
PRICE RISES SEEN
IN WHEAT, RUBBER
Character of '35 Business
to Be Determined by
Commodity Levels.
BY FREEMAN EMERY MARSTON.
ICamhridse Associates Staffl

To a very great extent the business
year 1885 will be determined by the
course of commodity prices during
the twelvemonth. OF course. this
statement is largely truism, but it
Is so important that this be recog-
nized that we venture to repeat it
once more.
There are two ways in which COM
modify prices may rise during 1885
One is through a general rise in the
price level through monetary or other
causes. The other is through world
scarcity. In the latter individual
commodities must be considered in
dependently.
Let us take up the probability of
general rise in the world price
structure first. 1t is definitely estab-
lished that, with most Of the world
of gold, the price trend has been
upward for about year and a half
to two years in most countries. To
some. extent this has been due to
crop limitation as practiced in various
countries and to world marketing
methods, or restrictions imposed by
various governments upon their ma
tionals. To large extent, however,
it Is due to the general inf1ationary
character Of the monetry prices Of
most governments, notably our own
and that of Great Britain. At the
present time there appears to be a
lessening Of the effects of these poll
cies, and, indeed. an indicated at
tempt on the part of most of the
countries not on gold to limit their
effects. In other words, the delib-
erately inflationary policy Of the
non-gold countries is being arrested
Initiation Possibility.
When we turn to the gold bloc
countries We find the real possibility
Of further worldwide imitation. The
chance of any of them, but most
prominently France and Italy, TO stay
on the present ratios for another u
months is naturally dubious. That
this would be Immediately inf1a-
tionary, especially upon American do
! mestic prices, would be unlikely were
1t not for the fact that Great Britain,
and very likely the United States,
| would. in all probability, devalue
themselves to some extent. This
would mean. naturally, higher prices
for virtually all commodities.
Thus we have the possibility Of a
deSeration Of the gold standard by
the gold bloc as a very real possibility.
Indeed, the likelihood that such an
event might at any time take place
is itself sufficient to warrant numer-
GUS rallies from time to time.
Now to consider the possible en-
hancement of prices on a gold basis.
It is probable that crop reduction
plans will be in the ascendant in most
countries, but this will be to a large
extent Offset by flood the market"
| policy on the part of a recalcitrant
few. Thus we can look for no gen.
eral rising trend in the world price
level in terms of gold.
To consider individual commodi-
ties. Four important commodities
have made notable advances during
the year. In the cases of cotton and
| rubber. the extent Of the rise has
not been publicized so extensively,
due to the fact that the price in
cents is low as compared with corn
and wheat. However, percentagewise
the gain was greater, and what is
more important, the gain was even
greater in proportion to the total
historic range Of cotton than in the
case Of wheat or corn.
Wheat, Rubber to Gain.
Considering them individually, the
| most likely gain would seem to be
in wheat and rubber. To consider the