Evening star., 1936-12-20
War Demand for Staples
Exerts Strong Pressure
on Domestic Prices.
WORLD WHEAT SUPPLY
is SMALLEST SINCE 1926
Situation for Buyer Is Eased
Temporarily by Wage Increases
and Christmas Bonuses.
BY CHARLES F. SPEARE.

NEW 1oRh, bCCCIuoVi i0' LAW
American consumer will soon realize
that he is paying the piper for the
merry dance of prices current in the
commodity markets. He is also en-
titled to know that some of the cost OF
war preparations in Europe is being
laid at his door.
For it is not alone the demand OF
domestic producers for staples, such as
wheat, cotton rubber. silk, copper and
hides, that is promoting the most
aggressive buying movement in years,
but the food situation in Germany,
Italy and Japan, a corollary Of wars OF
the past and threatened wars, and the
costly armament programs OF Great
Britain and France, which British
ministers this week have both con-
demned and condoned.
Advances Laid to Scarcity.
A condition of scarcity obtains In
some of these commodities and ac-
counts for their price advance. The
world supply of wheat is said to be
the smallest since 1926. Germany needs
1000, 900 tons to balance her re-
quirements.
She cannot get it from the United
States unless she pays for 1t in better
coin than that which she is meeting
the interest on her dollar bonds. Wheat
is IS cents a bushel higher than in
1885.
Copper is clearly a munition Of war.
1t is quoted today above IL cents
pound. This permits many of the
high cost producers. who abandoned
mine operations after the 1880 slump,
to resume.
Cotton is cent a pound above the
price of year ago. Producers of raw
materials are having harvest at the
expense of the consumer.
The steady expansion in both the
consumer and capital goods mar
kets represents the more legitimate
phase of the commodity speculation,
but it does not ease the position of the
buyer. Food prices are in their third
month of advance. The wholesale
index this week is the highest since
the Spring of 1880. It is not, how
ever, much above the level of a year
ago.
For the present this cost situation
is being eased by the great number
of wage increases. by the Christmas
bonus" and by the distribution of
extra dividends to holders of corpora
ton stocks. Since November the
total of dividends declared has ex-
ceeded $1,000, 100000 This sum
would have wiped out the Government
debt of 1914. A substantial proportion
of it is going back into retail trade.
where the expectation is for a holiday
business of $5,000,0e0, 900, compared
with the total national income this
year of S6O0OO, 10000 This is proof
that the American people are spend
ing more in proportion to their in
comes than in the era Of wide pros
perity ending In 1929.
This represents the release Of
pent-up urge to buy essential goods
and semi-luxuries permitted by re-
newed buying power. During 1898
the low average price of wheat was
As cents bushel. In 1885 it sold
around 80 cents bushel.
This week, cash wheat approached
s1.50 a bushel. The price of corn
during 1886 has been so cents bushel
higher than the low of 1885, and.
within few days. rye has been quoted
at nearly double the figure Of last
year.
This is but one of the pronounced
changes in the economic position of
the producer and explains the source
and strength of the buying power un-
der the American markets today.
Labor Troubles Likely.
At the same time, it contains
threat of trouble in the labor world.
There are now two serious and pro-
longed strikes for which no solution
has been found December unemploy-
ment. directly due to these and other
conflicts, is the greatest of the year.
Money compensation of the workers is
not always at the bottom of disagree
ments.
In a majority Of cases, the para
mount demand is for a larger share Of
business profits, these having been en-
phasized by unusual dividends and
justified by higher living costs in
prospect.
The recognized indices of business
this week all emphasize the industrial
expansion. Bank clearings were about
16 per cent greater than a year ago,
there was a sharp advance in iron
and steel production and a new all
time high for electric power produ-
ction.
One contrast between the old and
the new regimes in Wall street de-
serves comment.
This week the master magician OF
the 1880 Spring market in Radio Corp.
stock was represented in court to
answer charges for violating the pres
ent code of practice.
This is a trivial matter compared
with what had been done before under
the nose of the governors of the stock
exchange soon after the November,
1929, panic.
In spirit, this was upheld on tech
nical grounds by that body and by
Wall Street in general. There was.
in that day, little appreciation of
public point of view or responsibility
to the public.
On Tuesday last. President Charles
r. Gay of the stock exchange took
occasion to speak pointedly on the
current speculation in low-priced
stocks, which had been creating some
anxiety. This stifled an unhealthy
movement. The 1880 attitude Of the
stock exchange authorities was that
what the the public did was its own
business, not theirs.
(Copyrisht 1888. by the North American
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