The daily independent., 1937-08-05
BabsOn Sees Rise
In Cost OF Living

tional income has nearly uo''o'
lied. The logical outcome 10 eX-
pect now is that this gap pe-
tween wholesale and retail prices
will gradually narrow. lake
bread tor instance. The price TO-
day is only nine cents a loa1-
I'D "a per cent from the 1888 low
Yet. the basic ingredient,-wheat
has jumped ITS per cent IN
price. But the other costs OF
matchmaking, such as milk, salt,
overhead, trucking, anu taxes have
not been boo%.ed as much as
wheat. Payrolls and taxes are
the "ingredients" to watch! Fur
thermore, better volume has help
ed to offset some of the higher
other costs
Gradually all those "other
charges" are slowly edg.ng up
ward. Replacement OF machinery
general repair work, and a host
of miscellaneous manufacturing
costs. which are not sensitive,
are all moving ahead. Soon
er or later kerleS Will
have to jack up the retail
prices of bread again. The same
story is true of many other con
sumner" businesses. Evon sharp
changes in the price level of SEN
sitive commodities take many
months to Seep down through the
entire economic system. Read
ers will probably remember that
the goods which are slow in going
up today are the same ones which
were the last to go down during
the depression. For this reason,
commodity price adjustments are
always painful and upSetting.
Efficiency Takes Up Slack
Readers may we'll ask who has
absorbed the tremendous differ
ence in the wholesale and retail
price levels. Raw material pro-
ducerS are doing better; whole
Salers are prosperous again; labor
is better off: and manufacturers
are reporting excellent earnings.
The answer to the mystery is that
the increase in volume has reduced
the cost of production. Every
industry does better doing a huge
business at a small profit than
by doing a small business at a
larger profit. Increased effici-
ency all along the line has enabled
business to take care of a portion
of the higher operating costs
without passing all along to the
consumers. This is why it has
been possible to increase wages
without increasing living costs
correSpondingly.
Now. however. I fear that the
time has come when the pinch of
higher operating costs will force
the mark-up of goods which still
do not begin to reflect the in
crease in labor. material, and over
head costs. How much such
mark-ups will boost the cost of
living this Fall and Winter no one
can say definitely. 1 would not be
surprised if total living costs a
year from now may be seven to
ten per cent above today's level
The scientists and inventors are
our only hope for keeping down
living costs.
What You Should Do Now
Therefore, the decline in COM
modify prices from the March
peak seems to have pretty well
run its course. Inflationary fact
ors and increased foreign trade
should not be forgotten. Hence,
readers should act now to protect
themselves. HouSeholders should
purchase furniture, clothing, can
ned goods, and fuel contracts now.
Tenants should renew leases for
as long period as possible at
current rentals. Remember that
we are now just entering a period
Of prosperity the duration of
which depends upon how much
we learned from the recent de-
preston. Continuing prosperity
can exist only on a foundation of
righteousness.