Henderson daily dispatch., 1937-08-06

costs are not an alarming sign unless
they Out-distance the improvement In
wholesale prices and in national in
come. So far this has not been the
case. E
At wholesale, food prices have re-
corded SO per cent mark-up since
the low of 1933.&sAt retail, food is Al
per cent highef* clothing costs are up
II per cent. shortage of good house
space and ths&high cost of building
have lifted reIt&sA38 per cent over the
low Househe Furnishings are also
considerably MgIer-about one-fourth
Miscellaneous items are now slowly
pushing ahead, but fuel and light re-
main almost unchanged from the de-
preston lows. In the last six months,
rents and clothing have led the pa
rade. Yet living costs have not match
ed the rise in the general price level
or in the national income
Gap Should Narrow
The really astonishing fact is that
living costs have not jumped more
than they have. Against the total in
crease of "a per cent, wholesale prices
have been pushed ahead 46 per cent
e~AAN IAAS A4e%CAOAAeS4 AA1COA4AO Ac&O AACcA ~
doubled. The logical outcome to ex-
pect now is that this gap between
wholesale and retain prices will grad
ually narrow. Take bread for in
stance. The price today is only nine
cents loaf-up "a per cent from the
1888 low. Yet, the basic Ingredient
wheat-has jumped IT'S per cent in
price. But the other costs of bread
making, such as milk, salt, overhead,
trucking, and taxes have not been
boosted as much as wheat Payrolls
and taxes are the ingredients" to
watch! Furthermore, better volume
has helped to offset some of the high
e,' "other COSTS" $50
Gradually all these "other charges"
are slowly edging upward. Replace
nent of machinery, general repair
work, and host of miscellaneous man
ufacturing costs, which are not SEN
sltive, are all moving ahead. Sooner
or later bakeries will have to jack up
the retail price of bread again. The
same is true of many other "con-
sumner" business. Even sharp changes
in the price level of sensitive commo-
dities take many months to seep down
through the entire economic system.
Readers 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 de-
preston. For this reason. commo-
dDty price adjustments are always
painful and upsetting.
Efficiency Takes Up Slack
Readers may well ask who has alb
sorbed the tremendous difference in
the wholesale and retail price. levels.
Raw material producers are doing.
Nbettera wholesalers are prosperous
again; labor is better off; and manu-
facturers are reporting excellent earn
lngs. The answer to the mystery is
that the increase in volume has re-
duced the cost of production. Every
industry does better doing huge bus
mess at a small profit than by doing
a small business at larger profit. In,
creased efficiency all along the, line
has enabled business to take care Of a
portion of the higher, operating costs
without passing all along to the con-
sumers. This is why it has been pos
sible to increase wages without in
,creasing 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 increase in labor, material
and overhead costs. How much such
mark-ups will boost the cost of living
this fall and winter no one can say
definitely. I 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 in
ventors are our only hope for keeping