Evening star., 1941-06-29

and the man in the street Is the
upward trend of prices. In this artt-
Gle noted Federal economist dis
cuSseS this complicated subject in
plain language.
Europe has now been at war for more
than 81 months and the United States
Is not only manufacturing munitions for
export, but is expending huge sums in
building up its defenses. While it is in
evitable that this should have repercus-
sions in American commodity markets
and on the cost of living, the advance in
the general price level had, in fact, been
very moderate until the beginning OF
this year.
In the last week of December, 1910, the
Accommodates index of the Bureau OF
Labor Statistics, based on the wholesale
prices of nearly 900 products, was only
per cent higher than it had been in Au-
gust, 1899, Just before war was declared.
Retail prices had risen even less, and by
December Is, 1910, the cost of living in
American cities-inCluding rents and
services, as we'll as food, clothing and
house furnishings-was only per cent
above its August 1899, level
Situation Has Changed.
With the turn of the year, the sltua-
ton changed rapidly. Expanding CIVILIAN
demand as result of rising employ
ment and higher wages began to make
itself felt increasingly.
Operations in leading industries such
as the steel industry, had reached vlr-
tually full capacity and buyers were
clamoring for more goods of all kinds.
Practically the full available supply Of
such basic raw materials as aluminium
and zinc was needed for direct arma-
ment orders and civilian users turned to
scrap markets to fill their requirements
and bid prices up almost regardless of
value.
The shipping situation became more
acute and there were continuing reports
of further increases in shipping rates for
such products as burlap, sugar, coffee
and tungsten.
Largely as a result of these factors,
prices in almost all markets turned
sharply upward early in February and
have been advancing virtually without
interruption since that date. BY June
10 the Bureau of Labor Statistics daily
index of the spot prices of e basic COM
modities had advanced to lat per cent
of it's level in August, 1889, representing
a rise of about 20 per cent in four
months.
Basic Goods Affected.
The move was both widespread and
rapid: it included all kinds of basic
commodities, domestic as we'll as i'm
ported agricultural as we'll as industrial.
The only exceptions were virgin cop
per and zinc. whose prices remained
stable as result of informal agreements
between the industries and the Govern
ment; steel scrap whose prices were
formally fixed by the Office of Price Ad-
ministration and Civilian Supply at
levels slightly below those prevailing at
the end of 1910, and steers, whose prices
had advanced against the usual sea-
sonal trend in late 1910.
The advance was by no means con-
fined to basic commodities. 1t was evi-
dent throughout the entire field of
wholesale markets For the week ended
June IA, the Bureau of Labor Statistics
comprehensive index of the wholesale
prices of nearly 900 commodities
reached about 81 per cent of its 1926
average level, representing an advance
of is per cent since the outbreak of the
war and of fully IL per cent since the
beginning of this year.
These price advances are acute for
both domestic and imported commodi-
ties-for imports and goods shipped by
water between our own coasts, where
shipping is problem; on domestic COM
modities, like the scarce metals and
metal scrap where shortages are very