Evening star., 1941-05-18
Growing Threat
Of Higher Living
Costs Seen
War and Arms Drive
Moving Closer to
Every Poeketbook
BY FRANK MacMILLEN,
Associated Press Business Writer.

abroad and the arms drive at home
are moving closer to every citizens
pocketbook and the bite is already
on in what may be the beginning
of a real squeeze in living costs,
some close students of price trends
said today.
These events of the week brought
the question of prices to the fore:
l. At Washington, the Senate
followed the House in passing "85
per cent parity loans" on five key
farm commodities.
2. Wholesale raw staple prices in
the past seven days had one of the
most rapid advances for a similar
period in recent years, continuing
a trend which was well apparent
in the previous week.
3. The Nations factories were
turning out the greatest physical
quantities of goods in history, hav-
ing overcome a spring lag traceable
to the soft coal shutdown. In
consequence they were consuming
a record quantity of raw materials
and promising to take more as new
defense plants achieved production
in coming months.
Farm Staples Boom.
Wheat corn and cotton, leaders
Of the farm commodities, enjoyed
small-sized booms and. though
there was some hesitation. they were
again on the upgrade as the week
drew to a close, as the new farm
bill boosted the loan values which
the Federal Government will allow
farmers on leading crops. The bill
still awaits presidential signature.
Dollar wheat became a reality for
the first time in year, cotton. con-
tinuing an anticipatory advance
added enough to bring gains for
the past month to s7.50-s8.50 a
bale. Corn hit four-year high.
Price Administrator Leon Hender-
son called on principal commodity
exchanges to curb speculation in
coffee, cocoa, rubber and other
items not directly affected by the
farm bill, in what traders thought
was fear that price rises in do
mestic farm products would spread
elsewhere.
The Associated Press index O.
wholesale cash prices of IS repre-
sentative commodities. includir~
both farm and industrial items, no.
stands about at a top since the
autumn of 1887.
The extent to which this bulge
in the country's wholesale marke'e
has spread to the retailer and thenc-
to the householder was not yet clear.
although most observers saw evi-
dence that the familiar seepage was
under way.
The Department Of Commerce
yesterday. in figures running ONLY
up to mid-April, showed living cost
had advanced l per cent in the
preceding month, largely because Of
rise in food prices Statisticians
noted that these figures were for a
date before the greater part Of the
recent rise in wholesale prices. Fol-
prices in mid-April were about 5
per cent greater than last fall.
Sharp Gains Recorded.
Some of the individual items in
the departments compilation have
advanced Z to 20 per cent in the
past year.
The Fairchild index of retail store
prices, which does not include food
items, showed a rise in April of Z
of l per cent and of 90 per cent
compared with a year ago.
Net effect of these trends on living
scales was still in f1uX, most OBJ
servers felt. 1t was noted that wages
were on the rise in many industries,
with the $4,000 900 annual boost in
pay rolls by General Motors Corp.
this week the latest in series of
pay hikes in heavy industry.
Some Wall Street men, studying
the probable course of industrial
profits in the next few months,
noted an apparent differentiation in
governmental attitudes toward
prices of industrial raw materials
and farm commodities.
With the Federal Government,
under the -billion-d dollar
lease-lend and armament programs,
the largest single consumer of fac
tory materials, it was pointed out,
steps ranging from strong suasion
to actual priorities have been taken
to hold down values of steel, copper.
aluminium, zinc, rubber, lead and q
long list of other similar items.
Difficulties Expected.
At the same time, these observers
said, Congress and the administra-
ton apparently desire greater re-
turn to the farmer for the main
cash crops and the parity bill passed
this week is an opening wedge for
that course.
A number of students of prices
here appeared doubtful that it long
would prove practical to encourage
price rises in the principal food
stuffs while trying to hold down in
duStrial prices. They said food
costs would in the long run have to
be reflected in wages and that wages
in turn If thny iyocrooead f,,rfi,or