Wholesale Prices

The whole world, witnessing the ease in the American money markets and our superabundance of gold, has been watching for our commodity prices to rise under "gold inflation." Thus far, however, it has watched in vain. Indeed, according to the U. S. Department of Labor indices of wholesale prices for June, commodity prices in this country were falling instead of rising. The index weighted index number, which includes 404 commodities, fell to 144.6 for June, from 146.9 in May and 153.5 for June, 1923. It has declined steadily since February, 1924, when it was 152.

The drop of prices during June was caused chiefly by declines in farm products from 136 to 134, in food from 137 to 136, in fuel from 177 to 175, in metals and metal products from 134 to 132, in building materials from 180 to 173, in house furnishings from 173 to 172 and in miscellaneous from 112 to 111, compared with the previous month of May, 1924. On the same comparative basis, clothing remained unchanged at 187, and chemicals and drugs at 127. As between May and June last, of the 404 commodities checked, there were 137 decreases, 103 increases, and 164 cases where prices did not change.

What the same index will show for the present month is, of course, conjectural at present. Farm products will be higher, of course. Yet it is obvious that the advance in grain prices is not due to "gold inflation" but to crop failures. The prophets of American inflation may ultimately be right, but so far the facts give little comfort to their theories.