Commodity Chart

Inflation means different things to different people--breadlines, bushel-basket currency, ballooning credit or simply whacking good times. Whatever the discord in definition, there is perfect harmony on one point: inflation means higher prices for all. Oddly enough, there was much more talk of inflation two or three years ago than there is today, when prices are mounting faster than at any time since the post-War "boom."' That "boom" in good measure was pure inflation brought on by War financing, and the subsequent collapse was highlighted by a terrific crash in commodity prices, just as the last depression was by plummeting security prices.

It was hardly time to start drawing a parallel with 1920, but by last week the commodity chart was receiving from U. S. businessmen an attention usually reserved for the stock tables. The upsurge in commodities which got under way last summer and developed into the most significant economic trend of 1936 has not carried through to any important extent into the general retail price level. Nor do all merchants expect the retail rise to come this spring. In Montgomery Ward's spring & summer catalog, out last week, mail-order prices were actually down by about 1%.

Price rises in such great world staples as wheat, cotton, rubber and copper have been as thoroughly publicized as the Roosevelt bull market. But the world is full of a number of things just as important to industrial civilization as staples. For a broad view of commodities the businessman leans on the big wholesale price indices, typical of which are those computed by Dun & Bradstreet, the Department of Labor and the Annalist, financial weekly published by the New York Times. Last week a 23-year picture of these indices looked like this:

1914 1920 1925 1933 1937

Jan. Jan. March March Jan.

Dun's . . . . 124 247 202 128 207

Annalist . . 98 233 161 82 139

Labor . . . . 60 158 104 60 85

These indices differ because they are figured on different bases. Dun's was started in 1860, is compiled from more than 200 items. The magic base of normality--100%--is not used. Instead, figures expressing a total in which each item is "weighted" according to per capita consumption, allow the index to run where it will. For customers used to the Bradstreet index started in 1892 Dun & Bradstreet also computes the combined per-lb. prices of 96 items. This monthly index was at $6.35 in March 1933, is now at $11.14. The Annalist uses a long list of commodities with 1913 as 100. For its old-fashioned readers the Annalist also calculates its wholesale commodity price index in terms of old gold dollars. Last week, in Roosevelt dollars, the index stood at 139.3, in Hoover dollars at 82.3.

The Department of Labor's wholesale price index, which is comprised of 784 items ranging from women's union suits to pickled herrings, uses 1926 prices as 100, tends to sluggishness because of its size. Of ten major groupings, foods have the biggest weighting-- 20.47% of the aggregate value of the list.*

Over long periods these indices reflect the totality of commodity price changes, but they often lag in revealing price trends over periods of less than a year. For daily distribution by the United Press, a more responsive index is compiled by Dun & Bradstreet from the spot prices of 30 basic commodities. This roster of prices (with 1930-32 as 100) was at 68.51 in March 1933, at 129.96 last October, and by last week was up to 144.62. The Associated Press compiles its own index of 35 commodities for its member newspapers. From a depression low of 41.44 (February 1933) the AP index last week had risen to 90.42.

Moody's Investors Service computes an index from 15 spot prices, makes Dec. 31, 1931 equal 100. Last week the Moody figure touched 210, up from 183.6 the day after Franklin Roosevelt was re-elected President last November. Yale's Dr. Irving Fisher has a weekly wholesale price index which last week was at 90.7, up from 84.5 before election.

For Wall Streeters and LaSalle Streeters, even these smaller, faster spot price indices are not sensitive enough to catch the pulse of trading floors. Dow-Jones puts out a daily index of eleven commodity futures, all except three of which are farm products. This index was at 57.22 on Dec. 31, 1935, at 80.03 a year later--up 40%.

Biggest fuss last week in the commodity markets which the bounding indices reflect was in copper. Metal prices at home and abroad have been rising dramatically since early autumn. Fortnight ago copper's sister non-ferrous metal, tin, was placed on virtually a 1929 production basis by the tin cartel (TIME, Jan. 18). Last week, with export copper selling as high as 12.75-c- per lb., the international copper cartel called off production quotas to keep the price of the red metal from soaring higher and to discourage reopening of low-grade mines.

*Other weightings: farm products, 17.60%; fuel & lighting, 16.16%; metals & metal products, 15.04%; textiles, 8.01%; building materials, 5.47%; leather, 3.16%; housefurnishings, 2.62%; chemicals & drugs, 1.86%; miscellaneous, 9.61%.

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