The Clink of Pennies

At 9:30 a.m. the gong rang, signaling, the start of trading in the Chicago Board of Trade. Half an hour later, the pits were a pandemonium of roaring voices and flapping arms. Selling orders had flooded the exchange. At 10:15, traders yelled "Basement!" which meant that May corn had fallen 8-c-, the legal limit for one day. Within the next few minutes, May oats had dropped their limit of 6-c-, May wheat its 10-c- limit. It was the first day of a break in commodity prices which stirred the market as nothing had in two whooping years. The New York Stock Exchange slumped sympathetically.

In Washington next day, Harry Truman faced White House correspondents. As though nothing at all had happened, he reiterated his old arguments for Government price controls. He displayed a chart of rising prices. The food line ran clear off the top of the chart--up to 203% from an average 100% in 1935-39. If we don't find some way to stop this awful spiral, the President said briskly, a crash will be the inevitable result.

Was the price break the first distant thunder of that crash? The rumbling continued for four days, then some prices firmed up. Experts pondered the reasons for the break (see BUSINESS). They were not sure of what it might bring. They did not, however, believe that it was the beginning of disaster. "We haven't gone over the cliff," said a Washington economist. "We've just hit a bump in the road." Despite the fact they had taken huge paper losses in the last few days, farmers showed no sign of panic. They confidently expected prices to go up again.

Republicans were quite happy. The break showed that prices could readjust themselves, and without the controls which G.O.P. leaders have consistently opposed. Even Bernard Baruch, who recently recommended far-reaching controls (TIME, Jan. 26), begged off from testifying before the Senate Banking and Currency Committee until he had time for another look around. He wired Committee Chairman Charles Tobey: "There is evidence, superficial perhaps, but existing, that commodities show a tendency to soften. Were that to come about, the need for control would be less pressing."

The happiest people in the land were the people with market baskets. As they went to the stores this week, retail prices were spotty, but some were down: bread, down 1-c- a loaf; bacon, down 10-c- a pound, flour, down 16-c- to 17-c- a 25-lb. bag. These were only pennies, but the clink of falling pennies was music in housewives' ears.

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