Business: Price-Indices

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Perhaps never before in our history have business men given such close attention to the price indices for commodities. For this situation the fear of—or sometimes the hope of— "gold inflation" is responsible. The Bradstreet indices for July 1 showed a smart upward trend, which the weekly index numbers of Prof. Irving Fisher (Yale economist) have corroborated. The publication of the wholesale price indices for commodities by the U.S. Department of Labor—considered by many the most scientific price index available—now reaffirms the upward price tendency.

For July, the Labor Department's index, covering 404 commodities, registered 147.0, compared with 144.6 for the preceding June, and 150.6 for July, 1923. Last month's was the first upward tendency shown since February, 1924. Of its nine principal commodity group indices, four declined, one remained unchanged, and four rose. Fuel and lighting fell from 175 last June to 173 last July, metals from 132 to 130, building materials from 173 to 169, and house furnishings from 172 to 171. Chemicals and drugs remained unchanged at 127. But farm products shot up from 134 to 141, food from 136 to 138, cloths and clothing from 187 to 188, and miscellaneous commodities from 111 to 112. As between the same months, of the 404 total commodities covered, 173 showed no change in price, 106 showed increases, and 125 showed decreases. It is apparent that as yet, the evidence of coming "gold inflation" is inconclusive. One indication of the possible breadth and scope of this coming tendency is the number of prominent American bankers, business men and government officials who have this summer gone abroad to "study conditions." It is generally agreed that the opportunities for profit are large. European manufacturing plants, especially in Germany, are reported in good shape. Labor is highly trained, abundant and heartily sick of Bolshevism, provided that employment at fair rates can be obtained. Most practical business men are fully aware of the fact that when industry is sound and lacks only capital to prosper, the investor who provides the last dollars needed secures the greatest profit, and does so most quickly. What has been true of American corporate reorganizations, it is felt, will also be found true of similar reorganizations of the basic and established European industries, with this country filling the role of financier.