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WAR BORROWING

tistics of the War Industries Board, with preliminary
results of the utmost significance.10

Of the 271 commodities used in the study as
representing the commodities figuring in the Bureau
of Labor Statistics index number of wholesale
prices, 78 of the series are for commodities which
by September, 1918, had come under price control.
The relative prices, weighted and combined, of the
controlled commodities as compared with (a) the
uncontrolled and (b) both controlled and uncon-
trolled commodities are shown in the following table.
Prices during the twelve months before price-fixing
began (August, 1916, to July, 1917) are taken as
a base from which to measure the relative changes.

1917	Controlled Uncontrolled All

May ................ 122	113	117

June ............... 123	116	119

July ............... 123	117	119

Aug................ 119	118	119

Sept................. in	121	117

Oct................. 103	125	116

Nov................. 104	127	117

Dec................. 104	126	1x6

So analyzed, the seeming stability of the Bureau
of Labor index number during the first period of
our war borrowing resolves itself very largely into
the masking effect of price control. The result of
such control was not merely to prevent any rise in
the prices of the commodities involved, but actually
to effect a material reduction — enough at least to
counterbalance the upward movement of the uncon-

10 Bulletin No. 10 (December, 1918) on “Fluctuations of
Controlled and Uncontrolled Prices,” prepared by Dr. W. W.
Stewart.