﻿THE PRICE LEVEL

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trolled group, and to leave the combined price of
“ all commodities ” practically stationary. It is
true that this method of comparison, “ in order to
make continuous series of index numbers which are
comparable, necessarily treats some commodities as
controlled before they were actually under control.”
But allowance for this discrepancy, while affecting
the extent of fluctuation, will not change its general
character.

(2) Since December, 1917, prices have risen —
at first considerably; more recently, with some ap-
proach to violence, and without any symptom of
prospective arrest or reversal. Wholesale prices
were 14.3 per cent, higher in September, 1918, than
in December, 1917, as compared with no advance
whatever for the preceding seven months; the cor-
responding percentage for “ lagging ” retail food
prices was 13.4 per cent, as compared with 3.9 per
cent, for the earlier period.

This advance might hypothetically be imputed to
an increase in the volume of currency — at least to
the extent that the repressive factors (a period of in-
cubation and price-fixing activity) operative in the
preceding months should after December, 1917, have
ceased to the same extent to mask or counteract the
price-rising tendency.

As to the period of incubation: By reasonable al-
lowance a sufficient time would have elapsed by De-
cember, 1917, to permit an increase in the volume
of currency associated with our war borrowing to
begin showing itself in higher prices. Continuation
of this currency expansion with the progress of cer-
tificate borrowing and notably with the increasing