172

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  uncontrolled ­
  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.