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  approach ­
  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  corresponding ­
  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  incubation ­
  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  allowance ­
  a  sufficient  time  would  have  elapsed  by  December, ­
  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  certificate ­
  borrowing  and  notably  with  the  increasing