-2- 



^ and the short-time trend is upward. This does not mean at all that I 

 think the trend over the next few months will be downward. It merely 

 means that the long-time trend, which according to the index I used had 

 been upward throughout the entire year until October 2, had finally 

 reversed. The interpretation might be that the inflationary forces 

 had temporarily spent themselves. Actually what happened was that the 

 war situation was not improved, taxes had been raised substantially 

 and there were prospects of still heavier taxes in various forms, efforts 

 were being made to drain off income through sale of government bonds to 

 the general public, and price control was being seriously considered 

 as a means of preventing inflation. In the face of these developments, 

 the level of sensitive commodity prices stopped rising and even declined 

 slightly. Whether the upv/ard trend is resumed depends upon such de- 

 velopments as the nature of price control legislation, the extent of 

 future taxes, the ability to sell government bonds to the general 

 public without resort to bank loans, the increase in government ex- 

 penditures, disturbances to consumers* goods industries caused by 

 shifts to all-out defense, a.nd the progress of the war. 



Inasmuch as the sensitive commodity trends which I have been 

 using are of only moderate value, at the best, for forecasting, I 

 shall omit them from future market reviews unless my readers request 

 that they be continued. A knowledge of the relationship between the 

 shorter- and longer-time trends might be of considerable value to 

 traders but of little value to the person who, upon selling the product, 

 is no longer able to take advantage of later price rises. 



^k G-rain prices . All grain prices rose substantially Wednesday. 



Wheat prices rose on the basis of the possibility of shipping some of 

 our surplus wheat to Russia, The Germans have occupied a large fraction 



