-2- 

 control for some time. Trading in cocoa was resumed Wednesday noon, 



'^ but coffee and pepper remained closed. 



Top prices for choice steers reached $lk- Wednesday and 

 Thursday, and hogs made a new top of $11.20 Friday. Egg prices made a 

 nice recovery from last week, but butter gained only about one-half 

 cent. 



One of the contributing factors to the price rise, particularly 

 of wheat, was Senator McNary's statement Thursday, that no price control 

 legisla.tion would be considered before January. Price control legis- 

 lation is the only factor that was expected to be made available in 

 time to prevent further price rises of farm products. 



The effects of the war . The tendency dxiring the major wars 

 is for prices to rise, largely because additional purchasing power is 

 provided by means of government borrowings from banks on an immense 

 scale. Wages tend to rise because of the greatly increased demand for 

 skilled labor, as the result of increased industrial production and the 

 reduction in man power, caused by an expansion of the armed forces. As 

 wages rise, costs of production rise; this increases costs of living; 

 labor asks for higher wages; and an upward spiral is under way. ^Vhere 

 war at sea is involved , costs of imported articles rise rapidly because 

 of an increase in marine insurance and transportation rates, and because 

 of actual restriction on the volume of imports. 



Prices of pepper, cocoa and other tropical products, rose 

 because of the probability of a great restriction in imports of these 

 products. Soybeans were affected because of the probable restriction 

 on imports of coconut oil, copra and other tropical vegetable oils from 

 both the Pacific area and West Africa. Keeping in mind that there are 

 nine pounds of oil to each bushel of soybeans, an advance in the price 

 of oil of one cent a pound would Justify an advance of nine cents a 



