-^•■-v.r. 



<^- 



Item \9k'^ l^lflf 



(Million bushels) (Million bushels) 



All wheftt 508 . 6 ^^^ »f 55 . 5 



Oats 578.5 *f99.6 



Barley I56.5 199-7 



Rye 6.0 8.5 



Mixed grains 1*6.8 57.^ 



• -^ 



China demoralized by inflation . A press association report from Shanghai 

 says that the October price index was ^K) times higher than the 1956 level. The pur- 

 chasing power of the Chinese dollar is only 2.5 cents. The Wage Arbitration Board 

 that made this report attributed the rise to an Influx of U. S. and Chinese money, 

 suspended production, population Increase and hoeui^ing. 



On the same date Chester C, Davis, president of the Federal Reserve Bank 

 of St. Louis, said that the material eucid human resources of the United States must be 

 used to the fullest possible extent if we are to live under a 500-bllllon-dollar debt. 

 He said that the present money supply, consisting of time and demand bank deposits 

 and currency in circulation, totaled I70 million dollars, which is three times the 

 high point in 1929# the peak of the business boom. Mr. Davis said, **We cannot gauge 

 the power of the force. The inflationary potential is so great that the only thing 

 we can rely on is fast and Abundant production.". 



Prices depend upon the relationship between the quantity of money people 

 have and are willing to spend and the quemtity of goods and services available. That 

 is illustrated by the Chinese situation and is the basis for Mr. Davis* concern. 



Latin American monetary reserves increased . The ability of foreign coun* 

 tries to purchase goods in this country depends on their holdings of gold and the 

 equivalent of American dollars. Since August 1959 the monetary gold reserves of the 

 Latin Americas have increased tremendously. They are now about four times the prewtfir 

 level. The largest rise was in Argentina; Brazil ranked second and Mexico third. Gold 

 reserves also increased by a large amount in the Union of South Africa and Switzerland, 

 In contrast to this, the holdings of many other countries, chiefly the belligerents, 

 were reduced substeuitially as a result of the war. Britain is borrowing at least four 

 billion dollars from the U. S. to bolster her depleted reserves and to provide operat- 

 ing capital. 



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OiJtwd 

 12/6A5 



