( 160 ) 



vidual with heavy eyebrows, who is said to be interested in 

 the labor movement, apparently knows his price history and 

 aptly summarized the effects of the five factors on prices 

 during a major war : 



"Inflation to some degree is a definite concomitant of any 

 war. It [war] . . . destroys material . . . [and] manpower 

 . . . creating . . . higher values of remaining manpower 

 and materials. To think now that a war can be fought of the 

 magnitude of this globular effort without resultant inflation 

 to some degree is to fly in the face of history and all known 

 economic facts." * 



Food Prices Fluctuate with Other Prices 



Food prices fluctuate with the general level of commodity 

 prices because they are affected by the same forces that af- 

 fect other prices. This is true in time of war and in tune of 

 peace. During the Civil War all prices rose 117 per cent and 

 food prices rose 112 per cent. During World War I all prices 

 rose 128 per cent and food prices rose 113 per cent. 



During the deflation that followed the Civil War food 

 prices fell 52 per cent and all prices fell 53 per cent. When 

 peace was re-established at the close of the Civil War, prices 

 in the United States fell for two reasons: the return of the 

 depreciated greenbacks to their gold parity, and a general 

 decline in world prices. 



After World War I food prices fell 55 per cent and all 

 prices fell 58 per cent. Since the United States was on the 

 gold standard following World War I, most of the decline 

 was due to declining world prices. 



Most of the variations in prices of food products are due 

 to the same forces that cause the nation's whole price struc- 

 ture to move upward or downward. Similarly, most of the 

 variations in a nation's price level are usually due to the 



1 New York Times, April 11, 1943, page 32. 



