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The following table shows the movement in the wholesale prices of raw commodities and of manufactured commodities, month by month, from January, 1900, to December, 1910. A description of the two classes will be found on page 311.
RELATIVE PRICES OF RAW COMMODITIES, OF MANUFACTURED COMMODITIES, AND'
OF ALL COMMODITIES FOR EACH MONTH, JANUARY, 1900, TO DECEMBER, 1910.
The course of prices of raw and manufactured commodities from January, 1906, to December, 1910, is shown, by months, in the graphic table which follows. The years 1900 to 1905 are omitted for lack of space.
INFLUENCES AFFECTING PRICES.
No attempt has been made to investigate the causes of the rise and fall of prices. The aim has been to give only the prices as they actually prevailed in the market and such summaries thereof as appear necessary. The causes are too complex, the relative influence of each too uncertain, in some cases involving too many economic questions, to permit their discussion in the present report. An enumeration of some of the influences that cause changes in prices may be of interest, however. Such influences include variations in harvest, which not only contract or expand the supply and consequently tend to increase or decrease the price of a commodity, but also decrease or increase, to a greater or less degree, the purchasing power of such communities as are dependent in whole or in part upon such commodity; changes in demand due to changes in fashions, seasons, etc.; legislation changing internal-revenue taxes, import duties, or bounties; inspection as to purity or adulteration; use of other articles as substitutes—as, for instance, an advance in the price of beef will cause an increased consumption of pork and mutton and, it may be added, a probable increase in the price of both pork and mutton; improvements in methods of production which will tend to give either a better article for the same price or an equal article for a lower price; cheapening of transportation or handling; speculative manipulation of the supply or of the raw product; commercial panic or depression; expanding or contracting credit; overproduction; unusual demand owing to steady employment of consumers; short supply owing to disputes between labor and capital in industries of limited producing capacity, as in the anthracite coal industry in 1902; organization or combination of mills or producers, thus enabling, on the one hand, a greater or less control of prices or, on the other hand, economies in production or in transportation charges through the ability to supply the article from the point of production or manufacture nearest the purchaser. No conclusion can be formed safely as to causes without an examination of the possible influence of several—in some cases, perhaps all—of these causes. For example, the various internal-revenue and tariff acts have, in a marked degree, no doubt affected the prices of proof spirits, of tobacco, and of sugar; but, on the other hand, they have not been alone in their influences, and it probably would not in all cases be accurate to give the change of tax or duty as representing the measure of a certain and definite influence on the prices of those commodities.
EXPLANATION OF TABLES.
The general statistical tables of this report are three in number, entitled as follows:
1.-Wholesale prices of commodities from January to December, 1910.
II.-Average yearly actual and relative prices of commodities, 1890 to 1910, and monthly actual and relative prices, January to December, 1910, and base prices (average for 1890–1899).
III.—Yearly relative prices of commodities, 1890 to 1910, and monthly relative prices, January to December, 1910.
Table 1.- Wholesale prices of commodities, January to December, 1910, pages 362 to 411.—This table shows in detail the actual prices from January to December, 1910, as obtained for the several commodities embraced by this report.
In 1901 the Bureau of Labor collected data relating to the wholesale prices of the principal staple commodities sold in the United States for the period from 1890 to 1901, inclusive. The actual prices for the 12 years and the relative prices computed therefrom were published in Bulletin No. 39, issued in March, 1902. The purpose of the investigation was to furnish a continuous record of wholesale prices and to show the changes in the general price level from year to year. . The investigation thus begun has been continued each year and the results published in the March issue of the Bulletin to show actual prices for the year immediately preceding and relative prices for the period since 1890. The present Bulletin contains actual prices for January to December, 1910, and relative prices for the 21 years from 1890 to 1910.
In these reports wholesale prices have been presented for a large number of carefully selected representative staple articles secured in representative markets of the United States. That it would be impossible to secure prices for all articles in all markets is obvious. In the present report prices are given for 257 articles. With few exceptions these articles are of the same description as those which have been covered in the preceding reports on this subject, though several commodities shown in the data for 1908 to 1910 were not included in previous years.
There is not space within a Bulletin article to publish in full the actual prices for all commodities for the entire 21-year period. Prices for 1890 to 1909 may be found, however, in preceding March Bulletins of this Bureau.
It is important that the greatest care be exercised in the choice of commodities in order that a simple average of their relative prices shall show a general price level, and it has been the aim of the Bureau to select only important and representative articles in each group. The use of a large number of articles, carefully selected, minimizes the effect on the general price level of an unusual change in the price of any one article or of a few articles. It will be seen that more than one series of prices have been given in the case of articles of great importance. This has been done for the purpose of giving weight to these important commodities, no other method of accomplishing this having been found satisfactory by the Bureau. The same means have been employed by Mr. Sauerbeck in his English prices, as explained in Bulletin No. 39, and the approximate accuracy of the same, as an indication of the variation of prices, has been proved by various tests based on the amount of production, etc.
Various methods of weighting have been attempted in connection with compilations of relative prices. One method employed by European statisticians is to measure the importance of each commodity by its annual consumption by the entire nation, the annual consumption being found by adding to the home production the amount imported and subtracting the amount exported. The method employed by the Bureau of Labor in its publication of Retail Prices of Food in the Eighteenth Annual Report and in Bulletins 59, 65, 71, and 77, consisted in giving to the various articles of food an importance based upon their average consumption in normal families. While it was possible to determine the relative importance as far as the consumption of food is concerned, there are, of course, many commodities the importance of which can not be measured by this method. The impossibility of securing even approximately accurate figures for annual consumption in the United States of the commodities included in this compilation renders this method unavailable for the Bureau.
It has been thought best in the present series of index numbers, after a careful consideration of all methods of weighting, to use simply a large number of representative staple articles, selecting them in such a manner as to make them, to a large extent, weight themselves. Upon a casual examination it may seem that by this method a comparatively unimportant commodity-such, for instance, as tea-has been given the same weight or importance as one of the more important commodities, such as wheat. A closer examination, however, discloses the fact that tea enters into no other commodity under consideration, while wheat is not only quoted in the raw state, but enters into the two descriptions of wheat flour, the two descriptions of crackers, and the three descriptions of loaf bread.
In securing these prices an effort has been made to include staple commodities only. In a number of instances it was found possible to continue prices for the same commodities that were included in the Report on Wholesale Prices, Wages, and Transportation, submitted by Mr. Aldrich, from the Senate Committee on Finance, March 3, 1893. Many articles which were included in that report are no longer manu