constructional facilities. Thus there arose a greatly increased home call for foods, for textiles, for metals, and for wood. Fundamental to all industry is energy. The energy derived from water can not be readily increased suddenly; and therefore the increased requirements must be met by coal. This particular demand came rather slowly; and it was not until the middle of the summer of 1916 that a shortage of coal appeared probable. From the middle of that year, the demand has exceeded the supply, and exerting every effort, for 1917-18, it is estimated that the supply will be 50,000,000 tons short of the needs, although the production has been largely increased.
Mounting Prices
It thus appears that, in consequence of the World War, we have an absolutely new situation in this country—one in which there is demanded more of every essential commodity than the country is able to supply. Because of this radically changed situation prices began to mount, rather slowly for most commodities until about July, 1915; but since that time for two years rapidly and at an accelerating rate. Prices at about the middle of 1917, as compared with those three years earlier, just before the outbreak of the war, for a number of the most important commodities, were roughly as follows:
Meat animals and meats, 25 to 75 per cent. higher.
Wheat and flour, two and one fourth times as much.
Corn and cornmeal, an increase of 80 per cent.
Potatoes, an increase of about 60 per cent.
Sugar, an increase of 75 per cent.
Cotton and cotton yarns, an increase of 75 per cent.
Wool and worsted, two and one third fold.
Bituminous coal, from two to threefold.
Copper, about two and one half fold.
Pig lead, about threefold.
Pig iron, about three and two thirds times as much.
Steel billets, more than fivefold.
Spelter, nearly double.
Petroleum, an increase of about 75 per cent.
The Causes of Mounting Prices.—The fundamental cause of the mounting prices is that which has already been explained, an unusual and extraordinary demand at first abroad and later at home for all essential commodities; but this has been only one factor in the process.
When it was generally appreciated that there was likely to be a shortage of the essential commodities, the home purchasers, instead of buying ordinary amounts, purchased in advance of their needs. Thus the family, instead of buying flour by the sack, bought a number of barrels; or, in some instances, bought flour for years ahead. The same was true for sugar. Similarly during the spring and summer of 1917, when it was appreciated that there was a shortage in coal, many manufacturers tried to protect their business by accumulating reserves to carry them through the winter. Many of those who required coal for heat did likewise.
The consequence of the unusual buying campaign was that the demands of purchasers were far beyond what would have been necessary to meet actual needs, had the ordinary procedure been followed. This frenzy of excessive buying greatly aggravated the situation.
Another important cause of the rising prices was that a time when there is an extraordinary demand is especially advantageous for speculators to accumulate larger stores of goods of various kinds and hold them for advances in prices. This
