Document 2jrXkOjo16ogXVgO0R6wOe7kb

. ^TMUkifiV T-- ' r r`-',*tilkT':V-ih:-' / - a i)ii`.-- *--* . m& a ... tctc^tcw 'STRESS* -- 6r Joel H, Bowlty Chaiimsn of tbs Board Tho a*l-Plchar Coa^snf Cincinnati, Ohio 4 Tbs study which Is tbs subject of ty talk today cesqjrlsss A 37-fwar period fro* 1J1L through 1950. In order to onablo you to follow WT discussion, 1 bsvj had eopias m-de of too various eharta and tabloo and hare distributed them aacrg pen. Prices arc expressed In cants per pound sad aro the wholoaal# prices st Vow Tork for dosllvcrlsod load and Prlmo Kostorn slab sloe. I rc(T\.t East St. Louis aloe prlou* worn not esod, but I did not have tbo time to moko tbo nooosaai7 revisions In all tho exhibits. Chart X shows thu relationship between load and tine prlcos during tho period under rorlo) whllo Chart B shows tho corresponding rolatire morenonta of lead, sine and ^wlcsda coanodity priest In guncrtl* Tho whale sale eonwyalty price lmdox Is an r,,ro of 539 commodity prices put on 1926 btsla - that is, tho 1926 prlco of oach comodity Is assumed to reprssent pari ty for that coovodity. Thereforo, rdatlvo movements In this coepoalto Index aro measured aa a peroostago of tho 1926 whole sale prlco level. Sidlarljr, tho load and sine prlco lnd-rma aro oxprosmod as s percentage of tho 1926 prlco* Tbs data upon which Charts A and B aro basod arc given la Tablo I. All data aro talon from bulletins of tbo U. 3. Burean of Labor St* tittles sod aro annual average* of monthly data* It will bo noted from Table I that, in six ot the twelve ymars prior to 1926 - 1917 to 1920, Inc., 1922 and 1925 - the gonorsl comexlity Index was In excess cf parity. In tho toao period, sine like-wise cm* cojdod parity la six years - bat not tho smo tlx yoars - 1915 to 1918, Inc., 1920 and 1925* Load, however, oxcuoded parity In only two years m 1917 and 1925 - and than bat slightly (106 la cash yoar). In tho 2U years subsequent to 1926, the general oomodlty Index remained bolo"' parity until 19L3, when it began an advance which rcachod a high of ICO In January 1951* Zinc boa its advance in 19LI, and la January 19>1 stood at 236. Load aaln la ;ed nnd did not axcood parity until 19L7 and roachod 202 in January 1951* Tho low points in all tlxoo scalos occurred in 1932* The January 1951 prices reproeant increases of 1763 In thj joneral ccxwwcxtity list, L51S for tine, and L313 for load* Thus* lattor figures, ho^rror, oenvegr s sooewhat erroneous lmfrsasloa. Bad the metals aaictsinod thoir normal relationship to tho general eomodity lndooc, tine would havs boon prlood at about 5.06 eonta par pound In 1932 and load at L*12 eonta* On this basis, tho lncroasos would have boon only 25S3 for tire end 3135 tor lsd -- still, hr--:'war, substantially in oxoosa of tho lncrcaao la tho general prloa k>vd* Prssontod at the 23rd Annual Hosting, Load Iwhtatrloa Association, Hay 16, 1951, *ow fork. Bow Tork* m ,%KM ** . .I*. _ ih -wiftfei i- r W- n uti IV-1,'tlhfito ,-| ii ------ --------------------------- . f . In ordor to determine whether any sort of * prodso mathe matical relationship hi] existed button tho metal prices and tha whole atlo price larel, tha tot 1 lndaxs* ware plotted against tbs wholesale prlco levwl in aeattcrjrans as shovn on Cherts C and 0. Each dot on the aeattargran represents a pairing of valuoa for ono yonr, If there nad boon a prweiso motbcmctieil relationship botuoua the fluctuations of the two series, tho dots would h-rj all fullsn ilthin tho solid linos on tbs Charts* Of course, It is lnconcaivanl* that ergr two sots of eoonoais data would show this precise rolat'onahip betw.ua thoir fluctuations* &>wev*r, tho dots do show a tendency to ranryt upward and tho solid lias ropresonts an expression of this tendency ts sa crarnro relationship between tho fluctuations of general ccmwjdliy price* and metal prloaa* Those scattorvraas do present tho fluctuations end variations of tho respective price levels in cn Uluainatlnr sunr, ovwn though tha^ may not impart my information with which you are not alroa^y familiar. The dots representing certain specific years htTo boso la* dlcatad on the charts, for 191? and 1916, for axr-plo, it will bo notad that tine prices far cxcoodad tho (moral prloo level (up in the 160190 area on the chart}j idiilo lead price* buggod the aolid line vary closely. In 1916, 1919 and 1920, both metals ucro bolow tho sonaral lavol in substantially the saso relationship. I have similarly indicated tho years from 19h7 to 1950 and January 1951, so that you may readily sco the relationship of tha advance In actal price* to tha oorrospoofllng advance in t_>o gancral wholesale price level* I had hoped to bo abla to draw some conclusions from these data as to tbs xohchle future courso of motal pricos under certain assumed condition:. Tha basic difficulty in Croria; such conclusions 1s tb> fact that, from tbs ocoooclst's viewpoint, cotal. rricos are already too high in relationship to Uu ganir-J. price lavul. Based on their interpreta tion of thia tire,-1 relationship, tine should have sold in January 1951 st about 11# a pound and lead at 13i#. On tho saoo basis, to Justly prosent metal prices, the (onord comodity index should rlso about 25% to 225) and it ><culd roqulro a rlso of Sof to 270 to warrant a load prloo of 20 3/1*# end a line price at 21#. ** * :iv-t: ****?;, ^ LIA162A2 pffWWW**** ^ " im"mm '^ w ^w^ w wawp iiw p p iy ' ip ii mp |npi|. ji'^warTwwiiw.miyi .n wp i j p - w a . -AiL-r- rii-.., -'ifa lir uriinffi bttr " "'ifrifiiiinfin-iiir 'M ` rt. Thl X vxusju naca x> d c c o b \ i ------------------ nzs----------------- *ga------------r 2U TEJJL Prica Indax Frt.o* Trv^x caoccmB f (# par lb.) (1926-100) {# per lb.) (1926=100) (1926100) i I 191b 3<9 10 50 68 68a 1915 bO 51* ibO 187 690 . , i, 1916 6.8 A lb.0 182 850 f v% 1917 9A 108 90 120 117 O 1916 7J 68 80 107 1310 1919 50 69 7b 96 1380 t 1920 19a 8a 96 b.6 5b ea 105 5a 67 152*0 9 70 - 19a 1923 19a 1925 50 69 70 88 80 98 9a 106 6a 79 7.0 91 6.7 87 8.0 10b 96.7 loa.5 9a 1030 t i 1926 30 100 7.7 100 100.0 19^ 6.8 80 60 86 950 1926 60 75 60 83 96.7 0 1929 6.8 81 60 89 950 1930 19a 1932 1933 50 65 bO 6b lu2 50 UO 52 3.2 38 30 b2 3.9 b6 58 86a 73.0 filltS 650 193k 1935 1936 1937 30 b6 1*0 59 i*a W b.7 61 b.7 56 50 69 6.0 71 6.9 89 7K.9 60.0 80.8 860 1936 1939 191*0 191*1 b.7 50 5a 60 5a 61 50 69 5.0 65 5.5 71 6.7 87 70 102 780 770 78.6 870 191*2 191*3 60 77 60 77 8.7 112 8.7 112 9.8 icoa ! t 19U* 60 77 80 112 iou> 191*5 60 77 60 112 lego ?: 19(i6 8.2 97 9.2 119 ma L 191*7 11*. 7 la li.O 11*3 152.1 191*8 191*9 isa 150 21b 182 11*0 12.6 18b 167 165a 155.0 f f fr 1950 130 158 11*0 189 1610 * 19a (Jan.) 17.0 202 18.2 236 uoa Sourcet 0.3. Bureau of Labor SUtlatica. Prica* arc Daailroriaad Load and Priaa Paatarn line at Na latlt m 0 mmmm mmmm o wmmm LI A 16 24 3 aihii^ManaiilrWt - i<nimii>'.iiii'i nmiii-'i'ir Q m*  *- *"* m f*"PP JlUlliUllJIIJ^P ...II O cam it TOouaiLi mcs mczn (iw * 100) . .-fai^)MMuaHdjaeiS "pgryp^a' >'.. "."", ijmip^w>B|gywpp>pi!sy^;ppipgywwwwi -..j, rrti;fftfiarfc. ia CSrt D IMMWfP LIA162A5 **n i 'i| W w* t *i* i" * * * * * u i *fw iwpw1"" 11.^ a w -1 ^iWj-'^:>giWH^.CL4.i_jayilWgBMBBgMg>S^M>paMiiiL jujy A I I i r * t. p ? L > * I'.# *' muf