INDEX 140 WAR-TIME PRICES OF CLOTHING AND HOUSEFURNISHINGS AT WHOLESALE AND RETAIL AUGUST 1939 = 100 120 100 80 140 120 100 80 140 120 100 80 140 120 100 80 140 120 100 80 1939 UNITED STATES DEPARTMENT OF LABOR salmon is up 49 percent wholesale, only 33 percent of which is represented at retail. Then there are dried beans, which always go up in a war period, up about 65 percent at wholesale, and only 26 percent at retail. Coffee has gone up 52 percent at wholesale and about 3 percent at retail. Lard has gone up 69 percent wholesale and only 30 percent at retail. This means, of course, that although we have had the most substantial increase in the cost of living of any period for many, many years, in the last 3 months, and last month, the consumer faces, regardless of what we do, further increases, because the man who has paid these higher prices at wholesale will pass them along, of course, at the higher rate, and they will be reflected in the cost of living. We have had extraordinarily good luck through Miss Elliott and her relations with retailers and wholesalers in getting them to average their costs; in other words, to get them not immediately to price all of their inventory at the higher wholesale prices. But there is a limit to that, and, therefore, as we go along all of these things are bound to be higher. Mr. DEWEY. What is the base line for those increases? Mr. HENDERSON. That is August 1939. Mr. DEWEY. Is that a normal base or a high base? Mr. HENDERSON. That price was the price at the outbreak of the World War. I do not have on this chart that price in relation to the long-term price, but I can give it to you for any commodity, and at the period of interrogation, if you would like to call for any of them, I have the record here for 900 commodities for a long period. Now, on the same basis, between August 1939 and June 1941, I want to take up some of the wholesale prices for the things which the average citizen buys (chart 28). Take overalls. Overalls at wholesale are up 24.6 percent; at retail, 12.8 percent. Work trousers at wholesale are up 20.3 percent, and at retail only 7.5 percent. Rugs are up 23 percent at wholesale, and at retail 21 percent, almost all of which has been reflected. Mattresses at wholesale are up 18.9 percent, and up 3.8 percent at retail. Sheets are up 25 percent at wholesale. At retail they are up only 12 percent. I have just a few more charts, Mr. Chairman, if you will bear with me, and then I will be through. Chart 29 shows real wages and covers the period before, during, and after the World War. To me the significant thing is how many dollars increase in wages was necessary to effect an increase of a small amount in the real purchasing power of the worker. At the peak in 1920, cash weekly wages in eight of the large manufacturing industries were almost two and a half times, 240 percent, of what they were in the base period, but as a matter of real wages, of what that money would buy, despite all of the negotiations for increases, despite all of the overtime and all of the special dispensations, there was only a 20-percent increase in the real wages. So it is small wonder that England, and now Canada, consider that the real question for them, as far as real wages are concerned, is to keep the cost of living down. They are paying substantial subsidies to the producers of the items that go into the cost of living in order to prevent the destruction of their price level by skyrocketing prices. I would like to say here that the eight industries to which I have referred are cotton textiles, boots and shoes, clothing, hosiery and knit goods, woolens, lumber, saw mills, iron and steel, and slaughtering and packing. Chart 30, so far as the local audience is concerned, is more impressive. Not many of you are familiar with what happened to the income of Federal employees in the District of Columbia during the last war. Some of you know that there was always a pressure on Congress for making special increases, and there was always this pressure because of the reduction in the standard of living. CHART 31 REAL ANNUAL EARNINGS By 1920 the weekly wages of Federal employees had risen to 145, but their real wages had been reduced by more than 20 percent. In other words, despite the fact that there was this constant pressure to elevate the wages of Federal employees, there was a substantial subtraction, amounting to 20 percent, in the standard of living of workers who were here during that period. Chart 31 shows the real annual earnings of all manufacturing and it is the same story; the actual cash earnings never went up commensurately with the cost of living, never got above 18 percent. For some reason or other, chart 32 is a favorite in the office. It represents the purchasing power of the dollar, the wage earner's dollar, in the last war and during the present war. In the first war, by June 1916, there had been only an 8-cent drop in the purchasing power. By June 1920, the purchasing power was |