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UNITED STATES DEPARTMENT OF LABOR
L. B. Schwellenbach, Secretary
BUREAU OF LABOR STATISTICS
A . F. Hinrichs, Acting Commissioner
+
Price Trends and Price Control
in Foreign Countries
Since V E -D ay
B ulletin 1S£o. 873
F or sale b y the Superintendent o f D ocum ents, U . S. G overnm ent P rinting O ffice
W ashington 25, D . C . Price 5 cents
Letter o f Transmittal
U n it e d S t a t e s D e p a r t m e n t o f L a b o r ,
B u r e a u o f L a b o r S t a t is t ic s ,
Washington, D. C., May SI, 1946.
The S e c r e t a r y
of
L abor:
I have the honor to transmit herewith a report on price trends and price control
in foreign countries since VE-day.
This report was prepared by the Bureau’s Foreign Labor Conditions Staff under
the direction of Faith M. Williams on the basis of Government and other publica
tions of the countries covered and reports from Foreign Service Officers of the
United States.
A. F. H in r ic h s , Acting Commissioner.
Hon. L. B. SCHWELLENB A.CH,
Secretary of Labor.
Contents
Page
1
1
Summary_____________________
Latin America________________
Other countries_______________
Statistics on price changes.
British countries-------------Scandinavian countries___
France___________________
Switzerland______________
Italy....................................
Middle East_____________
Far East_________________
6
6
10
10
11
12
12
13
13
(ID
B ulletin 7s[o. 873 o f the
U nited States B ureau o f Labor Statistics
[Reprinted from the M onthly L abor R eview , May 1946.]
Price Trends and Price Control in Foreign Countries
Since VE-Day
Sum m ary
Continued shortages of food, clothing, housing, fuel, and other
essentials have made it necessary to continue price controls since the
end of the war in Europe in all 26 foreign countries for which reports
are available. Furthermore, the removal of price controls before the
end of 1946 is not being generally considered.
However, in
Colombia, price ceilings were removed in August 1945 and then rees
tablished in March 1946. In most of the European countries which
have price indexes, very little change in the price level had occurred
since VE-day. The cost of living in France showed a marked
rise, however, and scattered reports from southern and eastern
Europe show that, except in the Soviet Union, price increases have
continued. In Latin America, changes in cost-of-living indexes since
May 1945 have varied from a decrease of 1 percent in Colombia to an
increase of 16.9 percent in Mexico. In Chungking, China, retail
prices rose 11.1 percent in the last 6 months of 1945, compared with an
increase of 157.8 percent in the first 6 months of the year. In Japan
a number of price-control measures were taken for the purpose of
preventing price increases and black-market operations, but notes in
circulation increased 115.8 percent from July 1945 through February
1946.
In general, food and clothing costs have increased more than the
general cost of living, primarily because rents have not risen as much
as commodity prices. With the exception of Chile, Colombia,
Mexico, and Iran, the indexes of wholesale prices show greater in
creases since 1939 than do the cost-of-living indexes, in part because
food prices, which have been subsidized to a greater or less degree in
most countries, are more heavily weighted in cost-of-living indexes
than in wholesale-price indexes. Food subsidies in Norway and
Denmark were increased in the fall of 1945.
Latin Am erica
The general trend of prices in Latin America since the end of the
war in Europe has been upward. Most countries have maintained
price-control measures, but increases in the supply of goods have
697729— 46
( 1)
2
not been large enough to meet current demands. In some countries,
price ceilings have been revised upward.
The greatest price increases reported since VE-day in the Latin
American countries for which figures are available occurred in Mexico,
Bolivia, Paraguay, and Uruguay. In Costa Rica there was a slight
decline in the cost-of-living index after VJ-day, which was reported
as resulting from the increase in the number of price-enforcement
officers and public pressure for enforcement of price-control regula
tions. In Colombia both the retail- and wholesale-price indexes
declined from June through November, although rents rose immed
iately on the abandonment of price control in August 1945. In
Bolivia prices began to rise sharply in December 1944 and, by
February 1945, the cost-of-living index for La Paz stood at the level
of May 1945— the highest point ever reached by that index. Further
details appear in tables 1-3.
T able
1.— Indexes oj Cost o j Living in 10 Latin Am erican Countries, August 1939—
February 1946 1
[August 1939**1001
Month
.Number of items in
cluded 1
2........................
1939: August...................
December...............
1940: August...................
December___ . ___
1941: June........................
December...............
1942: June........................
December...............
1943: June— .................
December...............
1944: June........................
December________
1945: January..................
February................
March.....................
April.......................
M ay........................
June........................
July........................
August...................
September..............
October..................
November-............
December________
1946: January____ _____
February— ...........
Argen Bolivia Brazil Chile Co Costa Mex
ico
tina
Rica
Para
(La (Rio de (San lombia
(Buenos Paz)
(Bo (San (Mex
guay
Janeiro)
tiago)
ico
Aires)
gota) JosO City)
56
144
56
36
<100.0 <100.0
105.8 115.5
102.7 124.9
101.3 135.0
104.7
00
111.7 182.5
112.7 202.7
112.4 236.0
115.9 256.2
109.6 255.9
109.5 266.7
115.3 275.4
121.2 276.4
123.3 276.4
132.5 277.4
132.6 274.1
133.0 274.1
133.1 274.7
134.6 290.0
133.4 291.0
134.2 287.0
134.3 294.0
134.5 296.0
137.6 (3)
(»)
00
(3)
00
< 100.0
101.5
105.2
107.7
115.6
120.5
127.2
141.1
141.0
147.5
156.4
168.9
183.0
183.2
182.8
185.3
182.5
184.5
187.0
185.9
184.3
00
00
(3)
(»)
(*)
100.0
105.6
115.6
116.0
00
142.5
162.2
179.1
196.5
193.4
209.2
222.4
221.4
222.8
224.0
226.8
227.6
229.8
229.9
231.9
242.0
248.7
236.8
239.8
241.8
240.2
100.0
98.9
96.7
93.6
(3)
97.7
105.8
111.2
122.0
132.8
151.4
157.4
160.6
165.8
172.5
171.3
175.0
166.4
162.5
161.5
161.2
158.3
158.5
161.6
169.0
173.2
110
(3)
100.0
98.3
97.2
96.5
00
105.4
114.7
138.3
165.2
155.1
163.1
174.5
175.2
173.6
174.5
177.5
172.4
173.4
174.5
173.8
173.9
173.2
171.6
170.8
170.8
170.6
32
100.0
99.6
99.1
101.0
(8)
115.1
120.9
127.7
160.1
174.7
202.5
200.5
201.3
201.6
202.3
205.0
206.9
209.1
213.8
218.0
220.8
222.9
224.9
231.5
241.9
(3)
44
<3)
109.0
(3)
114.0
(3)
128.0
146.0
152.0
180.0
185.0
199.0
198.0
199.0
203.0
206.0
204.0
207.0
213.0
220.0
222.0
223.0
219.0
227.0
223.0
221.0
(3)
Peru Uru
(Lima) guay
(3*)
100.0
102.5
108,9
111.6
(3)
123.6
129.4
134.0
140.9
148.4
162.4
168.7
172.1
174.1
175.1
176.2
179.3
179.9
180.9
181.4
182.6
185.0
185.5
(3)
188.0
(3)
65
100.0
104.1
105.7
106.5
106.5
104.4
108.6
108.0
111.0
111. 2
116.7
121.4
123.0
127.1
129.2
129.0
129.1
131.9
135.5
143.1
137.5
137.9
139.1
137.0
(3)
(3)
1 These indexes show changes in retail prices and rents in cities. In general they are similar in construc
tion and design to the index of consumer prices of moderate-income families in large cities prepared by the
U. S. Bureau of Labor Statistics, although different methods are used to collect the prices in different coun
tries, and most indexes do not cover as many items as the United States index. The indexes given for Rio
de Janeiro represent changes in prices to “ middle income” families except that there is included in the index
of food prices a second Brazilian food index, which presents changes in food prices paid by families of wage
earners in that city. The food-cost index for middle-income families in Rio de Janeiro has risen less than
that for wage earners’ families. None of these indexes fully reflects increases in cost caused by quality deter
ioration of consumers* goods in the war period, because of the fact that in no country are statistical measure
ments of the quality of such goods available.
2 The number of items given represents the types of goods and services priced, and not the number o f
grades or qualities priced for a given item. The entry applies to the most recent date for which information
is available.
* Not available.
< The series given represents a combination of indexes with different weighting, prepared in different
periods of time for overlapping dates.
*1938 prices **100.
3
T a b l e 2.— Indexes o j Wholesale Prices in 7 Latin Am erican Countries, August 1939 February 1946 1
[August 1939*100]
Argen
tina
(Buenos
Aires)
Month
1939* August
Deepmber
__
1940* August . - ____
......
Deeember
- ......._
1941*. June_________________________
Deeember
___
.
1942: June
________ ____________
Deep/mber
1943: .Tune
______ ____________
December____________________
1944: .Tune
.... . _ .
Deeember
.
. .
1945: January - - - ■February - - . .
March________________________
April . _
M ay_________________________
June____________________ —__
J u ly _________________________
August
.
.
_ _
September
___
October
____________________
November
... Deeember
1946: January______________________
February
100.0
118.3
119.3
120.4
134.9
164.9
183.2
187.1
198.6
198.1
206.7
209.8
210.5
211.1
211.7
212.3
211.9
211.7
212.0
210. 5
210.9
208.8
209.5
212.2
214.5
(2)
Colom
Chile
(Santi
bia
ago)
(Bogotd)
100.0
108.0
112.9
113.1
(2)
155.3
176.7
191.4
198.6
194.6
199.0
212.5
209.1
209.3
210.8
211.8
212.7
215.0
215.6
217.9
218.8
221.0
222.5
221.1
223.5
(2)
100.0
94.6
87.0
85.1
(2)
85.8
96.6
104.3
113.7
123.6
148.1
148.9
157.5
159.1
166.5
174.9
174.8
171.1
164.8
161.9
162.0
156.5
161.3
157.9
161.9
164.9
Costa
Rica
(San
Jos6)
100.0
101.8
95.4
95.4
(2)
113.4
130.1
158.9
177.6
167.5
176.6
186.7
192.5
195.4
197.9
209.7
190.1
191.5
197.3
194.5
188.4
185.5
181.3
183.1
184.6
183.2
Mexico
(Mexico
City)
Peru
(Lima)
100.0
97.4
98.7
96.7
(2)
109.0
114.9
120.3
143.7
155.5
181.6
184.3
180.6
178.6
183.0
186.5
187.9
187.6
193.3
192.8
196.5
198.8
203.7
205.4
207.0
206.6
100.0
110.0
116.9
120.1
(2)
152.5
170.8
180.6
196.9
201.5
199.9
204.1
207.6
208.3
208.8
211.3
210.3
211.1
211.7
213.2
210.1
209.1
236.0
(2)
210.9
(2)
Vene
zuela
(Cara
cas)
100.0
95.2
96.7
95.4
100.5
101.1
112.8
122.4
125.7
124.5
134.2
126.5
127.5
127.9
128.2
132.8
132.8
134.4
132.9
132.5
132.8
(2)
(2)
(2)
(2)
<2)
1 These indexes are based on prices paid for goods sold in primary markets, weighted in accordance with
their relative importance in the countries concerned. The number and kind of items covered, the method
of collecting prices, and the method of computing the indexes differ from country to country.
2 Not available.
T a b l e 3.— Indexes o j Retail Prices o j Food and Clothing Since August 1939 , Compared
with C ost-oj-Living Indexes in 10 Latin Am erican Countries
[August 1939=100]
Indexes, in months specified, of—
Country and city
Month and year
Food
Argentina (Buenos Aires)1..............
Bolivia (La Pay) 1
..
Brazil (Rio de Janeiro) *..................
Prarfl ("Rio de Janp.rin) 2
...
Chile (Santiago)...............................
Colombia (Bogota)______________
Pnjsta Rina (San Jos£)
....._. . _
Mexico (Mexico City).....................
Paraguay (Asuncion).2.....................
Peru (L im a )...................................
Uruguay (Montevideo)...................
December 1945___
November 1945
September 1945___
August 1945______
December 1945......
February 1946____
February 1946____
January 1946.........
October 1945..........
October 1945 .......
December 1945___
149.6
319.0
201.6
253.1
251.2
183.1
178.4
238.0
185.0
198.7
146.4
Clothing
0)
Cost of living
136.4
346.0
300.0
137.6
296.0
184.3
315.8
185.9
209.9
265.9
239.8
173.2
170.6
241.9
219.0
185.0
137.6
214.1
213.5
1 The series given represents a combination of indexes with different weighting, prepared in different
periods of time for overlapping dates. The first Brazilian index shows prices paid by middle-class families.
2 Wage earner series.
2 1938 prices* 100.
* Not available.
Argentina.— On September 14, 1945, decree No. 21,748 was issued
revising the ceiling prices established by decree No. 29,709 of Novem
ber 9, 1944, or by any other decrees on the products covered in the
September decree. It provided that all actions pending which were
based on the superseded legislation should be turned over to the
Secretariat of Industry and Commerce for settlement, and the en
forcement of the price-control law of 1939 was assigned to the same
4
agency by a decree of October 31, 1945. Ceiling prices for articles of
food and clothing fixed by the decree of September 14, 1945 were to
be effective until November 30 in the Federal District and adjacent
parts of the Province of Buenos Aires; the conditions of sale of cloth
ing and textiles for use in the home were fixed, up to December 31,
1945, throughout the Republic. However, the Secretariat of Indus
try and Commerce might adjust these ceiling prices in case of varia
tions in the price of raw materials, cereals, and other products of
national origin. Ceiling prices to be charged to wholesalers, retailers,
and consumers became effective November 1 for various grades of
31 foods and 12 household articles. Specific regulations were pro
vided for textile prices, which in some cases, lowered the prices in effect
on the date of the decree and fixed the maximum profit under certain
circumstances, taking into consideration cost of raw materials, wages
and other costs entering into manufacture and handling of goods.
Retail dealers were not allowed to sell to the public any articles, on
which ceiling prices had been fixed, in quantities greater than normal
consumption would demand, and resale of textiles purchased for home
use was expressly prohibited. Within 15 days from date of its pub
lication, Provincial and territorial governments were to adjust their
local prices of articles listed in the decree, taking into consideration
transportation and other costs.
A short enforcement period was fixed, during which new measures
could be prepared for the gradual return to normalcy, with prices
determined by the law of supply and demand, as economic conditions
of the postwar permit.
Bolivia.— The available information indicates that there have been
no changes in price control in Bolivia in the past year. The cost-ofliving index for La Paz rose substantially after June 1945.
Brazil.— In September 1945, two new price-control agencies were
created. The first of these was a National Price Commission estab
lished by the Coordinator of Economic Mobilization on September 6,
1945, to study and make recommendations to the Coordinator con
cerning ceiling prices, cost of production, supply and other related
problems; State and municipal branches were to be established. The
second agency established during September was a special priceenforcement agency in the Federal District, which was installed on
September 20. Late in 1945, the Coordinator of Economic Mobiliza
tion issued an order that, effective January 1, 1946, the manufac
turer’s price of cotton textiles in Brazil should be reduced 10 percent
below prices prevailing on September 1, 1945. Gasoline rationing
was scheduled to end for the Federal District on November 1, 1945,
and later in the State of Sao Paulo, in the south of Minas Gerais,
the north of Parand, and in the States of Mato Grosso and Goiaz.
B y decree law No. 8,500 of December 19, 1945, the office of Coordi
nator of Economic Mobilization was abolished, effective at the close
of 1945, the National Price Commission being transferred to the
Ministry of Labor. Shortages of wheat and meat complicated pricecontrol problems late in 1945 and early in 1946. Refusal by the Rio
de Janeiro baking industry to make home deliveries of bread com
pelled the Commission to issue a new price ceiling for bread, effective
5
March 1, 1946, of 3.10 cruzeiros for a loaf weighing a kilogram (2.2
pounds).
Chile.— Price-control regulations have been continued in Chile
since the relatively slow improvement in the shipping situation, and
general world shortages have combined to keep supplies of capital
equipment and consumer goods far below the demand. In addition,
bad weather conditions in most sections of the country had an adverse
effect on crops and the livestock industry in 1945.
Colombia.— As noted above, price control in Colombia was aban
doned in August 1945 and reestablished in March 1946. Details as
to the new system of control are not yet available.
Costa Rica.— In September 1945 the price-control administration
in Costa Kica (Office of Economic Defense and General Price Inspec
tion) was organized and the number of price inspectors was increased
from 16 to 32, in response to protests from civic, social, and labor
organizations that price ceilings were not being adequately enforced.
In February 1946, there was considerable public discussion of the
possibility of reducing price ceilings, on the ground that imports
were increasing and that wartime price levels were no longer justified.
Mexico.— The Mexican Government continued its efforts to hold
ceiling prices on various staple commodities, but after VJ-day both
the wholesale and retail price indexes continued the rise which began
late in 1940 at the retail level and early in 1941 at the wholesale level.
Peru.— The general food situation in Peru in March 1946 was
characterized by shortages of wheat, potatoes, meat, fish, edible
oil, and fruits. In order to stabilize retail bean prices and make
larger quantities available to the public, large purchases were made
by the Department of Agriculture for sale at a moderate price. The
purchase of Chilean potatoes was under consideration, while the
importation of meat and fruits, and reduction in tariffs for these two
products was contemplated, as measures to combat in part rising
living costs in basic foods.
Uruguay.— General shortages, and particularly a shortage of wheat,
resulted in the continuance of price control. A law providing for
rent stabilization or reduction, passed on December 16, 1943, was
extended to December 31, 1945, and a recent decree raised the price
of bread.
Venezuela.— Under authority of decree No. 176 of August 15, 1944,
the Venezuelan National Supply Commission recently fixed certain
ceiling prices, as follows: Maize in the Federal District and Sucre
District of the State of Miranda, by resolutions of January 4 and 12,
1946; retail price of chopped meat {came picada) in the Federal
District and Sucre District of the State of Miranda, by resolution of
January 10, 1946; prices of Dodge automobiles, by resolution of
January 10, 1946; exact wholesale and retail prices for beef on the
hoof, by resolution of March 19, 1946; and imported meat, by resolu
tion of March 21, 1946. The National Supply Commission also has
authority to repeal ceiling prices fixed earlier by the former National
Price Kegulation Board, as was done for mechanical refrigerators by
resolution of January 4, 1946.
6
Other Countries
Statistics on price changes during the year 1945 are available for
12 other countries. In general they show relative stability of the
wholesale price level. Very little change occurred in the indexes for
Australia, Canada, and New Zealand; slight declines occurred in Den
mark, Sweden, Switzerland, and in Norway at the end of the year. A
slight rise took place in the United Kingdom, and a very marked
rise in China. In Egypt, Iran, and Palestine, declines earlier in
the year were followed by increases.
In none of these countries was there a marked decline in living costs
as measured by retail price indexes during 1945. Stability character
ized the indexes for the British countries, Switzerland, and the Scandi
navian countries, except for Norway where the index rose 4 points.
Only China showed a drastic rise in the index of living costs.
ST A TISTIC S O N P R IC E C H A N G E S
Tables 4 to 6 give index numbers of retail and wholesale prices for
foreign countries outside Latin America. As noted in the previous
article on this subject2 the kinds of goods and services included in
these indexes, methods of weighting and computing them, and methods
of collecting the prices on which they are based differ considerably
from country to country. I t would be expected that countries where
T
able
4. — Indexes o f Retail Prices (Living Costs) in Various Countries, August 1 9 3 9 February 1946 1
[August 1939=100]
Month
Original h e __
Australia
Canada
July 1936- 1935-39 July 1936June
June 1937
19392
Number of items included *_____________
(«)
147
1939? August.
.......
I)p«»mhAr
1940: A ugu st__________________________
December___________________ ____
1941: June____ ________________________
December________ ____ ___________
1942: June........... ............... ........................
Dppfimhfir
......
. _
1943: June....................................................
December________________________
1944: June____ ____________________ ____
December ,
_ .
.
1945: January__________________________
February________________________
March___________________________
April
___. . . . . . .
M ay________________________ ____
June_____________________________
July
__
August
*
..
September_______________________
October
_____ ...
November_______________________
December________________________
1946: January...............................................
February ..........................................
100.0
101.1
104.7
107.7
109.3
112.4
118.1
122.5
124.9
122.6
122.9
123.0
(*)
(®)
122.6
(#)
(«)
122.9
00
00
123.0
(«)
00
00
00
100.0
103.0
105.1
107.1
109.6
114.9
115.8
117.9
117.6
118.4
118.1
117.6
117.7
117.7
117.8
117.8
118.1
118.7
119.3
119.5
118.9
118.7
118.9
119.1
118.9
118.9
See footnotes at end of table.
* See Monthly Labor Review, October 1945 (p. 624).
China
(Chung Denmark
king)
48
l®204.0
282.0
652.0
00
00
2.930.0
4.310.0
6.290.0
10,900.0
18.300.0
44.500.0
52.800.0
63.300.0
86.200.0
110.500.0
127.500.0
141.600.0
147.600.0
162.900.0
182.200.0
169.500.0
164.900.0
173.800.0
178.800.0
181,000.0
1935
Egypt
Iran
JuneMar. 21,
August 1936-Mar.
1939 3
20, 1937
78
60
7100.0
8 110. 2
8 127.1
8 141.1
8 150.5
8 151.4
8 154.2
8 156.1
8 154.2
8 156.1
8 157.0
8 157.9
157.9
<fl)
(6)
158.9
(®)
(8)
158.9
(6)
(6)
158.9
(°)
(6)
157.9
100.0
108.0
(«)
122.0
134.0
156.0
178.0
215.0
241.2
257.2
276.9
292.0
293.1
294.1
295.6
292.8
290.3
290.0
293.0
295.4
297.7
(®)
(6)
(6)
(6)
(®)
100.0
102.6
111.8
115.8
142.4
189.1
251.5
385.0
620.3
763.7
796.3
* 660.8
689.9
693.4
683.5
677.1
657.9
637.3
612.5
601.1
587.7
586.2
602.6
626.7
697.4
646.7
7
T
able
4. — Indexes o f R etail Prices (Living Costs) in Various Countries August, 1939—
February 1946 — Continued
[August 1939=1001
Month
New
Zealand
Original base................................................
Decern-
Norway Palestine
1938
“ prewar”
Sweden
Switzer United
Kingdom
land
1935
June 1914 July 1914
1942 4
Number of items included•........................
221
170
140
1939: August................................................
December...........................................
1940: August................................................
December............................................
1941: June....................................................
December...........................................
1942: June...................................................
December...........................................
1943: June..................................................
December..................................... ......
1944: June....................................................
December...........................................
1945: January...............................................
February............................................
March.................................................
April...................................................
M ay....................................................
June....................................................
July.....................................................
August................................................
September..........................................
October............ ........... .......................
N ovem ber.,.......................................
December...........................................
1946: January...................^..........................
February. _ _
_ __
100.0
102.2
104.7
1C5.8
107.4
110.6
110.4
113.4
113.4
113.5
113.5
113.8
100.0
106.0
115.9
129.5
137.8
142.6
146.1
147.6
149.4
150.2
151.3
151.5
151.6
151.7
151.9
153.8
153.9
154.4
154.6
154.9
155.8
153.9
154.2
155.1
155.9
155.8
00
00
00
00
00
00
185.0
211.0
248.0
230.0
238.0
252.0
254.0
253.0
258.0
257.0
257.0
254.0
256.0
257.0
258.0
260.0
258.0
259.0
262.0
(®)
(fl)
114.0
(«)
(6)
113.9
(«)
(«)
113.5
00
00
113.7
00
170
7 100.0
8105.6
» 114.8
8 121.3
« 129.6
8 134.3
*139.8
8140.7
140.7
140.7
139.8
139.8
(«)
(«)
139.8
(«)
00
139.8
00
(6)
139.8
(«)
00
00
138.9
00
70
100.0
103.6
110.2
116.8
127.7
134.3
140.9
146.0
148.2
149.6
151.8
151.8
152.6
152.6
152.6
152.6
153.3
153.3
153.4
153.1
153.0
151.8
151.1
150.9
150.9
100.0
111.6
119.4
125.8
129.0
129.7
128.4
129.0
127.7
128.4
129.0
129.7
130.3
130.3
130.3
130.3
131.0
131.6
133.5
132.3
131.0
131.0
131.0
131.0
131.0
131.0
1
These indexes show changes in retail prices and rents in cities. In general they are similar in construe*
tion and design to the index of consumer prices of moderate-income families in large cities prepared by the
U. S. Bureau of Labor Statistics, although different methods are used to collect the prices in different
countries, and most indexes do not cover as many items as the United States index. The indexes given for
Australian and New Zealand cities are weighted by the per capita consumption of the general population
of the country, and are called retail-price indexes; those for Chungking represent changes in prices for goods
purchased by all economic groups in the city’s population. None of these indexes measures increases in
living costs caused by moving to war production centers, the employment of wives in war plants, being
"“ bombed out,” or other wartime costs not connected with price changes, except that the indexes for
Denmark includes increases in income taxes. None of these indexes fully reflects increase in costs caused by
quality deterioration of consumer goods in the war period, because of the fact that in no country are statis
tical measurements of the quality of such goods available.
3
The index, based on the 3 years ending June 1939, is an official conversion, without change, of an index
based on 1928-29.
3 The index based on June-August 1939 is an official conversion of an index based on 1929 which in turn
was converted from an index based on 1913-14. Weighting is based on a consumption study made in March
1920. Various adjustments have been made from time to time.
4 The series shown represents a combination of the index based on 1926-1930 with a wartime index having
different weights, based on December 1942; the two indexes overlap for the month of December 1942.
•The number of items given represents the types of goods and services priced, and not the number of
grades or qualities priced for a given item. The entry applies to the most recent date for which information
is available.
•Not available.
7 July 1939 prices=100.
8 Figure relates, to January of following year.
• Figure relates to July.
Index not converted to August 1939 base.
industries and goods consumed differ would include different items in
their indexes, but the indexes are probably not equally representative
o f consumers' expenditures in the respective countries. The indexes
here given do, however, afford an indication of differences in price
movements in the countries covered.
In both Canada and Australia the value of the official cost-of-living
indexes used in connection with wage-stabilization programs have
recently been challenged. In Canada, the United Steel Workers
(CCL-CIO ) claimed in February 1946 that the cost of living had
increased considerably more during the war than was shown by the
8
official index, and other groups claimed that the cost of living had
increased about 30 percent from August 1939 to January 1946, as
contrasted with the increase of 18.9 percent shown in the official index.
The official Canadian index is, however, generally accepted as an
accurate measure of the changes in the prices of goods purchased by
moderate-income families.
In Australia, an index of wholesale prices in Sydney for fresh fruits
and vegetables, which are not included in the official retail-price
(cost-of-living) index was computed by J. Lindsay3; that index showed
that prices of fresh fruit had increased about 140 percent from JulySeptember 1939 to April-June 1945, while vegetable prices had
increased about 74 percent. During the same period, a rise of 12.8
percent occurred in the official retail-food index which includes only
potatoes and onions among vegetables and only canned and dried
fruits. Prices of potatoes and onions have been subsidized since
April 1943, and have fallen in price since August 1939. Prices of
canned and dried fruit have risen but much less than 140 percent.
Mr. Lindsay does not present data on the trend of retail prices of fruits
and vegetables, but his article implies that the trend has been similar
to that of wholesale prices. The basic wage in Australia is tied
directly to the “ all items” retail-price index.
T a b l e 5.— Indexes o f W holesale Prices in Various Countries9 August 1939-Feh ru ary
1946 1
[August 1939=100]
Month
Australia Canada
Original base.................................... ........... July 1936Junel9392
1927
Number of items included.............. ...........
(*)
508
1939: August................................................
December...........................................
1940: August................................................
December...........................................
1941: June....................................................
December...........................................
1942: June............................................... .
December............................................
1943: June ..................................................
December...........................................
1944: June....................................................
December......................... .................
1945: January.............................................
February............................................
March............................................... April....................................................
M ay....... ............................................
June....................................................
July.....................................................
August................................................
September..........................................
October...............................................
N ovem ber........................................
December...........................................
1946: January.............................................
February. ..........................................
100.0
106.2
116.2
116.2
115.5
122.2
136. 5
137.8
141.2
139.6
141.5
140. 5
140.3
141.1
141.6
142.7
141.8
142. 5
142.6
142.7
142.4
142.1
141.2
(4)
(4)
(4)
100.0
113.0
114.4
116.5
125. 0
129.5
132.5
134.2
137.6
141.8
141.8
141.8
142.2
142.3
142.5
143.0
142. 5
142. 7
143.8
143.0
142 0
142.3
142.6
142.9
143.8
144.7
China
(Chung Denmark
king)
July 1936June 1937
1935
(4)
161
«225.0
316.0
698.0
(4)
(4)
2,760.0
4.810.0
8,010.0
12,700.0
22,800.0
46,800. 0
64.800.0
76.200.0
96, 300.0
127.500.0
159, 200.0
189,300.0
204, 200. 0
230, 400.0
246,000 0
1208.200.0
!203, 700.0
(237,300.0
1240,300 0
,241,700.0
1 (4)
100.0
128.8
153 2
172.1
182.0
189.2
191.9
193.7
192.8
193.7
195.5
197.3
197.3
197.3
198.2
197.3
197.3
191.9
191.0
190.1
188.3
185.6
183.8
183.8
183,8
182.0
Egypt
Iran
Mar. 21,
JulyAugust 1936-Mar.
19393
20,1937
176
« 100.0
122.6
131.5
140.8
159. 2
181.2
206.5
250.8
269.8
292 9
310.5
330.0
333.0
334.0
334.0
332.0
327.0
325.0
327.0
328.4
330.3
(4)
(4)
(4)
(4)
(4)
226
100.0
110.0
107.7
122.5
141.5
177.6
240.4
307.7
422.3
497.0
513.5
497.8
514.2
487.3
462.6
460.4
468.6
468.6
455.9
455.9
443.9
441.7
475.3
504.5
494.8
492.5
See footnotes at end of table.
3 Sydney Wholesale Fruit and Vegetable Prices, in Economic Record (Journal of the Economic Society
of Australia and New Zealand), Melbourne, December 1945 (p. 174)). The prices used were collected by the
State Marketing Bureau.
9
T a b l e 5. — Indexes o f W holesale Prices in Various Countries, August 1939-F eh ru ary
19461—Continued
[August 1939=100]
Month
New
Zealand
Original base..............................................
1926-30
1938
June 1936
1935
August
1939
1930
Number of items included..........................
106
(4)
(4)
(4)
(4)
200
1939: August................................................
December...........................................
1940: August................................................
December...........................................
1941: June....................................................
December...........................................
1942: June....................................................
December_______ _______________
1943: June....................................................
December...........................................
1944: June....................................................
December...........................................
1945: January.............................................
February...........................................
March___ : .........................................
April...................................................
M ay....................................................
June....................................................
J u l y ..................................................
August...............................................
September..........................................
October..............................................
November...........................................
December............................................
1946: January.............................................
February...........................................
100.0
102.9
113.0
117.0
121.0
127.0
133.2
136.3
141.0
144.4
144.4
145.5
144.8
145.8
145.5
146.6
145.8
146.0
146.4
146.8
146.9
147.0
(4)
(4)
(4)
(4)
100.0
118.2
138,2
149.2
168.1
172.8
175.1
177.3
178.0
178.4
180.0
180.4
180.5
180.5
180.6
181.0
181.1
181.5
180.7
181.3
182.9
179.9
180.6
168.7
169.2
169.5
100.0
124.6
135.2
155.6
178.7
227.6
246.9
304.6
338.1
342.7
333.4
353.9
355.2
353.8
349.9
353.0
345.9
331.7
326.7
338.1
347.3
100.0
118.9
131.5
144.1
155.9
161.3
169.4
175.7
177.5
175.7
177.5
175.7
175.7
175.7
176.6
176.6
176.6
177.5
176.6
174.8
172.1
172.1
172.1
171.2
166.7
(4)
100.0
116.5
135.6
152.5
171.9
185.1
194.9
100.0
123.2
142.8
151.5
155.4
158.9
162.7
164.4
166.3
166.6
169.3
170.4
170.4
170.4
171.0
170.9
171.7
173.4
174.1
173.8
172 9
172.7
172.7
172.6
175.2
174.9
Norway Palestine Sweden
(4)
(4)
(4)
(4)
(4)
Switzer United
Kingdom
land
203.1
204.7
207.9
206.0
205.6
205.6
205.6
205.9
206.0
206.3
206.7
207.5
206.7
204.4
203.2
199.3
200.1
(4)
1 These indexes are based on prices paid for goods sold in primary markets, weighted in accordance with
their relative importance in the countries concerned. The number and kind of items covered, the method
of collecting prices, and the method of computing the indexes differ from country to country.
2 The index, based on 3 years ending June 1939, is an official conversion of an index based on 1928-29. The
earlier index was used in the present series for 1939 and 1940.
3 The index based on June-August 1939 is an official conversion of an index based on 1935.
4 Not available.
* Index not converted to August 1939 base.
•June-August 1939 prices =100.
T a b l e 6.— Indexes o f Retail Prices of Food and Clothing Since August 1939 , Compared
with C ost-of-Living Indexes, in Various Countries
[August 1939=100]*
Indexes, in months specified, of—
Country
Month and year
Food
Australia...........................................
Canada.............................................
China (Chungking)..........................
Denmark...... ....................................
Iran....................................................
New Zealand.....................................
Norway.............................................
Palestine................................... .......
Sweden..............................................
Switzerland.......................................
United Kingdom..............................
September 1945...
January 1946.........
January 19462____
January 19463—. . .
December 1945___
December 19424__
February 1946.......
October 1945.........
December 1945 3~_
January 1946.........
February 1946.......
113.5
133.7
180,600.0
156.5
683.4
108.4
154.6
151.8
137.7
160.0
123.4
Clothing
0)
122.5
229,500.0
187.2
584.6
09
199.1
137.4
160.6
214.0
166.3
Cost of living
123.0
118.9
181,000.0
157.9
626.7
113.4
155.8
260.0
138.9
150.9
131.0
* In 1939 clothing was combined with miscellaneous items.
2 Index is based on July 1936-June 1937=100.
3 Index is based on July 1939=100.
4 When the new wartime index of living costs was initiated, it was published without giving the component
group indexes.
8 In 1939 clothing and furniture were combined in 1 group index.
10
B R IT IS H C O U N T R IE S
No changes in basic price control occurred in Australia, Canada,
New Zealand, and the United Kingdom during the 7 months of 1945
following VE-day. In the United Kingdom the cost-of-living index
rose 3 points from January to July 1945 and then declined 2 points
by September 1945. However, during the first 2 months of 1946
Canada put into effect the first steps in a program aimed at gradual
removal of price control and subsidies.4 The result of these changes
were not expected to be reflected in the price indexes until the summer
or fall of 1946.
Meat rationing was reimposed in Canada in September 1945 to
permit larger shipments of food abroad, and in Great Britain food
rations were reduced effective March 1946. In Australia clothing
rationing was relaxed in November 1945, and footwear and knitted
goods were removed from rationing. British clothing rations were
also increased slightly, effective May 1946.
In Canada and Great Britain the continued use of emergency
powers, upon which price control was based, was authorized through
transitional emergency power acts. In Australia the Commonwealth
Government continued to base its activities upon the wartime Na tional
Security Act; however, on April 1, 1946, the Commonwealth Prime
Minister announced that the Government would seek the repeal of
this act, effective December 31, 1946, but that authority for continued
price stabilization would be sought. By the spring of 1946, as the
result of action decided upon at a State premiers’ conference of August
31, 1946, three of the six Australian States had passed legislation
giving the Commonwealth Government power to continue price con
trols, but one State (Tasmania) refused to delegate such authority
S C A N D IN A V IA N
C O U N T R IE S
Price controls in Denmark and Sweden, effected during the war,
continued with some adjustments after VE-day. In Norway the
liberated Government, by provisional decree of May 8, 1945, estab
lished a system of control under a Price Directorate and local boards
of control, similar to that in operation during the German occupation.
Cost of living in each of these three countries remained relatively
stable throughout 1945. The increase in the cost-of-living index for
Norway in April 1945 was principally the result of increased prices of
tobacco and liquors which were reflected in the index for the first time,
since the Germans had prohibited their inclusion; the decrease in
October 1945 reflects the extended program of Government subsidy
to producers. Wholesale prices in Denmark and in Sweden declined
after VE-day with the lowering of import prices of certain raw ma
terials and semimanufactured products as well as of certain finished
commodities. The sharp drop in the wholesale index for Norway in
December 1945 was almost entirely the result of a reduction in the
price of petroleum products, made possible by elimination of Govern
ment taxes.*
* See Monthly Labor Review, March 1946, p. 400, for further details.
11
State subsidies to producers of specified commodities supported the
Government price policy in each of these countries. In Denmark
the subsidy to producers of butter, effective October 1945 to Septem
ber 30, 1946, continued the program of Government subsidization
begun in December 1941, while a subsidy to producers of pork, effec
tive for the same period, was a new development in Danish Govern
ment aid to agriculture. Each of these subsidies is expected to cost
the Government about 20 million kroner. Funds to cover the butter
subsidy will be provided partly through taxes on exports and on sales
to consuming industries such as restaurants, but no direct levy on
domestic consumers will be used to maintain the price of export bacon.
The Swedish Riksdag in June 1945 voted to continue agricultural
relief measures throughout the next fiscal year, with the State subsidy
amounting to 140 million kroner.
The Norwegian Government, in order to keep prices down follow
ing the wage agreement of September 12, 1945 (which increased wages
to compensate for about 75 percent of the increase in the cost of living’
since 1940), on September 28, 1945, announced extension of its pricestabilizing subsidy program to cover sugar, margarine, milk, cotton
yarn, wool and firewood. Prices of bread, meat and butter already
were subsidized; 210 million kroner, or about half of the revenue from
the current sales tax on all commodities was used for that purpose.
Revenue for the extended subsidy, which is expected to amount to 63
million kroner, also derives from the sales tax.
As a further measure of price control, the Norwegian Government
on September 8, 1945, inaugurated a monetary and financial recon
struction program designed to remove excess purchasing power as a
prerequisite to the discontinuance of certain economic controls, to
recapture illicit profits made during the German occupation, and to
secure a complete inventory of the national wealth as a basis for a just
and productive tax system.
Rationing was continued, with some changes, in each of these
countries.
FRANCE
Official prices in France continued to rise until the end of 1945*
When Paris was liberated in August 1944, retail prices were 309 percent higher than at the outbreak of war in 1939, according to a report
issued by the Ministry of Information. By August 1945, the increase
was 403 percent and by January 1946, cost of living at official prices
had risen 703 percent over 1939.
Unusual crop shortages reduced the quantity of foods available in
1945. Although bread rationing was suspended on November 1,
1945, it was reimposed January 1, 1946, and the ration was reduced
to 300 grams daily per person— 50 grams less than the ration of October
31,1945.
When the Gouin Government was installed late in January 1946,
it adopted a policy of stabilization. The official value of the franc had
been set at 119 to the dollar on December 25, 1945, as compared with
12
49.6 since the liberation of France. In February 1946, the Govern
ment proposed plans for curbing expenditure and inflation and in
creasing production of consumer goods. In order to stop the interre
lated rise of prices and wages, the labor unions agreed to the freezing
of wages, except for production bonuses and overtime. In March,
the Government gave labor enlarged powers in the administration of
price control.
S W IT Z E R L A N D
A decline in the cost of living began in Switzerland in August 1945,
with a seasonal drop in the price of potatoes. The decline continued
in October and November, largely because of Government subsidies
which permitted reduction in the prices of certain basic foods—
bread, rice, legumes, and edible fats. Price control, established in
1932 and regulated by a law of 1938, was adapted but not dropped
after the end of the war. Because of demands for wage increases to
bring real wages up to prewar levels, the Government decided to
lower prices by the subsidizing of foods which were consumed in
large quantities by agricultural and other wage earners. As the
food supply improved, the Federal War Food Office was able to in
crease rations of certain foods. In February 1946, the monthly
rations per person of meat and edible oils were raised to 1.4 and 1.2
kilograms 5 respectively. Smaller rations were expected, however,
for the spring months.
IT A L Y
With the exception of flour and^ flour products, maintained at a
constant legal price, prices in Italy continued to rise to the end of
1945. In Rome, the index of the cost of a fixed food budget provid
ing 2,200 calories daily for 3.73 consuming units stood at 1,710 in
June (September 1940=100) and 2,181 in December 1945. In
Florence, Genoa* and Naples, food prices had risen 20 to 24 percent
by the end of the year, and in Milan were 57 percent, above prices in
July 1945. In Abruzzi and Marche in central Italy, food prices in
December 1945 were 20 to 30 times higher than in 1940.
Only a small part of the theoretical, fixed food budget on which the
indexes were based could be obtained through rationing; the large
proportion which had to be procured on the free or black market
consumed up to 90 percent of the family food budget used as a basis
for these indexes. In Rome, the proportion obtainable by ration
card rose from 6 percent in December 1944, to 13 percent iii Decem
ber 1945. In Florence, Genoa, and Naples, rationed food accounted
for 25 to 31 percent of the fixed food budget.
Food shortages, caused by the decline of domestic production to
less than 60 percent of prewar and inadequacy of food imports had
reduced average per capita food consumption by the end of 1945 to
less than 70 percent of prewar. Although certain types of farmers and
dealers in the black market might be living as well as formerly, the
average caloric intake was estimated at about 1,600 calories per
capita per day. Beginning with February 1; 1946, the daily bread
ration was to be lowered to 200 grams.
* Kilogram*2.2 lbs.
13
M ID D LE E A S T
The experience of Middle Eastern countries since the close of the
war reflects continued shortages of both capital and consumer goods,
not relieved as yet by adequate imports. The large war expendi
tures of the Allies in these countries have contributed to inflationary
pressure. Price and other controls have not been able to prevent
very large increases both in the level of wholesale and retail prices
and in the cost of living during the war period. Iran experienced the
greatest difficulties in controlling prices and obtaining and distribut
ing supplies. Although domestic controls over prices, foreign ex
change transactions, exports and imports have been continued, with
only sporadic relaxation, the indexes have remained close to war
time peaks or have exceeded them since VE-day. The termination
of the Middle East Supply Centre has enhanced the difficulty of the
Middle Eastern countries in obtaining imports, since the supplying
countries on which they depended before the war have maintained
their exchange and export controls.
In the countries for which statistical information is available the
peak in wholesale prices occurred early in 1945, followed by a slight
but temporary recession after VE-day. Thus, the high point in the
wholesale-price indexes occurred for Iran and Palestine in January
1945, for Egypt in February and March 1945. The indexes reached
a low point in 1945 for Palestine in July, for Iran in October and for
Egypt in June 1945. In each of these countries the index moved up
again in the fall months. Wholesale prices for Iraq (not included
in the table) remained higher throughout 1945 than in the preceding
year.
The end of the war has brought no drop in the cost of living to these
countries. In fact the Egyptian and Palestinian indexes reached the
highest point on record respectively in September and October 1945.
In Iraq a cost-of-living index for laborers compiled by an oil company,
not shown on the table, also reached its peak in December 1945. In
Iran the cost-of-living index declined 25 percent from its wartime peak
in June 1944 to October 1945, owing to improvements in food supply
and distribution. In the last 2 months of the year, however, it had
climbed upwards once more and continued high during early 1946.
An index number of living costs, compiled by an oil company and
based on articles normally purchased by European and American
residents of Cairo, showed even more pronounced increases than did
the Egyptian official index, especially for food, clothing, medicines and
drugs, and laundry and sundries.
FAR EAST
Price increases in Chungking, China, since VJ-day have been far
less marked than during the first half oi 1945. The Government has
recently revised its regulations on foreign exchange and control of
imports and exports, but by the spring of 1946 the rebuilding of supplies
and of transportation systems had not yet reached the point of making
possible a move to stabilize prices throughout the country.
In Japan, political and economic uncertainties, and a growing
shortage of food as well as other consumer goods has induced hoarding
14
and rising prices. Inflationary tendencies since VJ-day are indicated
in the following tabulation of Bank of Japan notes in circulation:
Millions of
yen
July 31, 1945............................................................ 28, 456
Aug. 31,1945________________ - _______________ 42,300
Oct. 20, 1945______ ___________________________ 42, 040
Nov. 20, 1945__ ______ ________________________ 45, 628
Dec. 20, 1945____________ _____________ _______ 51, 091
Jan. 20, 1946_________ _____________ _________ _ 56, 065
Feb. 20, 1946_____________________ ___________ 61, 450
The Japanese Government, with the approval of the Supreme Com
mander for the Allied Powers, has passed a series of measures to
prevent price increases and black-market operations. The latest and
most comprehensive of these became effective between February 25,
1946, and March 7, 1946, and provided for the recall of all existing
currency and the issuance of new currency. In addition monthly
bank withdrawals by individuals were limited to 300 yen (about $20)
for each head of a family and 100 yen for each family member; cash
payment of a monthly salary of more than 500 yen was also prohibited,
while salary payments by check were restricted through the with
drawal limitations.
PRINTING OFFICE: 1946
@FedFRASER