The Trend of Commodity Prices

April 3, 1930

Report Outline
Drops in Commodity Prices in 1930
Causes and Effects of Price Declines
Retail Prices and the Cost of Living
The Long Swing of Prices
Special Focus

Drops in Commodity Prices in 1930

The chief economic development of 1929 was the collapse during the last quarter of the year in prices of stocks on the New York market. Sharp declines in commodity prices during the first quarter of 1930 have constituted the chief economic development of the present year to date. They have affected the interests of larger numbers of persons, in the United States and throughout the world, than were involved in the stock market crash; have retarded business recovery from the effects of that crash; and have resulted in a definite slowing up of world trade.

Wheat, cotton, wool, coffee, rubber, and many other leading commodities suffered serious losses in value during the first three months of the present year, and prevailing prices for some of them are said to be well below the cost of their production. Silver and sugar during the first quarter of 1930 made new lows for all time.

So far as immediate effects are concerned [the National City Bank observed in its March bulletin] it is to be considered that last year's crops of grain and cotton already have passed out of the farmers' hands, but in industry and trade the decline of raw materials throws everything into confusion. Purchases of both raw materials and goods are reduced to the closest possible hand-to-mouth system.…Buyers hold off until they can gain an understanding of the new situation or are convinced that prices have reached bottom. Sellers are not always in position to withdraw their offerings and the psychology of panic develops among them. When nobody is ready to buy and holders are determined to sell for what they can get, prices lose all value significance, but they spread alarm.

ISSUE TRACKER for Related Reports
Price Controls
Jul. 26, 2019  Prescription Drug Costs
Aug. 05, 1954  Discount Selling
Aug. 10, 1951  Price Cutting and the Law
Apr. 25, 1951  Enforcement of Price and Rent Controls
Nov. 10, 1948  Basing Points and Delivered Prices
Sep. 14, 1948  Prices and Politics
May 28, 1947  Retail Price Agreements
Aug. 12, 1935  New State Laws for Price Maintenance
Apr. 03, 1930  The Trend of Commodity Prices
Economic Crises
Investment and the Stock Market