196
ECONOMICA [NOVEMBER
More interesting than changes in the general price level were changes
in the price structure. Changes in the supply of a commodity, in the
German ration scale or in the make-up of Red Cross parcels, would
raise the price of one commodity relative to others. Tins of oatmeal,
once a rare and much sought after luxury in the parcels, became
a
commonplace in 1943, and the price fell. In hot weather the demand
for cocoa fell, and that for soap rose.
A
new recipe would be reflected
in the price level: the discovery that raisins and sugar could be
turned into an alcoholic liquor of remarkable potency reacted per-
manently on the dried fruit market. The invention of electric immer-
sion heaters run off the power points made tea, a drug on the market in
Italy, a certain seller in Germany.
In August, 194.4, the supplies of parcels and cigarettes were both
halved. Since both sides of the equation were changed in the same
degree, changes in prices were not anticipated. But this was not the
case
:
the non-monetary demand for cigarettes was less elastic than the
demand for food, and food prices fell a little. More important however
were the changes in the price structure. German margarine and jam,
hitherto valueless owing to adequate supplies of Canadian butter and
marmalade, acquired a new value. Chocolate, popular and a certain
seller, and sugar, fell.
Bread rose
;
several standing contracts of
bread for cigarettes were broken, especially when the bread ration was
reduced a few weeks later.
In February, 1945, the German soldier who drove the ration waggon
was found to be willing to exchange loaves of bread at the rate of one
loaf for a bar of chocolate. Those in the know began selling bread and
buying chocolate, by then almost unsaleable in
a
period of serious
deflation. Bread, at about 40, fell slightly
;
chocolate rose from 15
;
the supply of bread was not enough for the two commodities to reach
parity, but the tendency was unmistakable.
The substitution of German margarine for Canadian butter when
parcels were halved naturally affected their relative values, margarine
appreciating at the expense of butter. Similarly, two brands of
dried milk, hitherto differing in quality and therefore in price by five
cigarettes a tin, came together in price as the wider substitution of the
cheaper raised its relative value.
Enough has been cited to show that any change in conditions affected
both the general price level and the price structure. It was this latter
phenomenon which wrecked our planned economy.
PAPER
CURRENCY-Bully Marks
Around D-Day, food and cigarettes were plentiful, business was
brisk and the camp in an optimistic mood. Consequently the Enter-
tainments Committee felt the moment opportune to launch a restaurant,
where food and hot drinks were sold while a band and variety turns
performed. Earlier experiments, both public and private, had pointed
the way, and the scheme was
a
great success. Food was bought at
