The Dominion. MONDAY, AUGUST 11. 1919. HIGH PRICES IN AMERICA

Dominion, Volume 12, Issue 270, 11 August 1919, Page 4

The Dominion. MONDAY, AUGUST 11. 1919. HIGH PRICES IN AMERICA

If President Wilson is able to so deal with American profiteers as appreciably to bring down the cost of living he will give a lead which many countries will gladly follow. The chances are, however, that a fuller report of his address to Congress on this subject than is available at the moment will show that he has no such open and clear road before him as might be inferred from the statement that "the present prices of foodstuffs were arti-ficially-and deliberately maintained ■ by vicious practices." Evidence is not lacking that there are monopolistic combines operating in the United States and in other countries. which prey upon the public by extorting unjust prices for foodstuffs and other essential Commodities. Some of these predatory organisations are of international scope, and a determined attack upon them by the American Government would bo in the interests of many countries besides the United States, our own amongst the number. As a producing country we have much to fear from the operations of international trading concerns which aim at establishing monopolies and controlling markets. If Congress, under President Wilson's guidance, launches such an attack as his words imply upon predatory trading combines and upon individual profiteers national and international benefits will result. ' But it would be quite erroneous to assume that cither in the United States or in any other country of reasonably advanced development ' the high prices now current are to be attributed wholly to'profiteering. The high .cost of living has occasioned as much discussion in the United States as in most other countries where che burden of war prices has been severely felt. - Some idea of the feeling awakened is conveyed in the following message which was cabled not long ago to Pkesident Wilson (then in Europe) by twenty-six Democratic members of the Massachusetts Legislature:—"Tho citizens of the United States want you home to help reduce the high cost of living, which wo consider far more important than tho League of Nations." Tho present level of prices in the United States is broadly indicated in estimates made bj' the Bureau of Labour Statistics and based on average wholesale prices of basic commodities in 1913 and in the

earlier months of the current year, These estimates show an increase of approximately 100 per cent. In February last prices, showed a tendency to decline, but osince that month they have shown an upward tendency. Naturally in these conditions there have been many denunciations of profiteering, but it is noteworthy that a verj' large proof those who really discuss the problem find themselves driven to the conclusion fjhat the level, of prices has been raised permanently, or at all events for an indefinite period to come. For instance, Mr. T. S. Holdfm. an expert investigator for the Department of Labour, declared recently in an article in the Chicago Tribune that "the cost of living is still increasing and the dollar is. still on the decline," and that 'the question to-dav is not whether prices, will fall or how much they will fall; it is, rather, how much higher will 'they go?" This view of the matter, as it finds expression in the United States, is not by any means based upon obscure argumonts cut forward by 'vested interests." It is based upon factors in plain sight which quite obviously account largely for prices at their present level, and must continue to control them indefinitely or for a long time to come. One of these factors _is a widespread and considerable increase in the wages of .labour—an increase which tells with cumulative effect in increasing the cost of' production, and there" fore the market price, of many commodities As to this factor; the Iw 7 Hvcninrt Post observes that to expect materially cheapcr prices by way of cheaper labour is to expect workmen to accent lower' rea waees than they did before t i l But with an actual shortage of labour likely to exist, and with American labour becoming more and more conscious of power, "our workers will expect not a smaller * . share of, the wealth of the nation." With this conclusion, the _ Lilnraru Dir/e.st remarks in an article based upon a perusal of numerous expressions of Ameri-

can opinion, "practically every Labour leader and Labour editor who discusses the situation quite emphatically. concurs." Another big factor which largely Pove.rns the ruling cost of living in the United States, as in other countries, is a tremendous inflation of the supply of money, coinciaently with the destruction of an enormous body of wealth. There is weight in the contention of an American trade journal: "In considering the price question we must begin to think in terms of depreciated currency rather than in terms of higher commodity prices." Since 1914 the world has lost to an almost incalculable extent in actual wealth destroyed and in the loss of producing power and of wealth that would have been produced in normal Tears. At the same time thousands of millions in paper money have been added to the currency afloat in the world, and though the evils of depreciation are more severely felt in some countries than in others they arc nowhere trivial or lightly felt. It must be added that an attempt to restore the pre-war purchasing value of money would invite disaster even if it were practicable. On this 'point the San Francisco Chronicle lately gave sound advice: What may happen in the future fit observed wo cannot tell, but no wellinformefl person desires any speedy return of the dollar to its former purchasing power. It would mean that to get a dollar wo fihould have to produce so much more than we now produco to Ket onetlint it could not be done, nml the shrinlcnnro of values would produce central bankruptcy, individual and puband a very dangerous financial and social upheaval. Therefore let us iro ahead as we are and trust that whatever changes the future niny have for us they will be very slow. It is,_ of course, self-evident that war-time financial obligations, national or private, which had to be redeemed in a restored currency would be in actual effcct so heavily increased that in most cases thev could not be met. With all nations borrowers and with business generally based on a system of crcdit such an addition to existing burdens could spell nothing else than common and hopeless ruin. Profiteering is a factor in the

high cost of living, and one that ought to be attacked everywhere with vigour. But discussion in tiie United States has brought out even more clearly than in countries of less extensive dealings and trade that the inflation of money, which moans a diminution of its purchasing power, must be accepted as an established fact. In the new conditions created high money prices are inevitable. It is possible,_ of course, to regulate these conditions, bj.it an attempt to give money its pre-war purchasing value would simply invite disaster. The increase in money wages which in the United States and elsewhere has accompanied or followed the increase of prices is, of course, part and parcel of the necessary adjustment to new conditions, and it ought to be general. It seems to be recognised widely in the United States that the acceptanc- of a lasting change in the purchasing power of money is the essential "starting point for any practical attack upon the cost of living problem. To dream of restoring pre-war prices is to pursue an illusion. The utmost that can be hoped for is to stabilise prices in accordance with a new standard, but this, if it were accomplished, would serve all practical purposes. Stability of prices is, of course, essential to give stability to wage agreements and other measures intended to govern and regulate distribution. One of the advocated by President Wilson _ is "the marking of goods withpnecs showing the cost of production.''' This.is opposed in some cases by groat practical difficulties, bijt should it prove feasible it will serve probably an even more useful purpose in demonstrating that cost of production has inevitably increased in comparison with pre-war standards, than in checking profiteering. The President made his soundest point, however, in urging that the restoration of peaceful conditions was thing of all others necessary to the effective treatment of problems like that of the cost of living. In the case of the United States a-nd ( that of other countries the definite conclusion of peace will make for internal order." It will clear the way for the effective treatment, of such abuses as profiteering. But it is even more important, as regards the cost of living problem, that it will also permit undivided concentration upon securing the improved and more stable organisation of industry and commerce which represent the most effective contribution that can be made, not r-nly to the regulation and stabilisation of prices, but to t.he promotion of general social welfare.