The Birmingham age-herald., 1909-12-27
COST OF LIVING IS WORRY ID BANKERS Explanation Of Phenomenon Is
 Not Easy To Find DEMAND FOR MORE WAGES Railroads Are Having Trouble Over Salaries Because Employees Say Cost of Living Is Greater
 Than Ever.
DEMAND FOR MORE WAGES

New York, December 26.-(Special.) .)- Rise in the cost of living is not a new subject of controversy. The London Econ omist's well-known "index number" av- eraging commodity prices, had advanced 13la per cent between 1897 and 1904 But 1904 and the middle of 1907. a period less than half as long, there was a further rise of nearly 22 per cent. Then came the panic of 1907, and there were some eco- homie critics, though perhaps not many, who ascribed the financial and industrial breakdown to the intolerable burden of the cost of living.
 It had been the rule of past financial crises that in the industrial readjust- ment following them prices of necessaries not only went down but for years remain ed at lower level
 The panic or 1907 brought a result in some respects different There was, in- deed sharp and rapid fall But the downward movement stopped only ten months after the actual panic date, and the average began to move up again.
 Why Wall Street Is Interested.
 During the past few weeks, even fnan- cial interests have begun to look at the phenomenon with somewhat different feeling from that displayed in 1906 and 1907. One reason was that the thing seemed so abnormal that experience gave no guidance to It's probable results. An other was the fact that along with this rapidly rising cost of living came another phenomenon, similarly coincident with 1t in 1906 and directly significant then to Wall street-evidence of a strain on capi- tai. A third reason lay in the unpleasant cost of raw material ate up profits Of in dustry three years ago.
 Finally a sa very distinct reminder, came the recent widespread demand by railway and industrial laborers for high wages to offset the cost of living. Forced to consider the problem as one with bearing even on financial markets, Wall street is asking now in some bewil- derment, What is the cause of this ab- normally quick return to oppressive cost of living? Who or what is responsible for it? What will follow if?
 Gold Output, Trusts, Tariff.
 Various answers have been made-the gold output, the trusts, the tariff the spectators, obstinacy of producers, ha- btual extravaganza of consumers, ex- haustion or depletion of the country's natural resources Possibly there is some truth in all of them. Whatever else an increasing gold output does, 1t certainly increases bank reserves Larger bank reserves mean increased facilities for credit, and credit is in- variably an important influence in ad- vancing or holding prices of cornmodi- ties. Yet there is this much to be said, that the worlds output is certainly not increasing at the pace of such years 1898 and 1899, or even 1894 IL is doubted by many experts if this years product as a whole will be any larger than that of 1908, and meantime the jacking-up of prices continues as if the increase were enormous.
 The trusts have done their share notably. this year, such smaller com binations as the Milk Trust" Yet 1t is rather curious that the sreediest of all of the great trusts of 1906. in the mat ter of extorting abnormal prices, Is this year having troubles of it's own in holding even average prices. while the Steel Trust has only lately yielded to demand for reductions. The tariff, not withstanding President Tafte's oxonera- tlon or IL as an Influence, does have bearing in preventing relief when do- mestic prices are excessive: but the very figures for cost of living, quoted fin this article, are not American but English.
 Some Other Influences.
 Operations of spectators have some- thing to do with cost of living, and their success is largely a consequence of easy credit caused by increasing gold sup plies in bank reserves. This is not true alone of speculators on the various commodity exchanges-easy credit and the assistance of the banls have gone far towards turning producers, for the time. Into spectators in their own com modities if not into sort of trust. Cot ton and grain markets not to men, ton real estate, know exactly how much the present prices are attributable to the original owner who holds his property off the market until his price is bid. Habitual extravaganza may itself re- suit indirectly from successful specula- iton, or directly from easy credit-the second explanation being reasonable in the sse of that very large section of the community which is already once more living beyond it's means. AS for exhaus- tion of natural resources. the price of such things as lumber is at least . case