Bismarck daily tribune. [volume] (Bismarck, Dakota [N.D.]) 1881-1916, 1912-12-31

cost of living has become quite as
important a factor TN business life as
in private life. Opinions as TO the
causes Of high prices are of course
divided; not a few authorities, pan
ticularly those Of a theoretical habit
of mind, clinging to the theory that
gold Is the cmain cause. While the
increase I'm the gold supply smust have
some influence upon values, its eff.
fleets are grossly exaggerated. 1t
must be remembered that gold is not
the chief basis of credit. Infinitely
more credit Is based upon salable
propeftly than upon gold. Moreover,
~ Is doubtful il the increase i'm gold
supply has more than kept pace with
the worlds rapidly increasing re.
Quirenents. The steamship and the
cable have wonderfully consolidated
the business world, SO that today in.
dlustrlal activity is worldwide ON a
scale never before experienced.
Great Britain, Germany and all the
other industrial nations have been en-
joying a boom even greater than the
United States. There has been an
enormous expansion OF credit In CON.
sequence, MI expansion which some
authorities believe to he out OF all
%lTODortiOn TO the increase OF the gold
supply. What would a paltry Increase
|of n or two hundred millions in the
latter amount 10 alongside Of the tire
mendous expansion of the worlds
credit? More gold has been used in
the arts, and several nations have re.
Gently come under the. gold STANDARD.
Moreover, India has been boarding
gold on an unprecedented scale. Her
withdrawals on this account during
the past eight wears have been esti-
nfated at over 500 ,OO0, 900. The Bal
Nan-1urkish war has also caused con
siderable boarding. The real causes
for higher prices have been. Demand
outrunning supply; rise dn land values
the world over; advance in the cost
of labor; higher standards OF living;
increased taxation, and several other
minor influences. The best cure Us
increased production. The supply OF
many commodities and cOnyeniences
is still below demand. 1t Is difficult
to find instances where there ds over
supply of any sort. The worlds
trade Is still unusually active, and
there are no signs of cessation. A
period of rising values is very apt to
be one OF more or less public unrest
until consumers have been able to
adjust themselves to the new condit
items. . Labor agitations are largely
due to such conditions, and they will
not entirely disappear until prices fall
or wages become more closely adjust
ed to these conditions.
The Rise in Interest Rates
A feature OF far.reaching import
ance is the continued rise in interest
rates, which are now fully 20 per cent.
to 25 per cent. higher than tine low
rates of q few years ago. The adj
vance cannot be attributed to dis
trust, nor waste, by war and arma'
ments, though these have c0ntribul.
ed; confidence in many. lines of in
tvestment being more marked than US:
ual. The rise is really explained by
the enormous demand for new capa.
tai, which is worldwide and is the
result of the universal commercial
activity already referred to. As vet
there, are no signs Of its abatement,
and many important new issues are
anticipated early during the coming
year. The new issues in the United
States for the eleven months Of 1912
amounted TO about 2 ,091,0O0;!gseeA ON
pared with 81. 630,OO0,OO0 a yeafSSge
OF this total sl,O30,537,O00 represent
ed icy railroad issues, which was
$26 100000 less than last year, while
the industrials figured at 81, 060, $50.
900 for new issues, or more than
$4S6, 900, 900 in excess Of q year ago.
The contrast between the increase in
railroad issues and Industrial issues
10 highly significant. Doubtless, the
Increased cost OF living has had an
effect upon interest rates. because
those with fixed incomes have been
obliged to exchange their old seclri'
ties for those paying higher returns,
luc fTtSulI tIdS3 UccuftV uoY9oSS UOIluS,
especially gilt-edged issues which
paid low rates; wEile stocks, particu'
liarly high grade preferred industrials,
have beel freely sought after by dis.
eliminating buyers. These conditions
have operated somewhat adversely to
railroad securities.
Worldwide Activity
The United States is not alone in
It's enjoyment of Industrial activity.
England is experiencing the highest
degree OF prosperity in her history in
spite Of social and, industrial unrest
similar to what exists in the United
States. Germany has also had anoth.
er year of extraordinary business &C.
Itivity, which was but slightly inter
ruDted by the Ealkan war. All other
great nations appear TO be having a
good share OF actiyity-France, Rus.
sia, Italy and even India and China.
Among the smaller and newer States
there has also been great expansion,
particularly in Canada, Argentina