The Yakima herald. [volume] (North Yakima, W.T. [Wash.]) 1889-1914, 1912-08-21
Money and High Prices
By w. w. Worthington

In the discussion last week 1 said
that the chief, though not the only,
cause of the steadily advancing prices
during the last 16 years was the fall
ing value of money. With the single
exception of the panic year of 1907
that decline has been at the rate of
about 4 per cent per annum. My
chisf reason for attributing this great
rise in prices to causes which have
to- do with the value of money is its
practical universality If some local
cause were at work its effects would
be local. Ths effect is world wide
There is no other world wide cause
A second reason is that the indie num-
bers used by statisticians for the pur-
pose Of detecting changes in the value
of money and which can be absolute
ly relied upon for the purpose, indi-
cate the above cause. That part OF
the increased cost of living which is
due to this one cause is indicated by
tn. difference between the index
number of 1896 and that of 1911
This indicates rise of about so per
cent. If some commodities have risen
farther or fallen below this average
we may conclude that other causes
are at work to effect these particular
commodities.
Effect Upon Various Classes
No i'll effects would follow fall in
the value Of money, or any other
change for that matter, if simultan-
eously with each change of value
there occurred corresponding
change in all kinds of incomes. For
it is obvious that it makes no differ
ence to me whether I pay $1.00 for an
article or $3.50 if there is no differ
ence in the effort required to get
either amount of money. If incomes
automatically adjusted themselves t.,
the changing value of money no one
could make complaint But that is
just exactly what does no happen.
The question of interest to us, is, who
suffers most on account of it?
The Glass With Fixed Incomes
The class with incomes fixed either
by the character of their investments
of customary usage, suffers most
from rising prices. Suppose person
has made a permanent investment
from which he had, 16 years ago, de-
rived an income of per cent amount
ing to 800. The income today will
still be 500 unless the rate of inter-
est has changed, but its value will
have diminished by very nearly as
much each year as the rate of inter-
est which he is getting. Thus, all in
cor1ea derived from the inventment OF
fixed sums of money as legacies, gov
ernmcnt bonds, etc, have greatly fall
Ion In value.
The other division of the class COM
prehends those whose incomes are
fixed by custom and usage, such as
school teachers, ministers, college
professors and the like. They suffer
because their incomes do not readily
adapt themselves to the change
Several college professors were kind
enough to submit their budgets to me
for xamination about two years age
and l discovered that, taking into ac-
count the chief items of the college
mans expense, the man who was get
ting $1,000 in 1896 would need $1,000
in 1909 to meet the same standard OF
living There had been no substan-
tial change in the salaries of college
meu for 20 years prior to the time OF
the investigation. Often the entire In
crease on account of length of serv-
ice has been absorbed by the rising