The Washington times., 1913-04-22
AMERICAN COST OF LIVING LOWER
WITH EARNINGS.

Mr.. Red6eld, Secretary of Commerce, has warn.
ed American consumers not to expect that the new
tariff will knock the bottom out of the cost of living
This, of course is contrary to all the unqualified
rot that was talked in the campaign last year and
most of the modified rot that has been talked ir
the new session of Congress. ..-
Prices are high because American consumers
have the ability to buy. Prices would not stay up
they could not stay up-if there were no consumers
to buy. But if they can possibly help it the Demo-
cratic tariff thinkers are not going to make tariff
that will cut American wages and other earnings
Therefore they are not going to make a tariff
that will reduce the Cost of living.
There is in this country, as in no other country,
test of whether American consumers as a whole are
being eaten up by their cost of living. 1t is in the
condition of the savings bank deposits of American
consumers. If the American people were being de-
voured by their cost of living, tat result would be
reflected in stationary savings bank deposits instead
Of increasing deposits, and then in decreasing de-
posts as families drew upon their savings to supply
the difference between their earnings and what il
cost them to live. .-
No such thing has been happening in the United
States during these recent years when there has
been much talk about the increased cost of living
On the contrary savings bank deposits, we shall
see later, have gone up
There have been times in the United States when
the savings bank deposits did not increase. One of
those times was at period when general prices
were actually falling after the panic of 1907. Prices
were falling then because consumers had lost their
employment or had had their earnings reduced.
From 1907 to 1908 the savings bank deposits in the
United States decreased in round numbers
There was another time when savings bank de-
posits were not increasing, but were decreasing 1t
was when from the point Of view Of prices, the cost
Of living was extremely low, ;lt,was when prices
were u rock bottom This following the election
Of Grover Cleveland and Democratic Congress in
1892. From 1893 to 1894 the savings bank deposits
Of the United States decreased very nearly $4O,-
900 900. On the basis of the present savings bank
deposits of the United States, that decrease of $40
O00,000 generation ago would be equivalent to a
decrease at this time of some 100000, 600. -.
Now we nave seen from the foregoing how prices
have fallen in this country with so little benefit to
American consumers that they not only were unable
to pay them out of their earnings, but to make up
the difference were compelled to draw upon their
savings. Now how has it been in the last several
years while prices have been high? Let US see.
Following the panic of 1907 the savings bank de-
pOSltS or tne UHlteQ StdteS lell oo,OOOooo,S4o.
In 1909 they were $3,7l3, ,4O5, ,7O9.
In 1910 they were S4O70, ,4s6 ,246.
In 1911 they were S42l2,583,59S.
In 1912 they were S4,45l ,slS,522.
American consumers earning so much
money from 1908 to 1912 that they were able to
save and put away in the savings banks above their
cost of living, very nearly OOO0OO00 From 1906,
the year before the panic, to 1912 American con-
sumers were able to save and put away in the
savings banks above their cost of living, very nearly
ST 900 100000!
able to save prices would not have continued to 60
up If they mad not been able to do more than meet
the high prices prices would have turned backward
And if they had been compelled to cut into their
savings of previous years to meet their cost of
living, prices would have gone down and then
further down.
Secretary Redfeld knows his economics from
both the academic and the practical side. Therefore
he doesn't want the American people to continue in
any misapprehension that Democratic vote-getters
have given them that prices like aeropane in the
skies, can come shooting down to earth because Of
new tariff schedules without American wage-earners
at the same time being dashed to pieces at the end
of the descent.
THE ONE CONSOLATION.
The Department of Justice, the California author