New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-08-26

/ Idaho. realizes that it is now any
thing to get the dollar, and give it
any interest it demands.
/ When the stablest government, Of
the richest and most highly de-
veloped nations, industrially, Of the
earth, are paying from 3 per cent to
. c per cent for money, it is very EVIL
dent that new enterprises must pay
from 10 per cent to 20 per cent to
even get hearing.
Instantly
Expansion Stops
Now consider what is the effect
upon the enterpriser of the iron in
dustry when he is advised that, for
example, the free market price for
ship plate is to be cut from 1928 a
ton to, say, s5S, or the price Of steel
rails, say, from 500 to $40. There
is instant encouragement. New roll
ing mills will not be built, and pro-
duction will not be increased.
In precisely the same way, when
il is proposed to cut the price OF
copper from, say, % cents or 30
cents to l6 cents, the complexion of
the investing public for new copper
mines changes very quickly. There
will be no increase in copper produc-
ton. Any one can see that. And the
same way with the farmer or any
other kind of enterpriser. A fixed
price Of 50 wheat may mean a fair
production, but any one with half
an eye can see that 1t will be moth
ing like what it would be if the price
of wheat had been allowed to go
freely to 81 bushel, where the le-
gitimate demand could have put 1t.
And the same way with corn and
every other kind of produce.
But you everywhere hear it said,
even by supposedly sane and SEN
sible people, that 81 for wheat and
50 for corn and 1926 for ship plates
and S11O for steel rails and SO cents
for copper are simply Outrageous"
prices. And men high among the
governing forces of the nation, sup
rosedly sane and supposedly honest,
freely talk about thieves" and
"plunderers." They point to the
Outrageous" profits of the United
States Steel Corporation, and of the
shipping companies and Of the cop
per producers always with very
soft stop on the profits Of the
! farmer, and, as you will note, never
a syllable about 27-cent cotton-that
same cotton of which every one was
asked in 1914 to buy a bale at six
cents to help the starving South.
The president of our largest
financial institution had the courage
year ago to describe the United
States as "a nation of economic IL
literates." What seems certain is
that practically no man can reach
commanding position in Congress or
in our government with even the
most ordinary economic understand
ing. Il is amazing to find Senators
and Cabinet officers discussing the
question Of price fixing and profits
as though practically any price did
not almost invariably mean what
might be regarded as inordinate
profits to some one. A price is al
ways a composite or an average. In
almost every great industry there is
every grade of cost. A child's
primer of economics will endeavor
4 to make clear that the price is, in
the long run, always determined by
the marginal demand, or, what Is
the same thing, the marginal cost.
The normal price of wheat does not
depend upon the cost of production
in the great wheat fields of the Da-
kotas, but on the relatively few
bushels that are raised, say, in New
York or in New England. The aver
age price Of pig iron is not fixed by
what it costs to uncover the almost
limitless deposits on the Mesaba,
but by the scant production Of, let
us say. the scattered mines of New
Jersey or New York. With the COM
ing of war prices literally scores of
copper mines have been brought into
production that had been abandoned
or would not now be worked.
In other words, a price for wheat
which will increase production must
mean inordinate profits to the Da-
kota farmer. A similar price for
copper must mean fabulous profits
for Utah copper, or United Verde
and the rest. Prices for pig iron
that will increase production by
even 80 per cent must mean as
founding profits for the Steel Cor
poration.
And the wonder Of it is that all
this is clearly recognized in some Of