The Richmond Virginian. (Richmond, Va.) 1910-1920, 1917-02-11
HAVE N IRE To SPEND
THAN EVER BEFORE
But Dollar Today Purchases Less
Than 1t Did Year
Ago

pean catastrophe, the American people
have more dollars to spend than they
ever had before. Their money income
has been greater in the last year than
in any which preceded it. But there
is a fly In the ointment of their good
fortune--the dollar will purchase less
row than it commanded a year ago,
and very much less than 1t would have
bought two years ago. for the genera!
level Of commodity prices has risen to
{. height not attained since values were
expressed in terms of deprecated cur
rency prior to the resumption of specie
payment a decade after the close Of
the Civil War.
Directly and indirectly the war, OF
course is responsible for the great
rise In prices in the United States and
other neutral markets. as well as in
the belligerent countries. The shifting
of millions of workers from productive
employment to employment In which
they are not only non productive, but
wastefully consume more than for
merry, with the inevitable readjust-
ments which such shift necessarily
entailed, could not fail TO produce the
phenomenon of fantastic prices--a
phenomenon which has assumed .uch
proportions as to constitute one of the
most serious of the many problems
with which we. in common with the
rest OF the world. are now confronted.
Our Problem and Europe's.
Fortunately the problem is much
less acute here than in the warning
countries, for there are many offsets.
In some aspects the economic effects
OF the war on the United States have
been curiously like the effects upon.
the economic life of the belligerents
themselves. They, too. have enjoyed
great prosperity, unsound though II
may be in their case. Wages have
risen rapidly, the labor shortage has
been just as acute. profits on war con-
tracts have been just as great as those
accredited To American industr!ais.
and instead of saving. the people have
iSduiged ia extravaganza which be-
fore the war were wholly beyond THEM
reach. And, IN consequence, prices
have risen more there, actually and
iratively as well. than they have here,
lut viewed nationally. we have been
gaining wealth by giant strides all the
time while ttfet-h-aNa- been lnEing- 1t
just as swiftly. Increased costs here
have been largely paid out of iuterna-
tional profits. while the nations at war
have paid the bill out of capital.
The upward movement of prices in
the United states had gained Consid-
cradle momentum before the opening
OF 1915, but the markets hai also re-
covered TO large extent from the
decentralization accom- paNy.Dg the OUT
break of war. There were plenty ~
sensational Developments during the
year. but on the whole price fiuctua
tons, save for the breaks which came
late in the year when the possibility
OF AN early peace doomed suddenly
into view. were much less crratiC than
they were ia tbs intt'r half of 1914
aud in 1918.
Foodstuns aud metals were the TWO
Fgft tvagf ..4kR
OF tho war and oi domestic initiation
attending prosperity and the great in
flax of gold The cereals were all
selling at very high prices long before
1916 was ushered in But as harvest
laue approached and il became APP
Parent that the year was TO be "a had
ug.. for crops. farm products elm bod
swiftly TO new high prices. The yieia
az winter wheat was far below early
estimates ami spring wheat. after
showing much promise, suffered beav-
iy from "a hisht Of black rust. so
taa: the total production 81 the chief
cereal Was nearl" 100000, GOO business
below the record yield of 19la. Corn.
- .. and barley also fell off IN output
aad the potato crop Was short
Elsewhere.
And X was not alone in The United
states that the crop year proved dis
appointing Reports the world over
showed that other countries suffered
fully as much AS we did. But the
demand from abroad is as great as
ever. and domestic consumers were too
prosperous 10 practice economy. Cnder
these circumstances, II was not sur
prisinc that wheat should sell at
81 with some grades of corn well
nhove the dollar mark, and other
grains and foodstuns ~ proportion
ately high prices Cotton too, rose
sensat,onally. selling In the fall ST
about twenty-one cents pound.
against seven and one-fourth cents two
years before.
The average food cost of living. as
measured by the Annaiist index num-
her OF twenty five representative food
commodities at Wholesale during the
year was 10 per cent higher than IN
1915. while the years net advance was
- per cent, ana compared with the
last week OF July the current index
stands more than d per cent higher.
The course of the index number by
months since January, 1919. and by
wears since 1890. Is shown in the ac-
companyng chart 1t will he noted
that the average of food prices al
vanced~ more during the war period
than II did in the quarter Of a century
preceding the outbreak OF hostiiiles
Commodity Values.
In an accompanying table Is given
the record of high and low prices of
a number OF commodities for several
wears. A glance at 1t will show that
all the metals made striking price adj
vances in 1916, many of them reach
ing new high records The war de-
mand increased largely. and domestic
consumption was on an enormous
scale throughout the year. so that
even record production failed 10 meet
the requirements, and at times the
markets assumed n runaway aspect
The gyrations of copper furnish
good illustration of the general trend
OF metal prices. One of the first eff
fects of the war on the commodity
markets was seen in n drop In the
lice OF that metal to q little above
-tteNen cents a pound~-less than a
il,ird of its present price-in spite of
the fact that production was curtailed
- per cent or more. Within a few
lnonths. however, the war demand for
the metal became so urgent that the
mines were again operating at fun
capacity. and coincidentally the re-
Nlval Of home industry further stinu-
lated the copper trade and accentu-