The Fargo forum and daily republican. [volume] (Fargo, N.D.) 1894-1957, 1917-10-09
Is the II. c. L. Nominal?


Is the n. c. /. NonlinaI7
To one who has followed and ac-
copied the argument that price
changes, even during the war, nave
been principally owing to monetary
depreciation the first impression is
Then the high cost Of living is not
as bad as it seems; 1t is. for the
most part, merely nominal"
Now it is quite true that the high
cost of living In not as bad as some
people think it to be; 1t is not as
bad as though the average cost OF
living had risen while our average
income had not. In general. before
this disastrous war, incomes rose all
over the world and. In general, they
rose faster than the cost Of living.
The estimated per capita income
in the United States in 1910 was,
according to Professor King, 1882 as
compared with 1896 in 1900 showing
an increase Of Al per cent whereas
the price level had risen only rs per
cent in the same period.
In only one of the six decades be-
tween 1850 and 1910 did the price
level rise faster than income, name
", in the Civil war decade 1S6O-1870
when in the greenback standard,
prices rose 81 per cent. while the
per capita income rose only so per
cent. 1t is altogether likely that the
present decade, 1910-1920 will, like
the Civil war decade, show not only
an enormous rise in the cost Of liv-
ing but a loss Of per capita real in
come.
If for every one of us the rise of
income were to keep pace with the
high cost of living. the latter would
be merely on paper and not a mat
ter of vital concern to anyone.
Social Justice. ~
But even when. as was usually
true before the war, the rise IN
prices was no more rapid than the
average rise in money incomes,
prices and incomes did not increase
evenly for all of u.s. Some classes
gained much and others nothing
while still others lost. There is no
social justice" in such changes.
Bondholders Of all kinds, including
the benehciaries of trust funds in
vested in bonds such as widows and
orphans and institutions such as
colleges and hospitals. suffer be-
cause their nominal interest remains
the same while the prices Of what
they buy rise. / was told that one
great life insurance company esti-
mated that 1t lost some $50,000,000
through depreciation in bonds and
mortgages since these have grown
unpopular as an investment because
Of the continually decreasing value
Of the fixed income.
Some incomes are fixed or limited
by law. Railroads are finding diff
ficulty in doing business under their
legally restricted rates because
while their prices are fixed, their
costs go up with the rise of the gem
eral price level. This is the funda-
mental reason why railroads are
asking permission of the Interstate
Commerce commission to raise their
rates.
SaIaried men OF all kinds, such as
clerks, teachers. and public officials
and, last but not least, wage-earn-
ers lose; for while salaries and
wages rise they do not keep pace
with the rise in prices.
On the other hand the enterpriser
or profit-maker gains by rising
prices.
During falling prices, of course,
the opposite has been the case. In
terest, rent, salaries, wages and
other relatively fixed items lag be-
hind prices. The bondholder wins
AAOAAA AAAE 0A1@1A0AANAa AAA@ AAtA~A
aired man from the enterpriser and
the wage Garner from the employer.
This subtle transfer back and
forth from one set Of pockets to an
other has probably amounted 70
several billion dollars a year be-
tween the Civil war and this war
1873 20 1895 Contrasted with
1883 to Date.
The effects Of both rising and f4li-