New Ulm review. (New Ulm, Brown County, Minn.) 1892-1961, 1918-03-06

old-fashioned, correct philosophy Of
saving and working and the fallacious-
philosophy perhaps best epitomized as
business as usual.
SO far as we let our business as
usual impulse prevent tie needed
saving and economic shifting we shall
pay terrific penalty in higher cost of
living, as well as in national inefficiency
and maladjustment.
"The living cost and the level Of
commodity prices in general are now,
as We are all aware, extremely high.
Tie average wholesale prices in the
!, United States last month were 81 per
cent above that of July 1914; that is,
tie purchasing power of money over
goods in the wholesale markets has
been almost cut in half.
'TEe rise in retail prices of foods
in tie same period has been 81 Fer cent.
tbs means a reduction to less than
two-thirds in. tie purchasing power
OF n oney oye- foods in tie retail ma kets.
Abroad the rise of prices has been even
greater.
| Between 1896 and 1914 wholesale
prices in the United States were rising
at the average rate of only one-ffth
of l per cent per month; but even that
small rate, long continued, was enough
to make tie III. C. L." very painful
: fact.
"Sinoe tie war wholesale prices in
tie United States have been rising at
tie rate of rearly FER cent per month,
or nearly 10 times as fast as before the
war. In some countries in Europe the
rise in prices has been two or three times
as rapid as in the United States. While
the war lasts the commodity price level
will inevitably mount by leaps and
bounds, unless We adopt rigorous pre-
ventive measures. In particular we must
avoid, so far as possible, lending By Dor
roaring.
Loans to the Government made
not from savings but from borrowings
will tend to increase bank credit. FURTHER
extension of bank credit will chiefly
bring about a rise in commodity prices.
It is therefore desirable that further loans
to the Government should he made out
of current savings.
There are two ways for us to lend
money to our country. The first way
is the frank and honest way of saving
by spending less or earning more. Tie
otEer and wrong way is the, at first,
cheap and easy, although ultimately
costly and painful, way Of lending the
Government what we borrow from the
bank. Even that species of robbing
Peter to pay Paul is, of course, better
than paying Paul nothing; for Paul,
!, i. e., the United States Treasury, must
have the cash. But it can be justified
' only when unavoidable or when used
as temporary expedient, and the
debts so contracted are soon repaid out
of savings. H. -.
IF I buy Government securities by
giving up the purchase of pleasure
automobile, the Government can buy a
,, military truck with the same money,
and the labor and capital which would
have made tie pleasure for me car will
make the truck for the Army instead.
!, That is the right way. so
''The wrong method is employed if I
insist upon buying. that pleasure car
, and so can buy the Government secu-
rites only by borrowing the money at
bank. I have sacrificed. nothing out of
current-money income. I have simply
; increased the money income Of the
Government. The bank which lends
me the money does SO by, writing down
deposit to my credit on it's books,
, which deposit 1 transfer to the Gov
eminent. This deposit provides pur-
, chasing power without providing or
releasing anything to be purchased.
The result is that instead of labor and
! capital turning from the making of
! pleasure cars to, the making, of motor
trucks they are called upon to5make
both. give the Government my check
; to buy the truck, but at the same time
enter the market to prevent the Gov
eminent from getting it. In short, the
! public, by it's paper subscriptions, ap-
pears generous to it's Government, but
is selfshly refusing to make the actual
sacr' fee. H. ....s.s
! '"The principle is a broad one. If
we give up nonessentials to buy Gov
eminent securities, we allow the Gov
eminent to buy war essentials, and at
the same time release productive en-
ergy from the making Of nonessentials
for us to the making of essentials for
the Government.
"But if we don't make the needed
sacrifice, and perhaps delude ourselves
into believing that we don't have to, or