Douglas Island news., 1918-02-22
USE OF MONEY
 IS ANALYSED
National Treasury Department Gives Pointers Regarding War
 Time Investments

! UlhluIl Uho hU uuNNl obhhNiNh "i 'ii simple principle of economies beeI SO sorely needed, a committee of em incnt economists engaged in th study of the purchasing power O money in war time, issued today it first public statement
 After exhaustive investigation, Chi committee has reached It's conclu sion unanimously It would impress upon us the imperative need of { reduction Of consumption and an ln crease of production, of the repres sion of nonossentials, and Of pro motion of the organization and re direction of industry
 Needed Saving and Shifting
 "In meeting the great national readjustmcnt to war conditions, the committee says. "ve must not let our business as usual impulses prevent the needed saving and shift. ing of industry. lest we pay a ter rifle penalty in higher cost of liv- ing and national ineniciency.
 The committee finds the public confused and vacillating between two economic philosophios tho simple, direct. old-fashioncd, correct philosophy of saving and working and the fallacious philosophy best epitomizcd as business as usual" "Ono of the greatest perlls in the future lies in further credit cxpan- sion" the committee says, "and this peril comes largely from our lend ing by borrowing
 Right Way to Lend to Nation
 The committee points out the right way and the wrong way Co lend money Co our country. "The right way" it says. "is the frank and honest way of saving up the money by spending less or earning more; the wrong way is the at first cheap and easy. although ultimately costly and painful way, of lending the gov ernment what we borrow at the bank"
 "By giving up nonessentials Co buy government securities" the com mitteo further says. eve allow the government to buy war essentials and at the same time release pro- ductive energy from tho making of nonessentials for us to the making of essentials for the government
 Only Going Through Motions
 But" it goes on to say. eff we won't make the needed sacrifice and perhaps delude ourselves into be- licving that we do not have Co do SO. or even that we ought not Co do SO. that, on principle, we favor business as usual for ourselves while expecting business unusual Co be supcraddod by the government. we simply go through the motions of giving our billions to the gov ernment without really giving them up. Therefore the government tn order Co buy away from us what we will not otherwise surrender, bids up prices, and the rise in prices which comes about through this sort of lending is cumulative.
 "As the prices of war supplies rise. the money cost Of war grows and the government has to borrow more. Bigger loans by us to the government require bigger loans to DIS from the banks. This further eX- mansion of bank credit favors a fur ther rise in commodity prices, start ing the whole process over again in a vicious circle"
 "Thls war. the greatest of all, i' greatest especially in its cost. lt i' estimated that the money cost alone for an nations, is upward of a hun. dred billions of dollars. Each week it costs as much as did the entire Boer War each month as much o' the entire Russo-Japanese War eacf two months as much as the entire Civil War. which hitherto has hol' the record.
 simple Understanding SOrely Needed
 "Never before in history has ai understanding of the simple prin cipleg of economies been SO sorel! needed. Although much is beinl done to supply this need, we hn' the public confused and yacilatinI between two economic philosophie the simple, direct, old-fashioned correct philosophy of saving an, working and the fallacious philos ophy perhaps best epitomized a business as usual
 "so far as we let our bushes as usual impulses prevent the need ed saving and economic shifting W shall pay a terrific penalty In highe cost of living, as we'll as i'm nationo inefficency and maladiustmcnt.
 IIoans to the government mad not from savings but from borrow ings will tend to increase ban credit. Further extension of ban credit will chiefly bring about a ris in commodity prices. It is therefor desirable that further loans to th government should be made out O