New-York tribune., 1918-03-15
Propaganda and Prices

Propaganda and Prices
The contaminacious influence of prop
aganding appears to be spreading.
There appeared in "The Journal of
Commerce" for Tuesday lengthy dis
patch from Washington, purporting to
give the conclusions of the Select Com
mittee of the British Treasury as to the
cause of High Prices in England, and
''just made public"
On the strength of this dispatch our
venerable contemporary tears itself into
a fine passion, thus:
"Not the least of the annoyances pro-
duced by the present war is the crop OF
impossible or absurd economic theories
to which it has given rise, and the at
tempts to the phenomena produced
by it in support of preconceived ideas
and nostrums of one sort or another.
Probably the most dangerous manifesta-
stion of this sort is furnished in the field
of prices, where the old-tinle quantity
sof-money theorists again exploiting
the familiar notion of an oversupply OF
currency or gold as the sole or chief
cause of high charges and upward ten
dency."
That is, especially, The Tribune.
So
: "To those who want antidote for
the more or less poisonous heresles
which are thus being sent abroad to the
grave danger of popular intelligence on
current questions of money and prices
we commend the recent special report OF
the committee of inquiry of the British
House off Commons"
s"The Journal of Commerce" IS the
victim of a clumsy fraud. Its dispatch
saws, and its biting denunciation of the
theorists" is based on the idea, that:
"What the committee itself found to
he responsible for the rise in prices is
comprised in two factors.
81. The falling short in the supply OF
goods as compared with demand.
"2 The expenditure of payments, maze
.by the government for commodities and
services, in buying goods for private con-
sumption.
"The second point is admittedly given
the greatest weight" etc.
But the actual conclusions of the
Select Committee were as follows (our
italics):
Paragraph II, page a
The chief causes are:
The expansion of credits during the
acor.
The demand for commodities exceed
ing the supply, and the inadequacy of
government action to control prices.
Increase of wages and consequent IN
crease of the cost of production
Increase in the rates of protlt.
Cnfavorable rates of exchange in some
of the countries from which supplies are
imported.
On the first of these factors the COM
mittee has this to say paragraph 18,
page a.:
"The government, through the Bank of
England and the joint stock banks, has
created large new credits to enable its
contractors to expand their production.
II has also borrowed from the Bank of
England large sums on ways and means
advances, and in so far as these advances
have not been offset by equivalent bor-
rowings from the market on the part of
the banks, which has always been the
case, this operation has been pure Gre
alton of credit. These measures
may not in any way affect the soundness
and stability of financial instltu
tions but they have had the result of
creating new purchasing power on large
scale The new purchasing power, dis
tributed over the greater part of the ma
fion, in so far as it spends itself in in
v<stment in government loans, does not
take the form of additional demands for
goods and does not send up prices. But
in so far the new purchasing power
comes into the market for commodities
and takes the form of additional demands
for goods it does send up prices"
So when the committee makes it's rec
concentrations as to what may be done
to keep the cost of living from going
higher and higher, what is the very first
! Of its proposals? 1t is this:
L. Whatever measures nre possible
should be taken by the government to
ouoid the creation of neW credits IN
fnancing the a0ar.
For "new credits" read, for America,
"credit and currency expansion" and
the conclusions would perfectly fit the
situation here.
We shall have occasion to quote fur
ther from this important document. es-
pecia!Iy in view Of the fact that it has
been regarded az Of such interest in GER
tain quarters in Washington to revive
it in a form so garbled as to amount
practically To ii forgery.
A more interesting fact at the mo-
nent Is it's date The Second Report Of
the Select Committee was published De-
cember IL Of last year, and rcpublishcd,
with long comments, by financial and
other journals in England, throughout
the week following Various extracts
from and comments thereon have ap-