The Bottineau courant. (Bottineau, Bottineau County, N.D.) 1895-1929, 1918-02-14

Dsts as much as did the entire Boer
Mar; each month as much as the en-
tire Russo japanese War; each two
months as much as the entire civil
War, which heretofore has held the
record.
Never before in hustory has an
understanding Of the simple princi-
pies of economics been so sorely need
ed. Although much is being done to
supply this need, we find the public
confused and vacillating between two
economic philosophies-the simple,
direct, old-fashioned, correct philos-
ophy Of saving and working and the
fallacious philosophy, perhaps best
epitomized as business as usual.
$50 far as we let our business as
usual impulses prevent the needed
saving and economic shifting we shall
pay a terrific penalty in higher cost
Of living, as well as in national inef-
ficiency and malaajustment.
"The living cost and the level of
commodity prices in general are now,
as we are all aware, extremely high.
The average wholesale prices in the
United States: last month were 81 per
cent above that Of July, 1914; that
is, the purchasing power Of money
over goods in the wholesale markets
has been almost cut in half.
"The rise in retail prices of foods
in the same period has been 81 per
cent. This means q reduction to less
than two-thirds in the purchasing
power Of money over foods in the re-
tail markets. Abroad the rise Of
prices has been even greater.
Between 1896 and 1914 wholesale
prices in the United States were ris-
ing at the average rate Of only one
fifth of per cent per month; but
even that small rate, long continued,
was enough to make the III. G. Of L."
q very painful fact. i
"Since the war wholesale prices in
the United States have been rising at
the rate Of nearly 2 per cent per
month, or nearly ten 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 inevi-
tablly mount by leaps and bounds, un-
less we adopt rigorous preventive
measures. In particular we must
avoid, SO far as possible, lending
by borrowing.
"Loans to the Government made
not from saving but from borrowing
will tend to increase bank credit.
Further extension of bank credit will
chiefly bring about rise in common
ity prices. 1t is therefore desirable
that further loans to the Government
should be made out Of current saw
ings.
"There are two ways for us to lend
money to our county. The right way
is the frank and honest way Of saving,
by spending less or earning more. The
other 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 rob-
bing Peter to pay Paul is, of course,
better than paying Paul nothing; for
Paul, i. e., the United States Treas-
ury, must have the cash. But it can
be justified only when unavoidable
or when used as temporary exped-
lent, and the debts so contracted are
soon repaid out of savings. @
eff I buy Government securities by
giving up the purchase of pleasure
automobile, the Government can buy
a military truck with the same mon
ey and the same labor and capital
which would have made the pleasure
car for me will make the truck for
the army instead. That is the right
way.
"The wrong method is employed if
I insist upon buying that pleasure
car and so can buy the Government
securities only by borrowing the mon
ey at bank. I have sacrificed moth
ing out Of current money income. I
have simply increased the money in
come Of the Government. The bank
which lends me the money does so
by writing down deposit to my
credit on its books, which deposit I
transfer to the Government. This
deposit provides purchasing power
without providing or releasing any
thing 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 to make both.
/ give the Government my check to
buy the truck, but at the same time
l enter the market to prevent the
Government from getting it. In short,
the public, by its paper subscription,
appears generous to its Government,
but is selfshly refusing to make the
actual sacrifice.
"The principle is broad one. Il
we give up nonessentials to buy Gov.
ernment securities, we allow the Gov
ernment to buy war essentials, and at
the same time release productive en-
- ~ - - IL