New-York tribune., 1918-04-30

NT0 ONE can claim any particular
" virtue in investing his money in gov
ernment bonds on such terms. He
deserves praise only in so far his sub
scripton to the loan is the result of
genuine effort to save. If we really deny
ourselves certain comforts and pleasures
if we really make sacrifices in order to be
able to add mite to the funds required
by the government at this time, then we
may boast of certain degree of merit; but
the merit is in saving, not in investing.
The sum total of the service rendered is in
the combination of the two, saving and in
vesting.
In the face Of the titanic battle now rag
ing on the Flanders front no one will
seriously doubt that our people will un-
grudgingly empty their purses or that they
will pledge themselves even beyond their
actual cash resources in order to give tan
gible expression to their patriotism and to
their determination to support the nation
in every way that may be necessary to
insure it's complete and final victory.
To Set Our Teeth
In view of present circumstances, it is
unfortunately safe to expect that there Will
be fourth and fifth and maybe sixth
and seventh Liberty loan, and it is our SOL
emn duty to set our teeth in the deter
minaton that no matter how long the war
may last, no matter how often Secretary
of the Treasury may have to appeal to our
patriotism, the money will not only be
forthcoming but it will be raised in the
only manner that will preserve our strength
for the long fight to come-through the saw
ings of the people. If the people do not
save the alternative must be imitation, with
all it's disastrous consequences.
These are rapid increase in prices and
corresponding decrease in the purchasing
power of the dollar. AS the increase in
prices progresses the amount that the gov
ernment must borrow grows correspond
ingly. 1t becomes a neck-and-neck race
between a fictitious wealth and reduced
value Of what this wealth buy in labor
and in goods. 1t must be aim, there
fore, to restrict it to the smallest scope
compatible with the achievement of our ma
tonal purpose--the successful prosecution
of the war.
From an economic point of view it must
be considered unsound and unbusinessike
for any one to issue his obligations for
things of permanent value. No corpora
tion would think of issuing bonds agains st
the coal that has been consumed in produc-
ing its finished article, or against wages
that have been paid; nor would you or l, at
the end of the year, carry an asset the
food that we have eaten the suit of
clothes that we have worn and thrown away.
That, however, is what all governments are
doing, and what, under present circum-
stances, they obliged to do.
UnirnaginabIe
One hundred and twelve billions of dol
lars, an amount the true meaning cf which
Of 10
been spent by belligerent governments for
powder and shot, for trenches, for food and
other things, of which no trace is being
left at this time. That means that if we
draw up worlds balance sheet we would
lind that, speaking by and large, the assets
OF the corporation-b in this case the
world-have not increased, but it's obliga.
tlons issued against them have increased
out of all proportion.
Al 'he account is to balance, and if the
oDigatlons are to be accepted at approx
Mately par, the assets must be written up tc
make the difference. That is to saw. goods
increase in price as securities and currency
decrease IN purchasing power This
process must lead quickly to disaste,
Wherever the waste of the government is
not counterbalanced by increased econom,
on the part of the people.
We must bearAin mind that the nroduc
tlon OF permanent values in normal times
is accompanied by. certain amount a.
necessary and unnecessary wastage. sucl
as the consumption Of goods, food ant
clothing incident to the production of tn,
article and expenditures for comfort an,
luxuries. The material and labor put int,
the article produced, plus the incidenta
wastage of goods and plus reasonabl,
profit, constitute, in normal times. the valu
of the properties added to the assets Of tn,
world corporation. This normal wastap
must be reduced as the abnormal wastap
OF the government increases If this mol
icy is carried out consistently The snea,
with which imitation proceeds is thereb,
reduced proportionately.
Things
To sum it up in it's simplest form: on tn
one side Of the balance sheet Of the worl
corporation are all the things unconsumed
on <he other side are the dollars. If tn
dollars increase rapidly and the "thines
do not increase, or decrease, there mus
be imitation of prices. The means to coun
teract imitation are, therefore, on the on
hand, increased production and decrease,
consumption of things, and, on the other
slowing down in speed and volume il
creating new dollars by the issue of new
securities or currency credits