New-York tribune., 1918-02-25

government can buy military truck with the
same money, ard the 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.
Inc wrong method is employed if I insist
upon buying that pleasure car and so can buy
The government securities only by borrowing
the money ct bank. I have sacrificed moth
ing out of current money income | have
simply increased the money income of the
government. The bank which lends me the
money does so by writing dcwn deposit" to
my credit on its books, which deposit" I
transfer to the government. This "deposit'
PROVIDES purchasing 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 to make both. give the government
my check to buy the truck, but at the same
time | enter the market 10 prevent the GOV
ernment from getting it. In short the public
by its paper subscriptions appears generous
to its government, but is sclfshly refusing to
make the actual sacrifice
Sacrifice Nom essentials
The principle is a broad one If we give
up non essentials to buy government securi-
ties we allow the government to buy war es-
release
ductlve energy from the making Of non-essen-
tlais Tor US to the making of essentials for
the government
But II we won't make the needed sacrifice
and perhaps delude ourselves into believing
that we don't have to, even that we ought
not to DO so; that on principle we favor
business as usual for ourselves while ex
pectng business unusual 20 be superadded
by the government we simply &c through the
motions of giving over billions to the govern
ment without really giving them up There
upon the government, in order to buy away
from Us what we viii not otherwise surren-
der, bids up prices.
Ind the rise IN prices zchich comes about
from this sort Of lending IS cumulatiue is
the prices Of car supplies rise the money cost
Of ear gro7ts and the government has to bor-
roc more. Bigger loans by us to the gorern-
'nent require bigger loans to as from the
oonhs This further expansion of bank credit
fovors further rise Of commodity prices.
starting the schole process orer again in a
ticiouS circle
But rising commodity prices present only
one OF series of evils which will follow If
we continue far the wrong road. In the
Wild scramble to buv-the public comnet;nr
against the government and the producer trv
lng to satisfy both-there is increasing diff
Aculty in getting supplies. There occurs
railway congestion, shortage, coal famine
'ior instance, from using up coal in non
essential Industries and from using the cars
needed to move IT'D and other dislocations.
The best and quickest way of finding the
r'sht road-the road OF thrift-is by reducing
consumption and increasing production hy
fepresslng non-essentials and bv organizino
a resurrection Of industry. President Wilson
has we'll said; ut Is our duty to protect our
people, SO far as we may. against the very
serious hardships and evils which would he
llkely to arise out of tho imitation which
would be produced by vast loans" And
asaln: Now is the time for America to cor
rect her unpardonable fault of was+efn,ness
and extravaganza"
The Importance of all this is emphasized NV
the report of the Federal Reserve BOARD ;Dst
issued, which contains note of warning ~,
these subjects. A Parliamentary committee
mas furthermore, reached substantially the
same conclusions from a study of the last
.hree and half years costly experiences in
England ''