New-York tribune., 1918-01-04

sufficient labor may be made avail
able for the production of war
goods, the belief persists that
economy is unnecessary and that
the situation can be met by in
creasing production. For example,
Ingalls, Kimball, in statement is
sued yesterday, remarks that eff the
whole country can once substitute
the idea of opportunity and success
for self-denial and self-sacrifice we
shall have an increase in energy
that will push our production up
the necessary 20 billions year and
make for a spirit of success that
Will be irresistible" 1t is a beau
tiful idea, but it is also utterly i'm
practicable, for the simple reason
that the productive capacity of the
country's industrial plants is not
sufficient, and, lacking labor, cannot
be expanded enough to meet normal
demands and the demands of war
as we'll. In 1914 the value of the
product of all manufacturing plants
in the United States was $24,O0O,-
100000. In 1916 it was probably
less than $4,000, 100000, allowing
for the tremendous increase in
prices, and at least $2S, 100000, 900
of this was required for what may
be termed normal domestic con-
sumption. And production in 1916
was close to the limit Of available
plant and labor supply. Moreover,
the labor supply has since been
greatly reduced by enlistment and
the drafting of men for military
service. 1t is obvious, therefore,
even allowing for a wide margin of
error in the figures cited, that the
only way in which the facilities for
producing the things needed by the
government can be made available
is by curtailing private consumption
as much as possible. Mr.. Vanderlip
remarked a short time ago that the
government was spending only
$500, 100000 month, whereas it
wanted to spend a billion The rea-
son 1t couldn't spend the billion
was that war goods were not being
produced fast enough to permit the
expenditure of that much money.
The National City Bank, discuss
ing the close relation existing be-
tween the great financial and in
dustrial problems, makes some in
teresting comment on the subject
of saving. 1t says, in effect, that
all schemes to place purchasing
power at the disposal of the gov
ernment without reducing the pur-
chasing ability of the people are
basically unsound, because they
ignore the patent fact that pur-
chasing power is of no avail when
the supply of things to be pur.
chased is limited, and continues:
They are two phases of one prob
lem, but it is easier to see the
physical limitations of the industrial
task than tho limitations upon the
use of credit. Everybody can see
that the speed with which we can
get ready for war is limited by the
supply of labor and the capacity of
the workshops, but great many
people overlook the fact that when
the labor and shop capacity Of the
country are already completely en-
ployed nothing more can be accom-
plished by merely creating bank
credit or issuing government credit
in the form Of money. Nothing can
be gained except as labor, materials
and shop capacity are released from
private use and turned over to gov
ernment purposes. We cannot turn
over purchasing power to the gov
ernment and still use it ourselves.
We cannot put the government in
possession of productive power with
out curtalllng our own use of it.
We cannot make any scrviceable con-
tribution to the work the government
has in hand without curtailing In
the same degree our own demands
for labor and materials. In short.
we cannot help without making sac
rifces.
The arguments against self
denial are based on misconcep-
tion-namely, that the important
thing is to initiate and save money,
whereas the saving of money is
only incidental to the diversion of
productive facilities to war work.
This is what the bank aptly terms
the vital saving" and it must be
made effective "either by voluntary
savings, with the people turning
their purchasing power over to the
government, or by imitation, which
diminishes the purchasing power of
the people in their own hands until
they are obliged to curtail pur-
chases. The dangers OF the latter
me ptHOu are n1oir is rO;,%oJ