New-York tribune., 1918-11-05
Finance Economics
WALL STREET OFFICE: relephone
Mills Building IS Broad st. Hanover 6s14

He who imagines that the out
put of seventeen or eighteen billions
of Liberty bonds and war savings
stamps may not yet become huge
agency for further imitation, should
consider the plans Of the real estate
operators, or perhaps in justice we
should say rather the "boomsters."
The latter argue that 80 per cent
or more Of Liberty bond subscrib-
ers are people who have never hith-
erto been able to hold on to money
even when they have it. The pre-
war number Of bond buyers was
estimated as low as three or four
hundred thousand. The total of
Liberty Loan subscribers, counting
out all duplication, is certainly not
less than five or six millions. Real
estate and building has been held
in a severe check during the war
owing to the high price of materials
and the scarcity Of workmen. Peace,
they argue, will release a huge
number of carpenters and builders
and sharply lower the price Of ma
terials. Then will be the chance
for Liberty Loan buyers to convert
their bonds into "a home of their
own" There is no need to imagine
a heavy selling movement; the real
estate men will readily take the
bonds as currency. The bonds they
will discount later at the banks, if
there should be any tendency to a
falling price. Suppose but 20 per
cent Of the Liberty Loan is so con-
verted. That would still mean near
ly three and half billions of added
bank credits. That would balance
"severe contraction"
Powerful stabilizers Of prices,
even present prices and wages are
not lacking even if peace should
come swiftly. A few Of them are
these:
1. A guaranteed price of 1925 for
the entire 1919 wheat crop. That, in
case of peace, this does not mean
bumper crops of corn, oats or other
cereals. Therefore, not heavily low
cred prices for these, or for meats.
These are large items in the cost of
living.
2. A huge shipbuilding programme,
which will employ a considerable
volume of skilled labor at very high
wages. Under government regula-
ton these wages will scarcely be
sharply reduced.
3. Government railways for twenty
| one months after peace is declared.
This will run close to the next
Presidential election. This also does
not pressage drastic cut in rail-
way wages; nor, we may imagine, in
: freights and fares.
4. Probably government price
maintenance for coal and possibly
other commodities for the most Of
next year. There will be, for a time
at least, very strong export de-
mand for coal when peace releases
shipping. Present production is, if
anything, under normal domestic and
foreign demands.
5. A great imitation of wages
abroad. In the struggle for the
worlds markets and the endeavor to
reestablish trade relations broken up
by the war, does not presage se-
we're liquidation of wages in other
countries, nor in this.
6. A drastic fall in wages, with the
attendant train of strikes, and
eventual "hard times" would almost
! certainly mean political upheaval
in 1920. The party in power will
prevent it if it can.
1t is we'll to remember that the
United States is not an island. This
has been a world war, and there
has been worldwide imitation of
currency, credits, wages and prices.
More or less, they will all have to
fall together.