New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1918-12-29
High Prices
Must Be Maintained

The particular application Of all this
70 the postwar problem is that we
must not permit the war to be followed
by any serious fall in prices. Safer.
from the point of view of aggregate
product, would be a further rise in
prices-the insanity of an accomplished
Worldwide imitation to be followed by a
further postwar imitation, or at all
events by nothing in the way of any
great on rapid postwar contraction.
II prices are allowed to set seriously
toward fall, either the laborers will
strike against the inevitable reduction
IN money wages Or the employers will
nave 10 strike against an over-drastic
reduction of PROTESTANT all of this at
time when there is a peculiar need in
the world not merely for a drastic re-
adjustment Of industrial activity. but
OF great net expansion of it.
mold no brief for price imitation in
general. 1ne war imitation, as I believe
has worked infinite harm and untold
injustice unfairly distributed in
comes and property has pretty we'll ex-
proprlatod the pre-war creditor class
the savings bank and insurance inter-
ests-and has subjected the consuming
public and the wage earners 70 most
OF the burdens of the war. The gen.
erous profits that imitation has distrib
uted have largely gone into war bonds
on which consumers and wage earners
Wall for an indefinite period be held
70 make good in taxes the interest
charges. But one good thing the inf1a-
,ion has accomplished: 1t has stimu
lated enterprise by multiplying profits
and this at the cost of wages and
salaries, and of consumers in general
Even worse than a price imitation is
price def1ation. If vour price infla-
ton has imposed the necessity Of in
creased volumes of government bor
rowlng-where war is financed by Dor
rowing - price defation will serve
greatly to magnify the burden of each
dollar Of the debt. After the war.
therefore. great and powerful interests
VIII fall INTO inevitable clashing. The
pre-war creditor class will make snrill
demand fol indemnity against their
loss and will urge return to the
earlier price level. The new bond
creditors also will push for this method
Of gathering in an enormous gratujtv
at the expense of the tax paying pub
lie. Business enterprise will stand
fast for price policy that shall not
restrict or cancel prohts--no def1ation
or more imitation. Labor interests will
tercely oppose reduction in money
wages and will at the same time nush
Tor lower prices-will demand employ
ment and will yet stand firm for the
wages and the prices that will paralyze
industrial activity through the narrow
ing of business margins.
What. then is going to happen In
large part this must depend on politi-
cai and financial pohcies-prophecy in
the business and industrial field WAITING
on prophecy in the fields of banking
and political policy But the wise
policies-and in the total adjustment
the nearest approximation to lust
policies after all our blunders Of in
aation and of war borrowing-willb be:
J. To hold prices stable at the existing
price level
:. To continue the existing war taxes.
especially the income and profits tax, until
the WY debt is retired
:. To be tender of profits until The reid.
1lS'menis Of peace are accomplished.