Evening star., 1919-05-04
Prices and Circulation.


pean war did not bring any such in
ration OF the currency as accompanied
the civil war, but it seems a fair as
sumption that the increase in per
capita circulation has had a more or
less remote influence on the trend of
prices. In 1913 the circulation was
$34.6o per capita. BY December. 1918.
it had risen to $5623 per capita. an
increase of e. per cent. Commodity
prices during the same period in
creased 1o1 per cent. From December.
1918, to March, 1919, there was a de-
crease in the circulation of about 50
per capita. During the same period
Ithere was a decrease in commodity
Iprices of about per cent This af-
lords reasona BILE basis for the expec-
tation that there is further re-
strlctlon Of the per capita circulation
the tendency will be to continue to
pull commodity prices down.
There is no more interesting nor
more puzzling phase of the price sit
uation than the apparent willingness
OF the American people to pay high
prices Tor luXuries. at the same time
holdlng off and awaiting a drop in
the prices of necessary things While
most lines of industry have been run
ming part time. or in a state of COM
piete suspension, several of the lux
ury lines have enjoyed great activity
and prosperity. Notable among these
are 1eWeiry, automobiles, musical in
struments and tobacco.
Even if the war did create L. 900 new
millionaires in America, it would be
creditfng them with too voracious an
peu'es 20 assume that their buying
was responsible for the greatly in
creased output of luxuries. 1t must
9
nigh cost of necessities, has a surplu.
OF earnings sufficient to enable him tc
Duy automobiles ard phonographs ar
Je"elry with much greater freed1fr'
than he ever bought them before.
Holds Assurance of Prosperity.
1t is in this latent buying power
when developed and turned into more
conservative channels, that assurance
u heafpy prosperity is to be found.
1t was with the purpose of stimulat-
ing 1t to life that the industries boa rd
OF the Department of Commerce was
conceived and organized to undertake
the task of readjusting and stabalfz-
ing prices. PsychologicalIy the idea
was a sound one, but when the rail-
road administration refused to buy
rails at the agreed-upon price all the
psychology was knocked out of the
program.
Business was very hopeful that
good things would come out of the ef-
fort at price stabiliZation through
governmental assistance. but when
that hope was disappointed business
apparently made up its mind to worry
along without paternal aid. And that's
all that was necessary to get things
going--for business TO make un it's
mind to go. 1t rescues psychology and
puts it on the job again
All men are not agreed that it is a
good thing for business to go ahead
with the present price level as a
basis of activity. but there was gen.
eral agreement that unless things
got better soon they would rapidly
get a great deal worse. The snow
bail of business dullness was rolling
up to such tremendous size that once
it got out of hand nothing would have
been able to stay it's progress.
Those lines of industry, which are
looking largely to foreign trade for
prosperity and expansion are uneasy
and hesitant about adventuring into
markets where they may have to meet
cheaper goods in competition. But so
long as prices in competing nations
hold to levels proportionately high, it
would not seem that American eXpor
ters need indulge In excessive fears. If
price levels in competing nations are
lowered decisively, there will have to
be readjustment here. But that is a
bridge which need not be crossed until
il is come to.