The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1919-04-25
Will Prices Stay Up?

Wage Garner and investor are deeply interest
ed in the present price level. All of us want to
know if the high level will be maintained for a
decade or is ready to tumble to a pre-war basis.
If we knew with certainty what the next twelve
months would reveal, business, industrial,
financial and household spheres would take on a
settled and firm aspect The soaring in price
of all commodities for the last three years. as
well as the failure of the signing OF the armstlce
to reduce prices, has fixed our attention on the
problem and made thousands, who hitherto have
paid little heed to economic facts, ponder the
situation.
The Kansas City Star presents compre-
hensive discussion of the problem, which is Of
fered to the readers of the Palladium with the
thought that it might assist them in coming to
an intelligent conclusion. The presentation of
the appended editorial of the Star is not offered
as a conclusive and final judgment on the stua-
ton, but merely as an exposition of one side of
the question:
Foodstuffs increased slightly in price in
March, the bureau of labor statistics announces.
The slight decline in February was overtaken by
the advance last month. Foods are now on the
average 80 per cent higher than in 1913, the year
before the war.
What has happened in foodstuffs has hap
pened in virtually every commodity. Prices are
up and we wait in vain for any return to the level
of before the war. Meanwhile, we undertake by
boycotts, by holding back in purchases by de-
nouncing profiteers to beat prices down.
Isn't it possible that we are off on the wrong
track? May it not be that prices have reached a
permanently higher level and that we must adj
just ourselves to it?
Of ot iS ARGUMENT
the foremost economists of the time. While we
must regard their reasoning with degree of
caution-for economists have made their full
share of mistakes under the unfamiliar condi-
ton of war-it is well to give consideration to
what they say. If they are right, then the smart
business man may be stupid in ignoring their
contention.
Briefly, this is their proposition: If nation
has a certain amount of money, including bank
credits its scale of prices becomes adjusted to
the situation. Before the war, for instance,
wheat might have been dime bushel instead of
dollar bushel, and the farmer would not have
suffered, if everything else had been down cor
respondingly. The only reason it was convenient
to use the dollar instead of the dime, as the mea-
sure for the bushel, was because the dollar scale
fitted in with the amount of circulating medium
II Robinson CruSOe ana MAN FRIDAY anu d
banker had been cast away on the island with a
thousand dollars in gold the basis for their
currency system, they would have worked out q
certain level of prices by which dozen yams
for instance, might be worth a dollar. But if
their stock of gold had been two thousand dollars
to start with, obviously there wouldn't have beer
any more yams than if it had been thousand
dollars. So yams would have been quoted at per
haps two dollars dozen. The only change would
have been in the length of the measuring stick
Prof Irving Fisher, the Yale economist, puts the
situation this way:
The general level of prices is dependent
upon the volume and rapidity of turnover of
the circulating medium in relation to the