The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1919-04-16
CAUSE AND CURE.

The chief causes of the world adj
vance in prices appear to be, in the
opinion of o. p. Austin, statistician of
the National City bank of New York.
the initiation of world currency. cou-
pied with the scarcity demand" and
the consequent advance in labor costs.
The prospect of material reduction IN
the near future, he holds, would de-
pend upon the possibility of the re-
moval or modification of the chief
causes of the advance.
Stated chronologicalIy, the chief
causes of the advance seem to have
been first. the scarcity demand" for
war materials. food. clothing. manu-
factures manufacturing materials and
the labor required for their prompt
lowed by an enormous world infla-
ton, in which paper money with
face value of $50. 900. 100000 was
emitted by the printing presses of the
countries at war, and the legal tender
circulating medium of the world was
thus advanced from, SIS. 000. 100000 in
1913 to over $45,000,O0O,000 in 1918,
most of the gold formerly in circula-
ton passing into the vaults of the gov
ernments and their great banks as
partial basis for this greatly enlarged
paper currency.
The face value of the paper cur
rency issued in the four years of the
war was greater than the value of all
the gold and all the silver mined IN
all the world since the discovery of
America. Meantime, the national
debts of the world have advanced
from $40. 900, 100000 in 1913 to $780,
600, 900. 900 in 1919 and the annual in
terest charge from s1,75O. 100000 to
SIC, 500. 900, 900 and this quintupling
of governmental promises to pay had
also an important bearing upon the
world finances, while the fact that
bank deposits in the fifteen principal
Countries of the world grew from
about s25, 900, 100000 in 1918 to ap-
proximate1y $75,OOO,OOO 900 in 1919,
still further increased the currency
supply. especially in countries like the
United States, in which the check
business transactions.
This enormous initiation thus
brought about coupled with the con-
tinued scarcity demand for food,
manufactures, manufacturing mater
ia1, and labor required for their pro-
duetion, was accompanied by great
advances in prices, first in the mater
lads for the war, the advances gradual
ly extending to other articles which
their respective producers must ex-,
change for those'in which the advance
had already occurred, and this made
the advance in prices worldwide, and
applying to all classes of articles ire
spective of their immediate relation to
the requirements of the war.
The chief question involved in con-
sideration of the future of prices, he
says, is whether there is a prospect of
an early removal of the causes of the
advance.
The scarcity demand" still contin-
ues in everything except war supplies
and even in that line is not entirely
ended, since there are about 15,QO0,-
000 mem still under arms. The de-
mand for food is as insistent as ever,
owing to the disordered state of the
population of central Europe and the
impoverished condition of this neglect
ed soils of all that continent, while the
factories and empty shelves of all the
world are clamoring for new supplies
which ran low during the war period.
AS to material reduction of the
inflated currency, the prospects for
the near future do not seem encour-
aging in view of the fact that the
1880 budgets of the principal
countries of the world nowlbeing made
up, call for fully four times as much
money as those of the year preceding
the war.
While there may be a slight down
ward trend in the general price level
and distinct reductions in certain ar
ticles. the difficulty in removing the
chief causes of the advance. he con-
cludes, suggests that the general re-
duction in prices in the near future
may not be so rapid as had been an
ticipated.