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

business to be transacted thereby. If the
number of dollars circulated by cash and
check doubles, while the number of goods
and service exchanged thereby remains con-
slant, prices will about double.
What has happened in the last few years?
Up to 1896 the complaint was of falling prices
Since then there has been constant outcry against
rising prices The thing that caused this turn
about was the increase in the circulating medium
due to the opening of new gold fields, the lnven-
ton of the cyanide process, which meant great
increase in the efficiency of gold mining, ana
the vast extension of the use of bank credits.
This extension of the use of bank credits IN
the last few years has come very largely from
the enormous war loans A good share OF the
loans are paid for with borrowed money or when
bought outright are used as collateral for loans.
In this way billions of dollars have been added to
bank deposits and the circulating medium OF the
country has been increased.
This increase has had the same effect IN
America that it would have had on Robinson Cru
soe's island. 1t hasn't increased the amount OF
goods available. But it has affected the yard
stick by which the value of the goods is measured
So it has raised the general level of prices.
More money is available for buying things.
That stimulates the demand. Then, in response
to the law of supply and demand prices rise cor
respondingly Eventually, when the process OF
reimbursement gets far enough along, we shall
find bushel of wheat buying about the same
number of yards of cotton that it would have
bought before the war. But the price of both
wheat and cotton will be up.
There will be no return to pre-war prices ex-
cept I'M most exceptional cases, due to special
conditions. The production of copper, for in
stance, was greatly stimulated because of the
war requirements. It's price scared. With the
conclusion of peace great copper surplus was
available more than the commercial de-
mands could absorb So the price slumped. 1t
would have gone still lower had the general range
of high prices not kept it up.
The argument does not apply to the United
States alone. 1t applies to the whole civilized
world. Everywhere there has been enormous in
flation of the circulating medium, and every
where corresponding rise in prices.
This is the contention of the economists. The
Star is not prepared to say that it is law and Cos
pei 1t does say, however, that it is vital matter
to the business men of the whole country. If the
argument is correct the thing for the alert Ameri-
to do is to recognize the situation it exists.
There is use sweeping back the Atlantic
Ocean. The man who tries merely wastes his
strength. If the price level is up, no individual
or combination of individuals can beat it down.
These words of Professor Fisher deserve pom
dering:
Business men should face the facts. To talk
reverently of 1913-14 prices is to speak dead
language today. The buyers of the country,
since the armistice, have made an unexampled
attack upon prices through their waiting attitude
and yet price recessions have been insignificant
The reason is that we are new high price
level, which will be found a stubborn reality
Business men are going to find out that the
clever man is not the man who waits, but the one
who finds out the new price facts and acts &C.
cordingly."