The Dillon herald. [volume] (Dillon, S.C.) 1894-????, 1919-09-04
WORKING AND SAVI&G
WILL REDUCE PniC -
Governor Of Federal Reserve Board
Tea How Living Expenses May Be
Cut Down.-Why Everything Went
Up.

What is the best way to reduce the
ligh cost Of living?
Work and save" is the answer CIV
en- by the Federal Reserve Board in a
letter written by its governor, w. P.
G. Harding, to the Banking Commit
tee of the United States senate. The
committee had under consideration the
proposal to reduce the volume OF
money in circulation. Governor Hard
ing opposes this plan, holding that 1t
VIII not afford the relief expected.
THE Federal Reserve Board be-
lieves" says Governor Harding in his
letter, that any currency legislation
at this time is unnecessary and unde-
5irable, and would suggest that wheth-
er viewed from an economic or finan-
cial standpoint, the remedy for the
present situation is the same, namely,
to work and to save; to work regular
ly and efficiently in order to produce
and distribute the largest possible
volume Of commodities, and to exer-
else reasonable economies In order
hat money, goods and services may
be devoted primarily to the liquida-
tion CT debt and to the satisfaction to
the demand for necessities, rather
than to indulgence in extravagances
or the gratiication Of the desire for
luxuries."
During the last two years there has
undoubtedly taken place certain
amount Of credit expansion, Governor
Harding shows, and this in the cir
cumstances connected with the fnanc-
ing of the war was inevitable. But it
will be corrected as the securities
issued by the government for war
purposes are gradually absorbed by In
vestors. This expansion OF credit is
equal to the difference, Governor
Harding says, between the total war
expenditures of the government and
the tosal amounts raised by the gov
ernment through the medium OF taxa
tion and from the sale Of its bonds
and other obligations 80 far as they
were paid for out Of the savings OF
the people He does not believe that
any reliable estimate Of this differ
ence can be made, but he Is positive
that, whatever 1t Is, It will be grad
ually absorbed through future savings
for the reason that banks are lending
and may always be expected to lend
freely on the government bonds de-
posted as collateral.
The principal cause OF price adj
yantes just before and during the per-
iod Of the war was the need OF the
governments OF the allied nations for
all kinds Of commodities and for i'm
mediate delivery In large volume, and
the "competition Of this buying by
governments with purchases by pri-
vate individuals who failed to contract
their expenditures at rate commen-
surate with the growing expenditures
of these governments"
One OF the features Of the postwar
period, through which the nation Is
now passing and which has been
marked by rising prices, is the gen.
eral relaxation Of wartime practice OF
personal economy. This has resulted
in an increased demand for food and
clothing and other commodities by
many persons who during the war
practiced a more or less rigid econ
omy in their personal purchases. Also,
It must be borne IN mind that they
are not only buying at market prices
but are buying in competition with
the export demand. In addition, large
" increased wages and incomes dur
ing the last five years have developed
a demand for many commodities which
are not OF real necessity. This nat
,rally has diverted labor and raw and
manufactured materials from essen
,ials to non-essentiais, contributing no
small part to the trend OF increasing
costs.