Evening star., 1919-09-28
Demand on Production Facilities.

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Pointing out that the banks of the
country, ''actuated by a desire to sup
q. PORT the government" made loans freely
was practically no limit to the gov
ernment's wants." Mr.. Roberts states
that an unlimited demand for labor and
materials was brought to bear upon pro-
ductive facilities, which. by reason Of the
draft and by wartime emigration OF
foreign-born labor, were less than be-
fore the war. With the slack taken up
in the industries, the effort to drive pro-
duction resulted in the above Indicated
competition for labor and materials,
competition which the government found
impracticable to control.
at was not 30 much that government
contractors stole labor directly from each
other,'' said Mr.. Roberts, although
there was plenty Of such complaints. as
that they drew from other essential in
dustries. and that employers manufac-
turing for the ordinary trade raised
wages to hold their forces. The general
trade Of the country was booming and
people were willing to pay the prices
tries running on private trade. They
didn't realize that they were bidding
against the government for labor.
'.rhis Is the simple explanation Of how
I. the high level Of war prices was reached.
1t was the result OF an overwhelming
demand trying to satisfy itself through
q limited supply Of labor and materials
The enlarged supply Of money and
bank credit were the means through
which the demand operated, accord
ing to Mr.. Roberts. The warnings Of
banking and Official authorities that
war expenditures be met by immedi-
ate saving and not by the imitation Of
credit passed unheeded- in DE general
ignorance Of economic law. The re-
sulting depreciation in the purchasing
power Of the dollar was inevitable.
according to Mr., Roberts, who In this
The increase in bank deposits il
referred to by many people. and even
In ofncial scirc1es, a. evidence Of in
creased prosperity and wealth. but an
examination Of the process by which
deposits have been swollen does not
sustain this view. II . customer bor-
rows $4,000 Of bank and takes cred
It for 1t In his account the deposits
of that bank go up $4,000, and when
he checks out the credit 1t is not ex-
tfnguished. for his checks are depos-
tied In other banks and swell their
deposits. That amount Of bank credit
has been put into circulation and it
will remain in general circulation un-
til somebody checks against his de-
postt account to extinguish that
amount Of bank credit. There is no
fundamental difference between the
use Of credit as medium Of purchase
in the form Of bank deposits and In
the form OF paper currency"
Return to Former Level
Having given his opinion as to how
the present level of prices was
reached. Mr.. Roberts takes up the
problem Of how to return to the for
Eer level. and says:
ION. the other hand. what are the
fNv H. =
former situation? In the first place,
we know that the present situation
IN all markets as to demand and sup
ply Is abnormal Passing over for
the moment the influence Of imitation,
we know that the resumption of
steady work all over the world. the
replacement of machinery. the re-
habilitation of transportation facili-
ties. the return of soldiers to the
farms. the renewed use Of fertilizers
upon the land. will increast: the output
Of products and facilitate the exchanges
sHoas s.;. WIN Gradually become more
plentiful, supplies will accumulate.
and sellers will fnd 1t necessary to
make concessions. and to reduce their
costs"
Mr.. Roberts explains that the opin-
lon quoted Immediately above is
t1on In the European demand for
American food products; in the low
ering OF the price level of farm prod
acts as agricultural production is re-
sumed all over the world; and in the
reciprocal reduction in the prices of
the products of town industries. Re-
Ierring to the vast amount of mis-
CHIEF which has been done by the
foolish talk that q new social order
was about to be inaueurated. Mr..
Roberts warns of the danger Of re-
fusing to progress in conformity with
economic law and says:
Quit Policy of Higher Wages.
''The wise policy for the labor Or
ganizations to pursue is to quit their
poncy OF trying to push wages high
er. and make study Of how to hold
the wage rates they have gained
looking Tor future gains to an in
crease IN the purchasing power OF
the dollar They should look now to
increasing production. They should
look after their position as consum-
ers. They should seek to Cooperate
with employers in accomplishing q
reouction OF the costs per unit OF
product to what they were befo-a 4bI
war. II they can achieve that thei,
new wage rates will be secure .nd
represent real gains-a real increa ~
Of command over the necessarjea 3 ~
comforts they want Otherwise theS
are chasing shadows, and are ikeIy
to fall into a bog"
Mr.. Roberts urges upon bapLar. -
necessity for having deposits used +,
pay on loans, and maintaining a com.
paratively high rate OF interest oy
loans. II credit inf1ation in to ~ -