The sun., 1919-10-06
PRODUCTION AND
THRIFT CALLED
H. G. L. REMEDY
Federal Trade Board Says
Pm-War Dollar Is Great
est Need.
WARNS OF INITIATION
Some "Cures" Will Only Add
D. to Difficulties, Declares
Summary.
s,,cio, DsspotoA 10 Tue sux.

III Specia, Despatch to Tue suS.
WASHINGTON, Oct. 5,-Appreciation OF
the American dollar to its pre-war stand
ard is the only solution for the cost of
fiving problem and the present economic
situation in the United States. in the
view of the Federal Reserve Board.
eThe board M its review Of the month
holds that any adjustment made on ac-
ceptance of the present value of the dol
lar would make war imitation permanent
Warning is given with regard to attempts
at artificial solution OF the situation that
may bring a crop of new difficulties.
a!This warning seems undoubtedly in
tended for the Administration officials
who have been endeavoring to drive
prices down by bringing goods out OF
storage and by employing other. pres
sure. The situation Is summed up by the
feserve board as follows:
lii"The cost of living problem on its
financial side Is misconceived unless II is
conceived as the problem Of restoring
the value of the dollar To accept the
depreciation worked In the dollar by war
conditions and to standardize the dollar
of the future on this basis would be to
ratify the imitation wrought by the war
and the injustices 1t produced.
mo artificial solution for an economic
situation of this kind is likely to COM
mend itself to the better judgment and
the sense omf equity of the country, even
could some artificial method of dealing
with the question of monetary deprecia-
tion be devised which would not bring in
it's train a crop of new difficulties and
problems"
A National Menace.
THAT the high price levels which
have been attained in the United states
present a grave situation is clear from
the attention which current discussion
of the causes of industrial unrest is
directing to the cost of living problem.
1t presents the most urgent and imrre-
diate phase of the problem of post wa
business and industrial readjustment. 1t
promises to remain a persistent phase
of post war conditions unless its nature
and cause are understood and rational
economic attitude toward 1t is developed.
80 far as the profiteering practices,
which current discussions assume have
developed widely and rapidly since the
armistice, are responsible for the price
aggravations which have been expert
enced in recent months. some consider
able mitigation of the cost of living
situation may be expected and indeed
is already in sight.
''The activity of fair price committees
In different parts of the country. local
action by the States, investigations and
publicity by the Federal Trade Com
mission and prosecution by the Depart
ment OF Justice, under Federal law
which as elsewhere noted, is in process
Of amendment.sare producing results al
ready.
THE problem of reducing the cost OF
living Is. however, mainly that of re-
storing the purchasing power of the dol
lar The dollar has lost purchasing
power because expansion OF credit. un.
der the necessities of war financing
proceeded at n rate more rapidly thar
the production and saving of goods
Must Reverse Process.
THE return to sound economic con
dition and one which will involve a.
little further disturbance OF norma
economic relationships as possible will
be reversal of the process which ha!
brought the country to its present pa SIS
In other words. the way in must be TIL,
way out. AS the way In was expansion
pansion Of production and saving, so tn
way out must be an increase in produc
don and in saving.
THE effect OF increased production
will be TO place a larger volume of good
against the greatly enlarged volume o
our purchasing media and thus to reduc
prices. The effect of increased savinj
will be reduction in the volume OF pur
chasing media in use and by conse
quence, a reduction of prices also.
80 far as the main incidence of tn
high cost of living is to be found in tn
ranks of labor, its correction present
an industrial problem rather than
monetary problem problem to be me
not by change in the monetary. stan
dard but by change in the machner
Of industrial remuneration.
'"rhe successful handling OF the cos
of living situation. far as concern
labor, is in first instance matter O
determining the extent to which tn
actual cost of living to different grade
OF labor in different parts OF the countr
has been increased by rising prices ;anC
secondly, of devising some effectiv
method of adjusting money wages I
changes in the money cost of Twins
The former is a technical statistics
problem and is having the attention c
the Bureau of Labor Statistics, whic
u udld On lne OASIS G
which can be constructed a cost of lN
ing index number that will show varia
tons in total expense OF families de
pendent upon wages because of pric
changes The latter Is the practice
problem of improving the status of Ia
Dor by the establishment of new work
ing principles governing the relations c
employers and employed"
Trade Balance "A Help.
'It should be noted that some in
provement in our cost of living situs
ton Is likely to result from the dimr
ished outflow OF goods to countries M
in position to make payment by RI
turn shipments of goods. Elsewhere 1
the bulletin are given the results of a
attempt to estimate the growth OF II
physical volume Of our export trade /
recent years after eliminating the priC
factor-in other words, an attempt I
estimate the growth in physical volum
while the data available for such a
estimate are not as comprehensive 8
might be desired and the results ar
therefore. not to be taken as conclusiy
they are believed nevertheless to be {
very great value as giving a mort
faithful picture OF changes In our e,