The Bamberg herald. [volume] (Bamberg, S.C.) 1891-1972, 1919-09-11
WORKING AND SAVING
WILL REDUCE PRICES
Governor Of Federal Reserve Board
Tells How Living Expenses May Be
Cut Down.-Why Everything Went
Up.

What is the best way to reduce the
high cost of living?
Work and save" is the answer Civ
en- by the Federal Reserve Board in
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-
Meves" says Governor Harding in his
letter, that any currency legislation
at this time is unnecessary and unde-
s;rable, and would suggest that wheth-
er viewed from an economic or finan-
eial standpoint, the remedy for the
present situation is the same, namely,
to work and to save; to work regular
" and efficiently in order to produce
and distribute the largest possible
volume of commodities, and to exer-
else reasonable economies in order
that money, goods and services may
be devoted primarily to the liquida-
ton of debt and to the satisfaction to
the demand for necessities, rather
than to indulgence in extravagances
or the ratification Of the desire TOR
Injuries"
During the last two years there has
undoubtedly taken place certain
amount of credit expansion, Governor
Harding shows, and this in the cir
eumstances connected with the financ-
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 total amounts raised by the gov
srnment through the medium Of taxa
ton and from the sale Of its bonds
and other obligations so far as they
were paid for out Of the savings OF
the people He does not believe that
any reliable estimate Of this differ
snce can be made, but he is positive
that, whatever it is, 1t 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
vances just before and during the per-
iod OF the war was the need OF the
governments OF the allied nations Tor
all kinds of commo odities 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 oy
msav persons who during the war
prsoticsd a more or less rigid econ
orsy in their personal purchases. Also,
It DIS: be borne in mind that they
are 10. only buying at market prices
bu. are buying in competition with
the export demand. In addition, large
" Increased wages and incomes dur.
tns T.. :sst five years have developed
a denane for many commodities which
ar oos Of real necessity. This nat
urs,ly hAs diverted labor and raw and
manufactured materials from essen
uaIa .c oaa essentials, contributing no
snxe pay. 10 the trend Of increasing
seoass.