The citizen., 1919-08-21
THE HIGH COST OF LIVING

" seeking iO make slight contri-
button to correct understanding
of a subject i'm which everybody is
Interested.
I'm the exchange Of commodities
an values are relative. 4 buShcl Of
corn. say. is equivalent to a half
bushcl Of wheat: a pair Of shoes is
equivalent 10 fifty pounds of sugar,
etc. This relative value depends
upon the very fundamental law "
supply and demand. II the supply
of wheat increases IN proportion to
the demand for it while the supply
ol corn remains the same or di-
minISEc> in proportion to the de
mand for corn. a bushel of corn will
hc worth more than a half hushcl
of wheat But why do We say that
certain quantity of wheat j.
worth dollar? Why do we
express the value Of every commo-
dity i'm terms of dollars? Because
dollars are always eXchangeablc for
other commodities. \ man who has
wheat to dispose Of can always eX-
change 10 for dollars and then eX-
change the dollars for shoes or any
article ne wishes Hcpce IL Is con-
Vcnicnt io express the value Of all
other commodities in terms of dol
lars. But the principle Of relative
values is the same. To say that the
price of pair of shoes is five dol
lars is to state the relative value of
shoes and dollars.
All this seems very simple. But
since the principle of relative values
is The same whether we compare the
values of wheat and corn or those
of wheat and dollars, it follows that
the law of supply and demand ap-
plies in one case as much a in the |
other. As the supply Of wheat in
CreascS. IFS relative or exchange !
value diminiShes. So as the supply /
Of dollars increases. the relative
value or purchasing power of the !,
dollar diminishes. II takes more |
dollars to buy wheat aud other
things, and prices are higher.
Now two things have happened
since 1913: a. The quantity of
money in circulation in this coun-
try has increased 65ct, and in the
the world at large 2OOfc or more.
z The quantity of the necessities
of life has been greatly reduced by
destruction during the war and the
concOmitant decrease in production.
Dollars are plenty-goods are scarce.
This, according to economists, is the
principal cause of high prices. What
can government do to remedy the
condition?
I. II should endeavor TO increase
the supply of commodities. This
it can do by unearthing boarded
supplies, by creating conditions that
will favor production, and by re-
moving conditions that hinder it.
This it is now attempting to do.
,. 1t should stop initiation Of the
currency and endeavor to bring
about the opposite result, i.e.. a
reduction of the amount Of currency.
This is difficult but not altogether
impossible.
3. Irving W. Fisher, Professor of
Economics at Yale University, sew
eral years ago proposed a third
remedy which he still advocates and
claims to be practicable. Our dol
lar has lost part of its former
value because gold is less valuable.
The Government fixes the amount
of gold in the dollar. Let if in
crease the number Of grains of gold
in the dollar and the dollar will be
worth more-will buy more goods
and prices will decline. A dollar
fixed in weight. as il now is, must
be variable il purchasing power be-
cause the value Of gold is variable.
What we need is a gold dollar fixed
in purchasing power and therefore
variable in weight"
What can the public do?
I. Avoid extravaganza and waste. /
Extravaganza is waste, and waste ,
reduces the supply and incfeasesl
the demand of commodities and, ,
therefore, tends TO keep prices up. ,
,. Do not rock the boat Learn /.
10 think clearly and intelligently up
ON the subject, and remember that
public opinion and conduct are re-
of individual opinion and
conduct Every individual should
act as tho the public good depended !
upon his action Selfish ,
ness is shOrt-sightedness, and, like ,
4 boomerang, will sooner or later re-
urn on his own head.
C. ~ FELTON, d
OLD FIDDLERS NIGHT