New-York tribune., 1920-05-31
Four Solutions
OF High Living g
Cost Offered
Republican Advisory Com
mittee Urges Avoidance
Of Currency Initiation
and Revised Tax System
Public Economy Vital
Private Thrift Essential;
Cost PLUS Contracts
During War Denounced

10 :
a. on policies and platform. Of which
.ormer Senator Ogden L, Mills is chair
80, is set forth in an abstract issued
..s.erdav by the national committee.
The committees experts say that The
,r;n,e cause Of the nigh cost Of living.
sr,t and foremost, has been a so per
rent depreciation in the purchasing
7ower Of the dollar, due TO expansion
- our currency and credit.
Asa remedy for the present financial
;ns the committee recommends a rigor-
ess avoidance Of currency imitation, pub
lie economy. private thrift and a re-
vision Of taxation.
Abstract of Findng
The advisory committees abstract is
n psrt as follows:
The term high cost of living means
,se great rise IN prices since 1914.
The accepted measure Of the rise
n commodity prices 3 the index num-
bsr computed by the United States
Bureau Of Labor of (a) wholesale COM
modify prices and of (b) retail food
prees. According to this measure, the
Increase in prices from d base line Of
100 in 1913. TO March, 1920, has been to
o-3 Tor wholesale commodity prices 20
egJ for retail food prices, and to 1873
October 1919 for an aggregate of tho
..vsral items food, clothing, fuel and
reht. housing, furniture and furnish
fags, miscellaneous that enter into an
ordinary family budget.
The effect Of this abnormal increase
on general prices has been to inf1ict the
most serious injury upon all classes
dependent upon fixed incomes or slowly
adjustable earnings. Affecting both
r.ch and poor alike. the relative de-
probation suffered by those Of modest
income and earn ngs has been very
much greater. The groups affected in
,his way have been:
"fA) Those in possession of (a) saY-
;ngs deposits; CbJ Insurance policies;
f,i Investment holdings.
"(B) Those dependent upon (a) pen
sion: and annuities; (b) fixed allow
aaces Of all nds.
".Cl Those in receipt of (a) salaries;
lbl wages.
THE influence of rising prices upon
s1ch accumulations has been to reduce
cent since 1914.
Bank Depositors Suffer
'In other words, the savings bank
depositor the beneficiary of insurance
policies, the possessor Of building and
loan association credits, the owner of
securities and investments, has had
taken from him in the last five years
in substance one-h half Of that which he
had put aside and supposed himself to
possess. Similar hardship has been
imposed upon those in receipt of an
ruities and fixed allowances of various
dnds.
Little need be said as to the plight
Of salaried classes consequent upon
the increased cost Of living; the fact
is one of widespread and intimate eX-
psrieuce. 1t is an economic common
pace that in period of rising prices
wages advance more slowly than com
modify and service prices, and salaries
more slowly than wages.
Our knowledge as TO wage advanc es
rom 1914 to 1920 is grossly made
quate. From such data, supplemented
by specific experience, it seems likely
that the wages Of well-organized,
ss!l}ed workers and of unorganized
but favorably located tas to proximity
70 cantonments, munition plants, ship
Yards, VAR irdustries) unskilled work
ers have Increased since 1913-14 as
much q the cost of living, and in some
cases have gone much beyond. 1t is
equally probable that the wage in
ereases which other important groups
Of both skilled and unskllled workers
have received in the last FIVE ye.rs
have been materially less than the cor
fr
Excessive Gains for Some
-Just as swiftly rising prices have
inflicted grave injury upon working
and middle class ouseholds, they have
conferred excessive gains upon favored
groups of manufacturers, whol salers
and retailers. This does not necessarily
inply uNscrupy ious business methods
nor h'ee'tmate practices.
In tracing the factors responsible
fof the sensational rise of prices be
'Ween 1914 and 1920 il ia evident that
We have 10 do, in the main, with one
genera cause rather than with body
oi Particular causes, and that this gen
eral cause is L timate and basic and
not proNImate and superficial.
This prime cause has been, first
ana foremost, q 80 per cent deDrecia-
dollar, due TO the gross expansion of
our currency and credit
As compared with the spring of 1914
the eve of the great war-the people
q the United States are carrying on
'7eir business at the present time with
g.acucaily twice a. much money and
pauk deposits There has been an in
Vfase in the actual circulating medi-
I'm Of To country from $3,402 .0l6,427
TR june 30. 1914, to 5646,11,213 on
ieoruarV /, 1920, an increase IN the
o1oSlts OF national banks, state banks
trust companies from sl3,430 000,
VlO on June 30, 1914, to S25.73l 100000
% June 30, 1919, and an increase in
ne individual deposits subject to check
the national banks alone from S.
gV'i47 600 on June 80, 1919, to $9.682,-
4o.Uo0 on November II, 1919. Alto
fther it is likely that the country is
.| transacting its business with $i5,-
@g0Qo000 more circulating medium
10 deposits than five years ago.
Errors in Financing
Reliance upon certificates Of in
ltedness in connection with war bor-
,""'ng IN the period of our belhger-
Eey may perhaps be explained and ex-
SU Dy tHe eHlgenClcS OF the war
Tnod Not even this justification can
y found for the resumption of Ger
aacate borrowing at artificially low
.s'es eight months after the armistice
ad sad the continued maintenance of ar
"aheially low discount rates.
Since August /. 1919. the Treasury
lSs emitted issue after issue, first of
lan Ito be distinguished from Liberty
sa or Victory note anticipatory
ssQesl and later taX certificates