Albuquerque morning journal. [volume] (Albuquerque, N.M.) 1903-1926, 1920-10-26

place the blame and try to find a
way to make the world at least a
little safer for posterity, if he fails
to save himself,
Demand Exceeds Supply.
In seeking a sure foundation up
on which to base his convictions he
finds that it is universally conceded
that demand creates values, and
when in excess of supply inevitably
increases values rapidly and sus-
tains them firmly. Never in the
history of the world has legitimate
demand so greatly exceeded sup
ply of labor and material through
out the world and especially in the
United States. Precedent, there
fore. has no experience to offer
parallel to the present high aver
age value of productive effort, and
for practically everything produced
thereby. in these United States.
The continuance of wartime con-
troll over prices and business, failing
so signally to affect advances in
sugar, may we'll be suspected and
in many instances be demonstrated
to add to costs of dlstflpuuoh'
while usually hindering and OBJ
structing commerce and thus delay
ing healthy Reconstruction.
The federal reserve system was
formed among other purposes 10
utilize agricultural and commerclal
production as a basis of credit TOT
the expansion of currency, seeking
thus to enlarge our facilities Tor
the exchange and distribution OF
wealth to meet adequately all le-
Ultimate demands of the CONNER
cial needs of the wealthiest nation
of the world. The writer believes
there is no more sound OASIS, nor
more stable for currency or credit
than productive wealth.
Federal Reserve Purposes.
Does the fact that during the
war the federal reserve facilities
were used to expand the currency
upon the foundation of national
! Indebtedness, thus utilizing for sell
| preservation accumulated wealth
well within the limit of the nation
capital account, affect seriously the
value of further credit issues upon
| the sound foundation of productive
effort?
In view of the tremendous world
wide demand for labor, material
and manufactured products, when
we have seen has largely and
legitimately raised all COMMODITY
values and strongly tends to sus-
tain them, both in manufacture
and in agriculture, we believe not
Indeed, we believe that owing &c
the very exigencies of the situauor
that has arisen out of the causes
enumerated, the full use of this re-
lief through the federal reserve
system has become far more I'M
nortant to the financial health OF
| the nation, is intrinsically more
valuable, and should be used to the
limit as the only means of avoiding
sudden collapse and for easing US
down from the inevitable imitation
of war time financing.
Very nearly all of the general
increase in values is real, not arl'
fetal, although much is not per
manent, for in no other way Il
value produced or determined eX'
cept by actual demand for use. II
can be rapidly and permanently
destroyed by hamstringing demand
Basis of Values.
/ Humanity in it's financial sys'
TENS, however, has failed properly
to discriminate between values
based upon the necessities Of lie
and those based upon the fads
fancies and luxuries.
The present high cost of Twins
is based upon a real increase U
values, due to nearly universal un
der supply of the necessities OF eX
istence, and however augmented
by speculation, profiteering an'
expansion of currency, these in
fluences are minor in effect an'
in every way subsidiary to tn
main cause. Transportation diffl
culties, however, are a very serlou
factor in costs and lead directl,
to waste. loss and dissipation o
values already created by delaying
and often preventing entirely ina
exchange of commodities thfougl
which alone permanent wealth /
created.
Circulation bears the same rela
ton to the exchange of wealth
that transportation bears to the ex
change of commodities. All 1ou
are vitality interdependent. IN
tremendous waste and loss TN
country is now suffering In TN
breakdown of our transportano
system ought, it would seem, L
emphasize in the minds of all III
exactly similar, but infinitely great
err waste and loss from similar III
adequacy in our financial syster
and the danger of putting on tn
brakes too hard. Apparently IN
analogy is not sufficiently clea
even to financial experts. IN
average business man takes III
financial instruction with his morn
ing paper, and believes the subJec
beyond his comprehension
He believes with the author o
the article quoted above that u
the technicians Of financial force
had not pulled the right levers nj
own end lin a wreck" would al
| ready have been, and though anS
iously fearing lest the worst IS We
to come is thankful for the escap
he cannot visualize and really be
lieves that Cox or Harding will we
save the country in time to say
| him.
| Is q Costly "Check."
This belief is fortified by stats
tics to show how values in wa
| street have been debated an
| speculation has been eliminated D
| high interest rates. Such stats
| tics are easily available; but the
are not conclusive nor san they D
made so; for there are no figure
| whatever available to show even tn
direct effect of these rates in in
| creased costs to general bushes
| and of course none whatever |
| show the indirect effect in bushes
not done at all for lack of credl
and in fear of falling prices. Ther
Il l. tftsIK n