Evening star., 1921-05-08
Plan to Instruct U, S. When
A Dollar Is Not a Dollar

earns only 25 or 10 per cent on
each turnover. is better than
capital lying idle and accumulat-
ing nothing but rust and cobwcbs.
j: \ X r.
That reduced prices will increase
consumption and stimulate buying
is the unanimous verdict of the
ablest students of the economic
situation. Price enhancement
which curtails consumption is not
only an economic folly, but in
some cases it amounts to a social
crime.
The owner of large dairy farm
in the neighborhood of Washing
ton said the other day that while
his cows were producing a hun
dred gallons of milk a day, the
Washington dealers would accept
from him only sixty gallons day.
the explanation of the dealers be-
ing that they didn't want to break
prices through an oversupply.
The forty other gallons a day he
has to feed to his hogs. though he
has a great abundance of much
cheaper hog feed.
If the same curtailment rule is
applied impartially to other pro-
ducers in the territory, Washing
tons milk supply is arbitrarily
reduced 40 per cent. Does any
1nuht thar "a S,1hSf a al
reduction would greatly increase
the consumption of milk: Any
doctor will testify that the aver
age city family, especially where
there are children, ought to use
twice as much milk as it now uses.
IL the case of the milk producers
and distributors stood alone it
wouldn't matter SO much. nor in
justice could il be insisted that
they reduce their prices while the
prices Of all the things they had
to buy remained up. But the logic
in the case of one commodity ap
plies generally to all others. 1t is
either a vicious circle" or a be
either direction. depending upon the
impetus of the start. Higher prices
means decreased consumption; de-
creased consumption means de-
creased productions; decreased pro-
duction means a lessened wage
with which to buy the higher
priced commodities. Or, if the
start is in the other direction:
Lowered prices means increased
consumption; increased consump-
duction; increased production
means steadier employment and
an increased total wage with
which to buy the lower-priced
commodities. The circle has
been swinging in the wrong direc-
ton. The effort now to be made
is to get it started going the
other way.
peluded by the artificial pros
perity of the war period, there
has sprung up a school of econo-
mists who are teaching that high
wages and high commodity prices
is a condition highly to be desired.
The necessity Of combating the
TEACHINGS of these economists will
make great deal more difficult
the task of getting back to NOR
malcy.'
The economists who are teaching
this doctrine lose sight of the
fact that during the war govern
ments, with reckless prodigality,
were spending not only the past
savings of their peoples, but were
cashing in their future earnings
and paying out the proceeds with
little regard to prices or values.
They also lose sight Of the fact
that the United States is not a
world to itself, and that foreign
trade, small as is its volume in
proportion to the whole volume OF
American trade, is absolutely es-
sential to American prosperity.
The flush prosperity of the war
period was possible only because
there was limitless foreign de-
mand, without regard to price, for
every surplus thing this country
could produce. Mines and mills
and men are idle today because
this foreign demand has fallen
away until now it is below even
the pre-war volume. 1t will not
come back, even to the pre-War
volume. SO long as costs OF pro-
duction in this country are so to 100
per cent above pre-War production
costs. And until it does come
back there will continue TO be
idle mines and mills and men.
Copyright. 1921. by The Washington STAR