Albuquerque morning journal. [volume] (Albuquerque, N.M.) 1903-1926, 1922-08-06
VICIOUS CIRCLE GETS NO.
WHERE.

There is always a margin of err
ror between the actual and the ap-
parent. That statement applies
particularly to all considerations of
\ money values at the present time.
The individual and the public mind
are apt to be confused by the fact
that money values, being legally
standardized, are commonly &C.
copied as fixed and Interchangeable.
1t is rather disconcerting to dis
cover that the value of the money
! OF any nation, solvent or insolvent,
prosperous or distressed, Is purely
relative and sometimes violently
.fluctuating, whereas the cost Of
tliving which appears to fluctuate
Alarmingly is really a more stable
Quantity than money value.
The real value of money Is rep
resented entirely by its purchasing
power when invested in the neces-
stiles of life. 1t is often the case
that when the cost of necessities
appears to have scared analysis of
the case will show that it is the
dollar, pound sterling, franc, mark
or ruble that has fallen in value.
The war threw everything out of
step and after several years Of liv-
ing under a system of artificial
values some of us have lost our
bearings and need a readjustment
of our compass and chronometer
before we can orient ourselves as
to time and place and values.
A monumental work toward re-
adjustment has been accomplished
by the National Bureau of Econo-
mic Research, in which the main
endeavor was to determine the in
come of the United States-not the
government, but the nation or the
people. A corps of experts IN
economic research has spent more
than year upon this task. Its
findings are quite convincing be-
cause. after adopting two quite d.
verse methods of arriving at their
point of determination, the fig-
ures show astonishing agreement
with an almost negligible percent
age of variation.
II Is certain tables in the lbo
pages OF the first volume OF the
report which make the strongest
appeal to the casual reader. Will
ford I. King of the research starr
made his investigation of national
income through the sources OF pro-
duction while Oswald w. knauth
took for his bases of estimate the
official returns of the internal rev.
enue office on the income tax. the
greatest difference in the two COM
putations for any year since l9oS
is a little less than Z per cent put
the average for the period is less
than half that difference.
Every person knows that while
his income is considerably larger
than It was before the war-from
30 to so per cent say, as measured
In dollars, he has little idea as to
how II rates when the PURCHASING
mower of the dollar of--say 1918
is compared with that of the yeai
of 1918, before the war was even
apparent on the horizon.
This economic research shows
that as early as 1910 there was
marked increase of the per capita
income of citizens of the United
states in 1909 1t was 1919. In
1918 it had advanced to 1854. The
/ war in its first year, 1914. caused
a decrease of income to 1883 PEI
capita. During the prevalence oil
the war it advanced as follows
1915. ss5s; 1916, s44e; 1915 sezS'
1918, 1856.
Apparently. the per capita earn.
ing or income had increase 10
ner cent. This, however, was very
far from being true because
the purchasing power OF the dollai
had undergone an astonishlne
sshrinkage. Compared on the pa
IN Of relative purchasing powers
theSper capita income of 1913 was
ss54Nwhile the per capita income
Of 1918 was only 1872. instead o.
s5ss. which was the dollars ac'
tually received.
And now that prosperity appear
TO be steadily returning have We
the average person, who figures as
"per capita" learned anything
from this curious experience? Ap'
narentIy not. We have been cap.
tiyated by the fictitious values aho
have come to regard actual ano
relative values with contempt. Ine
vicious circle of alternating boosts
81 the cost of living and the scale
of wages gets nowhere because one
must Immediately respond TO any
change in the rating OF the othet
EVERY boost in the scale OF COSTS
NJ wages and commodities newt
ably accomplishes the same resui
which is the depreciation OF I'M
values of the dollar as medium
~ exchange. All the government
standards in the world cannot AZ,
terfere with the working OF Uni