Southwest Washington labor press. [volume] (Hoquiam, Wash.) 19??-19??, 1927-02-04

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aa1 Eall S. he q alIEIaa 81 euf=
fenc9 rise end lalI ana lhat this
e Sc whether 1Ae currency used
e gold e. paper money q checks
against bank deposits. BuE @
know 3 thing s. s. anf 70 see
how Il s. s afe I've different
things Xoa may know that the
engine II q steam hoat makes tie
boat SO. bus that does not foiI
5u how It does Il Let e nov.
e The child says. zee the wheels
o round Let pc Issue los o.
extra currency and see what &C.
ton Il takes = make Tou pay
more for Ist aa cay your gro
ceries.
Tie answer IS that more money
q tbs and pockets means mote
lavish spending. People ere wiz
ing p naV >cazs fnr goods, be-
rausa --sg have more money With
--ru1oH 70 pay
70 male the picture vivid. let
Is imagine financial 6anta
Claus let % suppose Tat. BE-
f9Ho Bis visit. Tie average amount
If money IL actual Circulation
sIntss Il ahenf
$1,000 per capita On Christmas
Day Santa Claus doubles Ehla
amount Each individual person.
firm and bank suadenIy haa on
hand twice as much Is before.
NOW while the amount ear
fIsd By any one individual neess-
sa1ily flnctuates because of bis
expenditures aHa Receipts. f. Z
large gfonp Of people the eHer=
age amoun4 carried usually
fluctuates but little. II. then, an
addition TO the total circulation
a suddenly made 30 large as to
put forty extra collars per capita
IN the pockets q the people.
everybody suddenly feels flush.
Everybody suddenly becomes bit
reckless n his spending Of
course. II everybody should hoard
the extra money II stockings of
in safes or bury Il In lhe eaFth
or drop It into the see. It would
have no effect on prices. But.
what they actually do Is To make
use OF It either BY expanding 1t.
foF goods or b. doposifing 4 IN
banks and the banks viii expend
it. Moreover. this extra spend.
ing viii mostly b done ID q few
days.
Suppose, Is Is probably about
the truth. that the average indi-
vidnal ordinarily expenas or turns
over his original $40 IN about
two weeks. This la about three
dollars day. or over. $500. 000.
600 a day for the entire country
OF over 100 100000 people.
II then, within five days after
his chFiaImaa present the aver
as person should expend fHa 3D.
di&onal $40. which spread over
five days would be at the rate
Of eight dollars day. the re-
sstl would be an extra $780,
OO0, O00Hpef day Tor the nation.
Such a sudden briskneas IN trade
would astonish and delight the
shopkeepers, They would pronp-
tly raise their prices. Indeed IL
they didn't their stocks Of goods
in many cases. would be entirely
depleted IN few days.
At first sight. II might seem
that It would. according to this
supposition, only require i've
days for every one to get rid Of
his extra $40. so that the furry
in prices would be only temporary.
Such reasoning. however, is
wrong when the extra money d
spent. society as a whole IS not
rid Of It. What about the shop
keeper7 The shopkeeper first
had his till-money doubled by
Santa Claus. Then he received
the extra cash Of his customer.
So that be. even more than the
average man, viii seek 20 make
some use Of the surplus He will
spend It for pleasure Or invest Il
in goods Tor his business, or 90
post it IL his bank. In either
case It keeps ON being spent. 1t
keeps on going along to some
other person. Il does not disan-
pear when It Is spent the tbs
time. The average person btili
has so more money than hs.
fore to buy goods With: but 10.
body has more goods to sell. The
effects on prices viii be upward:
and this effect VII 90 on until
prices have reached q sulficlaAtIy
high level to stop the process.
How Tar viii prices rise? I'M
less some other cause enters. they
win exactly double. For as long
as prices fail to double. the snf-
pluses and the tendency to spend
them will continue to exist Tho
average man viii still think $50
too big to carry as an average
cash balance. Individuals. trades
Ia and bankers will All be try
ing 70 make use OF their sur
plus. and their efforts 10 90 So
must tend to raise prices Only
when prices have reached double
eIheIr original level win the $50
cease to be regarded ty It's pes
SCISSORS as excessive. At that slime.
since $50 viii then buy only what
$40 bought before, the $50 viii
no longer seem too much 10 carry
Cor an average balance. Il was
AZ comuafffgon 81 hueara thai