Milford chronicle., 1951-03-16

y
government securities in order to prevent
more imitation. 1t cannot do so under exist
ing Treasury policy. The upshot is that your
dollar steadily loses value-and your savings
buy less and less.
WHAT YOUR LABOR WILL BUY
The Bureau of Labor Statistics recently
issued a new study comparing u. S. work.
erS' food purchasing power with that of
workers in other countries. In only one
country, Australia, is less working time re-
quired than in the u. S. to buy a given
amount of food. In most cases, the advan-
tage in favor of the American worker is tre-
mendOuS. To take the most extreme example,
an hours work by an American will buy
about seven times as much food as an hours
work by his Russian equivalent. BIS also
pointed out that between 1898 and the
spring of 1850; U. S. food prices less than
doubled and hourly earnings more than
doubled - increasing the power of Ameri-
can workers earnings in terms of food at the
market by about II per cent. Facts such as
these may not take the sting out of high
prices, but they do show how far superior
the American standard of living and the
American earning power is to the rest of
the world. That is not true of food alone
other surveys and analyses, dealing with
clothing, home appliances, and all manner
of consumer goods, have reached similar con-
illusions. The average American, by cOmpar-
iSOn, is the most favored of human beings.
This is one of the fruits of our magnificent
productive enterprise, in agriculture and
manufacturing industry. 1t is also the re-
suit of our magnificent system of retail dis
tributiOn-a fact which should be remem-
bered now that the stOrekeeper is so often
blamed for price increases which are totally
ion opiVy
us more and better goods of all kinds. Mass
distribution, which the chain system pio-
neered and the independents have adapted to
their own use so effectively, brings us those
goods at the lowest possible cost.
5000
WHY YOUR DOLLAR GETS CHEAPER
Most economists regard as the main cause
of price imitation the Administrations policy
of forcing the Federal Reserve Banks to buy
more and more government bonds in order
to keep their price above par. The President
once justified this policy on the grounds that
after the First World War the value of Lib
erty bonds dropped to about $50 and that
he did not want the people who hold govern
ment bonds now to suffer such loss. Now
none of the Liberty bonds ever fell quite as
low as 80. Some issues did fall within a few
points of that price, but only for a few
months in 1920 And the decline affected
only those people who were forced to sell
in those months. The maximum loss even
of these people was only about 18 per cent
Today, on the other hand, mainly as a result
of the very bOnd-pegging and low-interest
policies on which Mr. Truman has insisted
a government bond bought in 1912 has pur-
chasing power in terms of consumer prices
of only 20 per cent Of what it had then. This
is a real depreciation of 80 per cent. Which
pOlicy-that Of the First or the Second World
War-was worse for the bondholders? Every
time the Federal Reserve Banks are forced
to buy more bonds, new sources of credit are
established. This means more demand is
created for available goods and services, and
so prices keep on rising and dollar buys
destination. It's time we stopped blam.
ing initiation on industry, labor, farming, re.
failing, or any other group, Let's look al
the cause, not the synptoms-and the cause
is government credit policies. which have
cheapened the dollar and are still cheapeninp
it.