Purchasing Power of Money in
[Treasury Department, Bureau Publicity, War Saving.]
OUT that never before in history has an understand
ing of the simple principle of economics been so sorely needed,
a committee of eminent economists engaged in the study of the pur
chasing power of money in war time, issued to-dayits first public
After exhausive investigation this committee has reached its con
clusion unanimously. It would impress upon us the imperative need
of a reduction of consumption and an increase of production, of the
repression of nonessentials, and of promotion of organization and
redirection of industry.
"In meeting the great national readjustment to war conditions,"
the committee says, "we must not let our 'business-as-usual' impulses
prevent the needed saving and shifting of industry, lest we pay a
terrific penalty in higher cost of living and national inefficiency."
The committee finds the public contused and vacillating between
two economic philosophies—the simple, direct, old-fashioned, correct
philosophy of saving and working and the fellacious philosophy, best
epitomized as "business as usual." "One of our greatest perils is
further credit expansion," the committee says, and this peril comes
largely from our lending by borrowing." The committee points out
the right way and the wrong way to lend money to our country.
"The right way," it says, "is the frank and honest way of saving up
the money by spending less or earning more the wrong way is the
cheap and easy, although ultimately costly and painful way, of
lending the Government what we borrow at the bank."
"By giving up nonessentials to buy Government securities," the
committee further says," we allow the Government to buy war es
sentials and at the same time release productive energy from the
making of nonessentials for us to the making of essentials for the Gov
"But," it goes on to say, "if we won't make the needed sacrifice
and perhaps delude ourselves into believing that we do not have to
do so, or even that we ought not to do so, that, on principle, we
favor "business as usual" for ourselves while expecting business
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