PRICES HIGH AND LOW.
[To THE EDITOR OF THE " SPEorwroa."1
SIR—Why do we still harp upon the old question of "When will prices come down?" Prices are up because currency is up. Great as may be the effect of slow working, profiteering, war legacies, and so forth in increasing prices, they are almost negligible compared with the one outstanding cause of the increase of the currency. Only one of two things can restore our presar prices—the reduction of our present currency to 40 per cent. its present size, or the increase of our industry to 250 per cent, of what it now is. The latter is not very likely. It is a fallacy to suppose that the value of money in exchange depends on the extent of our national wealth: it depends on the extent of that part of our wealth which is bought for money, i.e., on a very small part, and one that does not neces- sarily increase with an increase in production.
If before the war the Government had split every sovereign into two, and declared that each half was to be called a whole and be received as such in payment of debts, does anyone suppose that wages and prices would have remained at the same nominal figure? No; of course they would not they would have promptly doubled. Or, if by any feat of hypnotism the new values had at first been accepted they would have given rise to immediate privation, and would have gone on rising till two of the new "sovereigns" took the place of one old one. Then the "vicious circle 0 (which is not a circle at all) would have ceased, because equilibrium would have been obtained. How utterly foolish it is to multiply the currency by two and a-half, and then to ask "when prices are coming down "! What this country needs to recognize is that it is very poor. What it is led to imagine from the sullerfluity of paper pounds is that it is very rich. The inflated currency is responsible in great measure for the series of strikes by (1) rendering them justifi- able in large measure, and (2) leading people to believe that we are rich when we are poor.—I am, Sir, Sc., St. Nicholas Vicarage, Durham. WESTLEY BOTHAMLEY.
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