WHAT MAKES HIGH PRICES?
Quick, Herbert
What Makes High Prices? Another View of the Reasons Underlying the Excessive Cost of Living By HERBERT QUICK ME. CLYDE H. TAVENNEE'S discussion of the increased cost of living, in La Follette's of...
...The difference in cost of living between Detroit and Windsor, will be found to exist between Montreal and LaPrairie, or Ste...
...If these succeed, you will never see the prices of either wheat or meats in that province less on the farms than in the United States...
...The other is the plan of raising the revenues of the nation in all departments of government by taxes on unearned increment of values in all forms of land...
...but it is a matter of land-holding just as purely as the ground-rents of the Rookery Building site, and it strongly affects production and the cost of living...
...The benefits of freer trade would be great and obvious...
...A retailer pays more in rent annually in the heart of Detroit, than it costs the Windsor retailer to buy his lot...
...That it sheds some darkness, too, is excusable, Mr...
...Prices go up the elevator...
...But it would not affect the great mass of rents that enter into the cost of living, as I think, even more largely than either tariff or gold-influx...
...This is a question of land-speculation mingled with social ideals—like the maintenance of game preserves in England...
...So with wheat, pork, corn, beef, and all the great agricultural products the prices of which are fixed in the markets of the world...
...Similar differences in favor of Canadian cheapness exist in vegetables, poultry and meats...
...So it is idle, and its produce is nil...
...Detroit retailers charge 42 cents a dozen for eggs, according to Mr...
...Let me suggest some of the things whereon he seems to me to have thrown illumination, and then point out the obscurities—which may be accepted as the misfortune of either Mr...
...One of these days we may have Lloyd-Georges and Winston Spencer Churchills in this country...
...Mr...
...I am inclined to think that the increased cost of living is to be attributed to the tariff only in so far as manufactured goods are concerned, and even here the increased rents of city sites, and factory sites, the increased charge for the lands which produce our metals, and the boost in railway rates justified by railway managers by reference to the increased value of the lands on which right of way and terminals are situated enter very largely into the matter...
...As the increased supply of gold must have operated here and there equally, the 7.7 per cent, advance may be taken for the present as the measure of the outrunning of the gold supply of that of the average of other commodities...
...Cotton has ad-vanced greatly...
...It is perfectly clear that the placing of taxes on monopoly rather than production will increase the supply of produced things, and lessen that of monopolists...
...When we do, we shall have entered upon the task of abolishing monopoly, and with it high cost of living—monopoly in trade, in the earth's surface, and in transportation...
...I remember that Senator McCumber...
...They have a strong railway and elevator combine in Canada, and sometimes and at some places it may put the screws to the farmer more strongly than our railway and grain combine at places in this country ap-plies them to our farmers at the same times...
...The tariff can have no eifect on them...
...Land in Detroit is worth more by the front foot in the retail districts than in Windsor by the city lot...
...Revision downward to the last degree consistent with the administration pledges, would help greatly...
...Free trade in trust-made products, and in those in which we control the world's markets, would lower the cost of living immensely...
...Tavenner makes it quite clear that the increased output of gold cannot be the sole or even the chief cause...
...It even throws some light on this vexed and vexing subject—and that is great praise...
...has stated that in the Canadian towns across the North Da-kota line, similar differences—though not so great—exist...
...All history shows that an influx of gold 'of a sudden sort lifts all prices except that of labor...
...It is all a matter of marketing...
...Where prices are fixed in the world's markets, rent cannot affect them, except as the advance of land values all over the world tends to encourage the holding of land out of use, and thus produce an artificial scarcity of both land and crops...
...Rents a Potent Factor THE item of rent is scarcely less—indeed it may be even more —in the expense of doing business on farms...
...All the com-petition there is in the world, in cotton, we have to meet under the tariff just as we should have to meet it under free trade...
...Tavenner, while Windsor merchants, only 2,500 feet away, sell them for 34 cents...
...Tavenner states that wheat and corn are bringing eleven cents and eighteen cents respectively more per bushel in Detroit, Michigan, than in Windsor, Canada, a town half a mile away across the Detroit Eiver...
...wages climb the stairs...
...The fact of its being coined or not seems to have little effect...
...Wheat all over the United States is worth the Liverpool price less the con of getting it to market...
...Tavenner not being, I believe, an archangel...
...It might, in fact, lower the land-value element in the problem, by destroying the monoply now enjoyed of making things on certain sites...
...Where the Tariff Enters In THESE THINGS are the effect of increase in population, and not to any such extent as Mr...
...low cost of living is wealth— if by cost one means the human effort necessary to acquire the price...
...One is the decimation of the people of the country...
...High cost of living is poverty...
...or sheep-walks in Scotland...
...CLYDE H. TAVENNEE'S discussion of the increased cost of living, in La Follette's of the 12th is very interesting...
...Land is sold within a few miles of London at less per acre than at similar distances from Chicago, Kansas City or Omaha...
...The Province of Winni-peg is entering upon the building of government-owned elevators, as well as government-owned stock-yards and packinghouses...
...And rent is paid on the nail over the counter in the price of the day's meal...
...The great Argentine haciendados, who are potentially the greatest factors outside the United States in the supply of wheat, find that it is more pleasant, if not more profitable, under the taxation laws they have themselves enacted, to seed their wheat lands down to alfalfa and grass and to graze cattle on them...
...The ultimate consumer is the victim, of course, Some of it may come out of the tenant farmer in a lowered standard of living, but not much...
...Two ways suggest themselves whereby the burden of increasing rents may be lessened...
...And where prices are fixed by the local supply, like those of truckers' produce, the rent of land—or the price of it, which is only another way of stating it—enters directly into the cost of living at the producing end as well as the selling...
...But it must be remembered that Detroit is a city, while Windsor is but a village...
...but if he will follow it earnestly, he will find that it runs out of the backdoor, and right to the strong-box of the landlord...
...but the tariff could have had no effect on the price of a crop with which we supply the world...
...That is the principle that gave warrant to Lloyd-George in the last British campaign to say that the budget tax on land values is a step in the direction of "the elimination of poverty from British civilization...
...The "abandoned farm" of which we hear so much is not worthless or naturally unproductive land, but merely land for which so much is asked in rent or purchase price that it cannot be economically worked...
...but the differences must be about as described between values in a city of well toward half a million and a town of 20,000 or less...
...Agricultural lands which in 1896 were worth $25 per acre are now bringing from $100 to $200 and even more...
...Land in the United States has reached prices that must profoundly affect the cost of farm products...
...TAVENNER seems to shed darkness on the matter, however, when he attributes the whole of the advance...
...Tavenner shows that while prices have gone up here since 1896 by 34.3 per cent., they have advanced in Great Britain but 7.7 per cent...
...Tavenner or myself, and the fault of neither of us...
...I mean the increase of the cost of doing business in the cities...
...Farm lands arc worth more per acre in Iowa than in Kent...
...This may be rejected as inadvisable, if not impracticable...
...for it will make production profitable, and carried to its logical end, will render monopoly unprofitable...
...Wheat in all Canada is worth the| Liverpool price less the cost of getting it to market...
...Tavenner suggests to the tariff...
...But wherever the differences exist, they cannot be on acccount of the tariff...
...I may be overstating these matters a little...
...Rose, nearby Canadian villages, or between Detroit and the rural towns of Michigan...
...That being fixed by the standard of living of laborers, goes up only as the agony of high cost of living, acting through organizations of laborers or through emigration to cheap lands forces them up...
...Secretary Wilson has a red-hot clue leading to the door of the retailer as the criminal who makes life so truly dear to us all...
...But that is a matter of grace, and not of economic law...
...Land speculation alone prevents Western Canada from sending to market half a billion bushels of wheat every year—and this would cut down the price of living all over the world...
...High Tariff not the Sole Cause MB...
...In all countries under the gold standard, this cause must operate uniformly, since gold flows from nation to nation according to its relative cheapness or deamess...
...I have been personally unable to find these differences, save in isolated cases...
...Someone has to pay the increased rental, or interest on purchase price...
...The cost of getting it to market is a railway and elevator problem, purely...
...That this factor is important cannot be doubted...
...here over that in Great Britain, to the tariff...
...The Case of the Retailer AS for the prices of things at retail, which is of the greatest interest to people who eat things and wear things, Mr, Tavenner neglects the most important economic change which has taken place in the United States since 1896—greater even than the influx of gold...
...That standard was always about as low as that of any other in America...
...But Mr...
...While gold remains the commodity against which all values are measured, the increasing plentifulness of gold must tend to lift prices, because all commodities, the supply of which is not increased in proportion, will be worth per unit more grains of gold than when gold was scarcer...
...If something else had not aided the influx of gold, we should have to pay for our living, then, only about 8 per cent, more than fifteen years ago...
...For instance, it might cut down the land values which make up two-thirds of the capitalization of the Steel-Trust and of the unearned increment in the coal lands...
Vol. 2 • February 1910 • No. 8
