Page:Walter Renton Ingalls - Current Economic Affairs (1924).pdf/75

Rh level, while rubber, although it has lately had a sharp rise, is much below the prices of 10 years ago. On the other hand, platinum is about five times as high as it was 20 years ago. These instances show that prices can descend to pre-war level. Also that single things may fail to conform to the general trend owing to particular conditions of demand and supply.

The fact that we are now saving for reinvestment less than we used to, and less than we ought to, does not affect the demand for goods in the aggregate. It means that what might be taken for houses and railways is actually taken for less durable purposes. Although this may be reflected in high rents, it may also result in relatively cheap automobiles. However, the total expenditure will be the same and will correspond with the amount of the national income (barring certain questions of external investment, gold movement, etc.). The economic penalty for inadequate saving is paid in shortage of capital goods, which may be a long time in manifesting itself so as to be uncomfortable.

The fundamental thing that curtails supply and leads therefore to high prices is lack of production due to diminution of effort and diversion of too much labor to service. The people who so slacken and who are so diverted have at least the same needs as before. Without any further slackening or diversion to service, prices would tend to rise merely by virtue of increasing population. This is self evident.

It must also be evident that increasing immigration adds to the demand for goods and that the only advantage to be expected in this way is from increasing