Charles R. Van Hise

“ From childhood the great majority of our people regarded an abundance of essential commodities as the natural order of our planet; whereas, those who consider the globe as a whole know that a considerable fraction of the people of the world go to bed each night, if not absolutely hungry, at least insufficiently nourished. ”

“ It seems even more strange that the right to sell diseased meats should be regarded as sacred. But this is so recent that probably all here remember the severe struggle to establish the principle that meat should be inspected and found wholesome before being placed upon the market. ”

“ Finally the transportation system of the United States has developed far beyond that of any other country. The railroad mileage of the United States for 100,000,000 people is 40,000 miles greater than for Europe with 450,000,000 people; and, aside from Europe, is much greater than for the more than 1,000,000,000 people inhabiting all the rest of the world. ”

“ An increase demand of one tenth or one fifth may increase prices two, four, or even five fold.
There is no reason to suppose that the excess demand will decrease in the near future; indeed it is probable that next year the demand for commodities will be greater than this year; and this situation of excess demand over the possible supply will almost certainly continue to the end of the war and possibly even longer. So long as the excess demand exists, if supply and demand are allowed to have full play, prices will continue to climb. ”

“ The distribution of coal and coke has been controlled as completely as the price. The coal has gone for the purposes and to the various districts in accordance with the decisions of the Fuel Administration. The amount of coal which goes abroad is also controlled. Thus the amount assigned to Canada is the quantity received last year plus the same percentage of increase as that obtained by the United States.
The prices have not been fixed exclusively upon the basis of the heating power and the location of the coal, but in part upon the basis of the cost of production. ”

“ It is not possible to give percentages of the extent to which the demand exceeds the supply for each commodity; but it is safe to say that the percentages upon the average are not large, probably not more than 20 per cent., and for scarcely any commodity more than 30 to 40 per cent. Thus for coal the demand for the current year over that of last year is 20 per cent, and the excess demand for this year over the production not to exceed 10 per cent. ”

“ Thus antecedent to the war, so far as the control of production and distribution of commodities were concerned, we were mainly dependent upon the law of supply and demand with competition and upon repressive laws which should prevent cooperation and allow a free flow of trade. ”

“ Thus while, from the outbreak of the war, the central powers were in a great measure cut off as export markets for the United States, the needs of the allies were so greatly enhanced as to vastly more than counteract the partial loss of the export market for the central powers. ”

“ Fundamental to all industry is energy. The energy derived from water can not be readily increased suddenly; and therefore the increased requirements must be met by coal. This particular demand came rather slowly; and it was not until the middle of the summer of 1916 that a shortage of coal appeared probable. ”

“ Fundamental to all industry is power; and power is mainly produced by coal and falling water. The coal production of the United States previous to the war was greater than that of Great Britain, Germany and France combined ”

“ But, after the period of concentration came on, it was found as a matter of fact that food and drugs were extensively sold of inferior quality and even dangerous character under false names. After a prolonged contest, the pure food and drug laws were enacted by Congress and by the several states. The manufacturers of food and drugs denounced these regulatory measures as an interference with private business. It seems odd to us now that any one should consider it a right to sell a food or a drug under a false name. ”

“ The prices of foods are advanced; the employees must have higher pay because of the increased cost of food; the raw materials for manufactured articles are advanced; the manufacturer charges a higher price for his articles because he must pay more for his labor and an increased price for his raw materials. The jobber and the retailer did likewise. At each successive stage the advance of prices is made sufficient to cover the increased cost and an additional increment is placed on top. ”

“ The Public Utilities.—All business and industry are so dependent upon transportation, and the public convenience was so interested in having good service without discrimination that, for the railroads and other public utilities, regulation had been adopted as a national policy through the enactment of the Interstate Commerce law and the various state public utilities laws. ”

“ As a result of the work of the Food Administration the skyward movement of prices has been checked, and for some of the most essential commodities such as wheat, the product of wheat flour, and bread, there have been actual reductions in price. Also prices have been stabilized. Dealing in futures for the most essential products has been prohibited and hoarding and speculation prevented. ”

“ In consequence of the collosal transfer of the ranks of industry, there was a great decline in the agricultural and ordinary manufacturing production of Europe. Yet, the many millions of men in the field required more than the usual amounts of food and great quantities of clothing. The demand for ships, guns and munitions was insatiable. The result was an extraordinary call for essential commodities from the United States. ”

“ However, the moderate excess demand, taken in connection with buying in advance of needs, of forestalling by speculators, and combination to control the market, has been sufficient to increase the prices of many essential commodities by 100, 200, 300, and even 400 per cent., and for certain articles greater amounts. It is therefore clear that there is no relation whatever between the excess demand and the increase of prices under the competitive system. ”

“ During the contest for public control, those who advocated the regulation of the public utilities and foods and drugs were often denounced as socialists and were held up for opprobrium as being in favor of the subversion of the fundamental principles of our government. ”

“ Another important cause of the rising prices was that a time when there is an extraordinary demand is especially advantageous for speculators to accumulate larger stores of goods of various kinds and hold them for advances in prices. ”

“ The Antitrust Laws.—When the period of concentration in industry came with modern transportation, and it become possible by combination and cooperation to control the market and thus unduly enhance prices, a remedy for the trusts was demanded by the people. ”

“ Therefore it is not at all surprising that the development of these commissions has been looked upon with suspicion and doubt by the people, in consequence of which it is only slowly and, as proven necessary by irresistible facts, that they have increased in numbers and expanded in functions. ”

“ This practise is in complete contravention to economic theories accepted before the war. The owner of a better property gained all the advantages of cheapness of operation and convenience of transportation. ”

“ Similarly during the spring and summer of 1917, when it was appreciated that there was a shortage in coal, many manufacturers tried to protect their business by accumulating reserves to carry them through the winter. Many of those who required coal for heat did likewise. ”

“ The law confines the control of the Food Administration to the zone between the original producers, that is, the farmers and the farmers associations and the retailers with a business less than $100,000 per annum. The manufacturers and the wholesalers are directly reached by regulation ”