.

Seventh: That an analysis of these margins will show that they can be
constructively diminished but that, regrettable as it is, the
prosecution of profiteers will not do it.

Eighth: That the problem must be solved, if our agriculture is to be
maintained and if the balance between agriculture and general industry
is to be preserved so as to prevent our becoming dependent upon imports
for food, with a train of industrial and national dangers.

PRESENT PRICES DUE TO INFLATION AND SHORTAGE IN WORLD PRODUCTION

Our war inflation does not lie so much in our increased gold and
currency. Our currency per capita has increased by perhaps 25 or 30 per
cent, but, compared to European practice of currency inflations of 200
to 800 per cent, our conduct has been provident indeed. This is not,
however, the real area of inflation. It lies in the expansion of our
bank credits. If we exclude the savings bank as not being credit
institutions in the ordinary sense, and if we compile the commercial
bank deposits, we still no doubt gather in some real savings, but
nevertheless the figures show a considerable color of inflation
somewhere. No one need think we have gotten so suddenly rich as the
money complexion of these figures might indicate. At the outset it
should be emphasized that all figures of this kind are subject to
dispute and interpretation; but, after all such deductions, the
indication of tendencies remains.

--------------------------------------
| | Per Cent
| Bank Deposits | Change
Year | Total | from 1913
--------------------------------------
1913 | 11,390,918,596 | 100.0
1914 | 11,974,760,593 | 105.1
1915 | 12,282,097,638 | 107.8
1916 | 15,398,090,701 | 135.2
1917 | 18,444,103,496 | 161.9
1918 | 20,425,067,839 | 179.3
1919 | 24,971,784,000 | 219.2
--------------------------------------

It will be accepted at once that the volume of bank deposits must grow
with increased commodity production and therefore we may roughly examine
into this as well. If we combine the tonnage productivity of
agriculture, metals, coal, salt, cement, lumber and the quarries, we
shall cover the great bulk of our products. These figures also must be
taken as merely indicating the tendencies of the times.

-------------------------------------
| | Per Cent
| Production | Change
Year | in Tons | from 1913
----