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THE K I N G ’ S BUS I NES S
January, 1942
• Linked with the word "war” in many minds has been another dread symbol of hardship, "inflation.” From the pen of a Christian of wide experience in the financial world comes this answer to a vital problem that is both material and spiritual.
Can Inflation Be Controlled? By ERLING C. OLSEN New York, N. Y. I LIVE IN SCARSDALE, New York, which is a suburb twenty - five miles from the heart of New York
But it may be interesting to observe at least one figure. The United States Government compiles an index* on the cost o f living. That index has been steadily rising from a post-war low of 92.4 during the year 1933 to 98.1 during the relatively typical re covery year of—1935. Today it stands roughly about 10 points above that mark and, as I believe, is heading higher. What Js Inflation? When one talks about “inflation,” he is obliged to determine just what is inflation and what is meant by the use of the term. To the average wage or salary earner, thg farmer or small business man, the word “inflation” carries- a definite suggestion, even though each may not be ready with a definition nor' be prepared to define his understanding of the word. But taking the country by and large, it is safe to say that the average indi vidual looks at inflation from the point of view of the higher cost of living. The economist would put that phrase into more formal language. He would call it “commodify price infla tion.” It is self-evident that there is a very close relationship between the price level of commodities and the cost of living. Furthermore, the changes in the price level of commodities are re flected sooner or later in the total of weekly or monthly living expenses. Most of us men havfe been hearing *The Governm ent’s index o f living costs is computed by the United States Department of Labor, fo r the purpose o f measuring the trend of essential expenditures o f the salary and wage earner. It is based on a study o f how the .small man’s budget is actually distributed. From this study they found that food cosjs repre - seht about 3fi;% o f the budget, miscellaneous expenses about 27%. rent about 18 % , clothing 11% , fuel and electricity 6%, and house fur nishings k% . The m iscellaneous group in cludes transportation, recreation, medical services, and so forth. The average o f 1935 to 1939 is taken as the base point.
from our wives, if not daily, at least two or three times a week, of what it is costing at the neighborhood store for the food that is placed upon our tables to eat. Our clothing is costing more. Rents are higher. There is hardly a thing we can buy but we find it costs more than what it did even a few months ago. Recently, I attended a Board meet ing of a certain Christian work in the East. On that Board is a gentle man associated in an executive posi tion with a branch of a large mail order house. He reported that business was flourishing. I inquired how much of an increase they had experienced. He responded that the increase of the past six months was about 50% com pared with the preceding Six months. I asked whether that increase ' was based largely on dbllar value or in creased sales. In other words, were more goods sold, and if so, approxi mately how much? My friend answer ed that about 15% of the increase represented increased prices, but they would have been able to increase their business at least another 10 or 15% if they had had the merchan dise to sell. He added that in their largest store in this particular city (and it is a vast store), there was only one washing machine in the whole building to sell. I asked about possible further rises in prices, and he answered that by the spring of the y e a r , he thought the increase would total approximately 25%, He immediately added, “We are not prof iteering—that increase is represented by the increase in the cost of goods to us, and in the final analysis, labor is getting it.” My personal opinion is that while my friend was correct in his statement as far as he knew, I have serious doubts concerning the accuracy in fact. Far too many con cerns, in my judgment, have taken advantage of the inflationary “bug” to increase prices to an unjustifiable level. They have supposed that- they could do this without serious detec tion or restraint.
City. Close by the railroad station runs the Bronx River.‘ The other morn ing I was unusually impressed by a sight that caught my eye which can be witnessed almost every morning during the fall season. There was a flock of wild ducks swimming about in the river and coming up on the banks to enjoy their morning break fast. They were being #fed through the generosity of a few suburbanites. Some of the birds were so tame that they came right up to their benefac tors and snapped the bread out of their hands. I watched that scerié for a few mo ments while awaiting the arrival of the train, and as I did, I thought of the words of our Lord when He said to His disciples: “Ye cannot servé God and mammon. Therefore I say unto you, Take no thought for your life, what ye shall eat, or what ye shall drink; nor yet for your body, what ye shall put on. Is not the life more than meat, and the body than raiment? Behold the fowls of the air; for they sow not, neither do they reap, nor gather into barns; yet your heavenly Father feedeth them. Are ye not much better than they?” (Matt. 6:24-26). As far as any one of us knows, it did not make any difference to those ducks who fed them—what hand the Lord used, since in the final analysis our Lord said it was1 our heavenly Father that fed them. With the above incident as a back ground, let us examine our subject, bearing clearly in mind that our Lord said, “Ye cannot serve God and mam mon.” That we are in the midst of an inflationary period is too evident to need statistics to support the asser tion. [ Having been for som e lime the Executive Vice President o f the Fitch Investors Service, one o f the largest nationally recognized firfns o f fin'll' ‘ '"'l '«'////*■ f : turns a sid e , from his custom ary business o f giving advice about investm ents to make a spiritual application of the facts he sees. — E ditor .]
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