Knitwit by Marjorie Hill Not long ago ambition called When I had time to fill, And balls of yarn and needles lured Me on to try my skill. The project seemed an easy one. Why, all I had to do Was buy a book of sweater styles, Sit down, and follow through. My difficulties then began I thought I'd lose my mind. I didn't know a ball of yarn Could be so hard to wind. With broken needles, tangled yarn, Lost stitches and the like My path was strewn, and yet I swore I'd not give up the fight, For soon the day would come when I Could say with inward glee, "Why, yes, I made it all myself," And smile with modesty. But now will I admit defeat. My reason is, to-wit, In spite of all my trials and pains The sweater doesn't fit. Page Eighteen by O. M. Clark What determines whether prices are high or low? The price level is the relation between money in circulation and goods produced and being marketed. In a depression the quantity of goods produced is greater than the quantity of money being circulated. Although production has declined, in a depression money has declined still more; thus we find prices low. Money is a flighty thing. It used to be tied down by hard bullion, the circulation of gold and silver, and by little use of paper money and checks. Now it is more flexible for we are off the gold standard, we have devaluated our money, we have elastic credit through our modern banking and credit institutions and through government expansion of credit money, war bonds and other facilities. So money is not tied down as it used to be. It has now expanded to nearly four times what it was about ten years ago. The amount of money in circulation depends upon the combination of such factors as these: (1) The actual amount of coin, paper, checks and drafts, etc.; (2) credit extensions made by banks and others; (3) government policies as to credit and new issues of paper money and coin; and (4) the speed with which money circulates, for when business is brisk money seems round and rolls rather freely among us, but in dull times much of it becomes flat and stacks up. The quantity of goods purchased depends a good deal on the amount of goods produced, imports and exports, whether there is rationing or a free market, the optimism of the people, and the number of dollars in their pocketbooks. In a depression, with unemployment of resources and men, a government could print money and pay it to men to produce goods. If wisely pursued, such a policy could lick a depression with little if any harmful results. In normal times if such there be it is important that goods and money balance well and sustain a healthy equilibrium. During war time, a government needs tremendous quantities of goods. Desiring to retain democratic methods as far as possible, governments usually try to obtain these goods through purchase. This results in less goods for the layman to consume but in more dollars in circulation, because the government through the sale of bonds expands its credit and currency sufficiently to make such purchases. Prices would naturally go away up, but the government offsets such pressure by rationing and restrictions, by efforts to expand production and curb civilian consumption, by heavy taxes, and by the sale of bonds to individuals to drain off the surplus money. In a postwar period, wartime conditions and needs prevail for some time, generally being followed by a period of readjustment wherein civilian production expands. Then after heavy taxes have liquidated much of the war debt and drained off surplus money, taxes might be lifted considerably on those whose purchases are otherwise curbed by heavy taxation. Thus the great body of civilians should have sufficient income to channel from the market the goods produced from industry, and a healthy peacetime balance of money in circulation and goods produced could obtain. But at the present time we find that European needs are so tremendous that we are impelled to ship abroad vast quantities of goods, thus cutting down the amounts for domestic market. If we really wished to keep prices down, we should now have careful rationing and continued high taxes, especially on profits and large incomes. When people with money go to buy quantities of goods and find there are less goods available than they want to buy, prices are bid up. But with an unwillingness to return to rationing and the need of supplying Europe, we find ourselves with a short supply of goods even though our production is near full capacity. And as to money, with an unwillingness to curb credit and to keep high taxes which could drain off surplus funds, coupled with high wages and huge profits in numbers of dollars, we have an expanded currency. The natural result is high prices. Thus we ordered inflation. Page Nineteen