W.yerhaeusef 4-Squure Lumber and Services

This, they thought, would reduce the demand and thus lower prices.

rt has been said ah"a ;"*lr" .'*r"" and good ,men,, who cling to that economic heresy. But if true, then those who are wise are not good, and those who are good are not wise. Each successive tax increase has promptly boosted the wage-price spiral upward. And while Washington appears to view the situation with equanimity, the insatiable appetite for money that never seems to slacken, causes natural anxiety among the people. How could it do else?

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The law of diminishing returns has an apt illustration in the pay of t\nlo great baseball players. In 1931 Babe Ruth's salary was $8Q00O and he took home $69,000. In 1950 Ted Williams' salary was 9125,frX), and he took home $62,000. And the new tax bill will cut Williams'take-home pay much lower. Of course Williams will be able to eat even with his reduced take-home, but the same rule of deducts applies to the small as well as the large salaried people. Not only Ted Williams, Junior, but yOU.

Recently the Bureau of Labor Statistics announced officially that the cost of living has reached an all-time high. That announcement was a surprise to few folkE small folks especially. There are plenty of people who, returning from the market with ten dollars worth of eatables in a modest paper sack, would have guessed it was-NOT 1g6 per

Pioneer Shippers of Philippine Mohogonyr Jopcnese Ook, and Jopcnese Birch LUMBER, we hove now cdded PTYWOOD and VENEERS to our imports. We solicit your inquiries for: cent over the 1935-39 levels-but several times that. But the announcement said it was only lg6 per cent. you call it the high cost of living, or high prices, or inflation; it makes no difference. It is caused by surplus quantities of money and bank credit available and the velocity of the circulation of these funis.

The Los Angeles Times editor explains infation very clearln when he writes: "Governments long ago caused inflation by debasing the currency. Then they found an easier way-turning out paper money on printing presses. Our own currency during the Revolutionary !Var, the French assignats of 1789', the Confederate currency of Civil War times, and the billions and trillions of German marks after World War One are typical examples. Today something like that is happening on a smaller scale. Our government decides to spend more and more billions. So it sells its bonds or other IOU's to the banks. The banks show deposits against which the government c:rn draw. The banks then sell the government IOU,s to the Federal Reserve Banlq which pays them by creating a credit on its books or by having more Federal Reserve notes printed. More money is poured into circulation.

"Most of the money supply is not in currency like dollar bills, but in bank deposits created by those dollar bills. Checks are drawn against those deposits and these checks daily are the same as hundreds of millions of dollar bills in circulation. Hence the money supply is measured by deposits plus currency outside of banks. fn December; 1939, this total was 64 billions of dollars. Right now it is almost three times that figure." *

The subject of money is confusing, A g. S. Congressman was recently quoted in the Congressional Record as saying that unless you are thoroughly confused it is plain that you do not understand the situation.

Must Have !t

"Couldn't

get along without it."

Harvey W. Knoll, Los Angeles, Calif.

C. I. Hexberg Now With Hexberg Lumber Compcny

C. J. Hexberg of San Francisco, formerly of Anglo California Lumber Co., Los Angeles, is now associated with his son, Jesse Hexberg in the Hexberg Lumber Company, Los Angeles.

Mr. Hexberg is truly a veteran lumberman u'ith 55 years' experience in sawmills and wholesale distribution yards. He started with the Red River Lumber Co. back in Minnesota, and later moved to Westwood, Calif. After some years there he went with McCloud River Lumber Co. at McCloud, Calif. He was for many years superintendent of the Anglo California Lumber Company's vard in Los Angeles.