The Masses (periodical)/Volume 1/Number 1/The Increased Cost of Living

by Gustavus Myers

The Increased Cost of Living

 

An Analysis of Some of the Factors That Cause the Mysterious Jumps in Prices
By GUSTAVUS MEYERS

 

THIS, of all times, is the time when wage-earners should support any economic movement in their behalf which promises to conserve the power of their wages. Of this there is the most imperative need. The purchasing power of money is not only constantly falling, but a gigantic conspiracy is already successfully under way to impose upon the workers a fiat currency which has not even an artificial basis of value, as capitalists reckon value in relation to money.

Of the whole number of workers, few realize that the money that capitalists pay them in wages is a depreciated, swindling currency in more than one sense. A dollar to-day brings less than half in commodities of what it could purchase ten years ago. The enormous, exorbitant advances in the prices of every necessity have so reduced the buying power of a dollar, that it is equal in value to less than what half a dollar was a decade ago. In no case have wages been adequately increased to meet this increase in the cost of living. The strongest labor unions have not been able to get more than a fifteen per cent. increase in wages, and such an increase is exceptional, at that. What is a fifteen per cent. increase compared to an increase in the cost of living which approximates more than fifty per cent. of what it was ten years ago?

The worker, who has by great difficulties amassed a few hundred dollars in a savings bank as as a security for sickness or being out of work, has been robbed of more than one-half the amount of his deposit.

If, let us say, he has $200 to his credit in bank for the last few years, he really has not $200 but less than $100. If he drew the $200 out of bank, he would find out that it would buy considerably less than what $100 did a few years ago. The only value of money is its buying capacity ;a dollar may still nominally be a dollar; but if its purchasing power is cut in half, it actually is only a half dollar.

Thus billions of dollars are being indirectly robbed from the meager wages of the workers to pay dividends on enormous issues of watered stocks put out by every trust and other capitalist concern. But this is not all. Under a recent act passed by Congress at the bidding of the great financial interests, the national banks are allowed to turn out currency against these very watered stocks. Hotherto, the United States Government allowed currency—that is, bank bills—to be issued against deposits of United States bonds only. But the Aldrich-Vreeland bill, passed recently, contained this "little joker," "or any other securities."

The result has been that immense quantities of watered stocks have been deposited with the United States Treasury, and many millions of currency have been issued against them. It is announced that $500,000,000 more will be issued against these watered stocks. All of this currency is wild-cat currency, having nothing but a fiat value, which means no basis value, even as capitalist standards go. This is the spurious stuff that is now being paid out to the workers, while the banknotes or Treasury notes representing gold, silver, or United States bonds are being carefully gathered in by the great financial interests.

A smash-up is sure to come. The dice are loaded against the working class, and pending the time when the whole capitalist regime will be overthrown, the workers should realize that they must give their support to co-operative movements. Only by this means, with the present odds so fearfully against them, can they hope to conserve something of the buying power of their scant wages, now being largely paid in wild-cat currency. if, instead of depositing their money in banks where it is cut in half and used against them, the workers should become partners in co-operative concerns, they would have the benefit of their wages, which they do not have now.

 

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