THE NOME NUGGET
Published Monday, Wednesday and Friday by The
NOME PUBLISHING CO.
Nome, Alaska
Telephone: Main 125 P. O. Box 61H
$1.50 PER MONTH $16.00 A YEAR
W. A. and EMILY BOUCHER.Editors
Entered as second class matter October 14, 1943, at the postoffir*
at Nome. Alaska, under the Act of March 3, 1879.
Wednesday, June 4, 1947
\
Alaskan Newsprint
(Editor and Publisher)
ALMOST EVERY NEWSPRINT expert will state the
current shortage period will be with us for “several
years.” All such statements are based on the assump
tion the shortage period will end in the natural course of
events, or that something is being done to end it.
We do not believe the newsprint shortage will ever
be corrected until considerably more new production
is planned than is now in prospect. We do not believe
present production ever again will be able to supply the
demand for newsprint. We believe all economic signs
point to an expanding newspaper industry.
Newsprint manufacturers who have been brought out
of red ink in the last few years refuse to believe current
indications of expansion in the newspaper industry and
therefore will not earmark capital expenditures for ex
panded production.
E & P found last fall that publishers are planning a
quarter of a billion dollar outlay for new plants and
equipment in the next five years. Circulation records
were broken in 1946. Advertising linage almost reached
the peak in 1929. Both advertising and circulation fig
ures for 1947 promise to be even greater. And in an ef
fort to determine what lies ahead in actual newsprint
demand, E & P queried several publishers. Some re
plies: I
“We consumed 50 per cent more newsprint in 1946
than we did in 1945. We estimate in 1947 we will con
sume 10 per cent more than in 1946 and that in1948 we
will consume 10 per cent more than in 1947. In each of
the three following years we estimate that we will con-1
sume approximately five per cent more than in each
preceding year.”
“We would like to have 15 or 20 per cent more news-!
print in 1947 over 1946. We would like to open up the
paper and if advertising increases it is possible we
would like another 20 per cent in 1948.”
“Right now we can easily use 30 per cent more news
print than we have. I am willing to say that conditions'
might level off to somewhat over a five-year period of
10 per cent less than what they are now, which would
mean an increase of 20 per cent more-newsprint than
we have now, over five years.”
That’s the way the newsprint demand picture looks.
After the recent thorough airing of the supply and
demand situation before a Senate Committee recently
what has been accomplished? It was proven that many
small publishers are having difficulty getting paper so
an attempt is being made to set up a newsprint pooling
arrangement to solve the short term problem. Secretary
of the Interior Krug admits Alaska has a vast newsprint
potential. Others acknowledge new production must be
had.
In other words, barring a catastrophic depression the
demand for newsprint will increase year by year and
unless steps are taken to develop new production the
shortage is going to get worse every year we procras
tinate.
Alaska is a logical source. If private capital cannot be
interested there, government agencies must be urged
to develop those resources. Steps must be taken imme
diately.
Food Prices
(New York Sun)
THE SENATE-HOUSE Committee on the Economic
Report, under the chairmanship of Senator Taft, has
#
announced plans to make its own study of the question
of high prices and the rising cost of living. One encour
aging feature of the proposed inquiry is that it places
chief emphasis where it properly belongs, namely on
farm and food prices. Since 1939 farm prices have risen
about 180 per cent and food prices have risen 140 per
cent, whereas prices other than farm and food have
risen only 60 per cent and iron and steel prices have
risen about 30 per cent.
The unbalance which prevails in the price structure
today is due primarily to this very sharp rise in food
prices and farm prices. This point is reinforced by an
examination of the changes in the consumers’ price in
dex since the beginning of 1946. Approximately 70 per
cent of the increase has been attributable to the rise in
food prices. This rise in living costs has been the major
factor underlying the demands for wage increases as
workers have found it increasingly difficult to get along
on their prevailing wages. For other groups, namely,
those with fixed incomes, white-collar workers, Gov
ernment employees, etc., relief can only come through
declining prices.
The study of the Committee on the Economic Report
has two objectives: to ascertain the causes of the pres
ent high prices and the distortions in the price structure
and to determine what can be done about the problem.
The first of these should not be particularly difficult.
There is nothing really mysterious in the runaway rise
in farm prices, given the present situation in which a
heavy foreign drain on American agricultural commod
ities for world relief purposes coincides with an unpre
cedented demand by the American public.
In the second place, the Government was reluctant in
the early months of the war to grapple firmly with price
control, particularly in the field of agriculture. In con
sequence, farm prices had already risen by 70 per cent!
even before general price control was adopted in 1942.;
Other factors making ^or a one-way market in farm
prices are the “parity” formula and the price floors to
which the Government is committed under its program
to prevent the danger of a farm price collapse after the
war and reconversion have passed. Most of these ele
ments are beyond the control of the present Administra
tion, but the latter has not been entirely guiltless. Its
inept handling of relief grain purchases which culmin
ated recently in its actually cornering the market in
wheat added one complication, at least, which the coun
try might have been spared. More basically, of course,
its predisposition toward meeting all economic prob
lems by granting higher wages has played a decidedly
important part in raising prices in all areas. .
Political considerations and the human element, it is
clear therefore, have contributed vastly to laying the
foundation for the price inflation which now plagues us.
And once one has laid a foundation, it is not easy to re
move it without risking the collapse of the structure
which rests upon it.
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PROFITS FALLACY
To the profit motive we must
give chief credit for the high liv
ing standards we in America en
joy. We appreciate profit because
of what it does for us. Everyone
wants something “clear” above
expenses: a profit on turnover, a
premium above the growing-costs
of farm produce, enough remain- 1
ing from wages or salary to put
into insurance or savings. To in
dividuals as well as to businesses
this incentive means “urge to get
ahead.” •
Yet, the profit incentive is
widely misunderstood and malign
ed. Many folks talk about profits
as though they were injurious.
These folks indulge in sideglances
as if profits were a vicious impo
sition upon the people. Profits, to
some who are misled or misin
formed, have assumed a negative
sound. The fallacy is that indus
try arrives at selling prices by pil
ing onto production costs as much
nrofit as the traffic will bear.
This is not the way profits are
calculated.
Price Tags First
Sales prices on the tags are the
prime consideration. In a free
competitive market, the price tag
is not marked according to pre
conceived notions of waht the
profit ought to be. Another fal
lacy. that free enterprise makes
goods for profit rather than for
use, comes to light here. The con
sumer is king in a free market:
the price tag is slave to the de
mands of a price iconscious buying
nublic. This is one game in which
the consumer takes the sweep
stakes. "
You and I manufacture radios.
we meet squarelv in the market,
where mine is priced at $100 and
yours at $75. If the quality is the
same I must either lower my sell
ing price to compete or give to the
customer one-third greater value
than you do. The lower the price
and the more quality included the
better off each of us will be—
saleswise. And the first one of us
to achieve quantity sales, or real
mass production, will be the first
one to give the customer lower
orices and better quality. Compe
tition thus regulates the selling
price, regardless of my costs.
Efficiency Is King
The cycle is just that simple. To
keep factories running, the goal
of our industries is to make a bet
ter product available to a larger
number of peonle through mass
production and lower selling costs.
After deducting costs from the
customer’s price the result may
| or may not be a profit. When the
margin is uncomfortably close, the
next logical step will be toward
more efficient production.
Efficiency of operation means
to industry the ability to keep
down costs of making and selling
a product .The object is a favor
able position on the open market.
This means that factories must be
busy constantly, taking up the un
employed. supplying products at
1 lowe^ cost to an ever increasing
. buying public. Not only idle men,
• but idle money, is called for to
provide the tools to increase out
put.
The* Public Profits
Winner of this game is the buy
ing public. Because of the profit
incentive and free competition,