Higher, Ever Higher

In Philadelphia, the price of beef has exploded--up 114 percent in only three months, from -L-3 10 shillings to -L-7 10 shillings in Pennsylvania currency per barrel. New Yorkers are buying refined sugar at exactly double the cost of three months ago (1 shilling 3 pence, v. 2 shillings 6 pence per pound). And tavern keepers throughout the Colonies are bitterly protesting the intoxicated prices of West Indian rum, now running as much as 110 percent higher than last whiter. Even the humble pin is no longer humble in cost. A woman in Braintree, Massachusetts, complains: "The cry for pins is so great that what I used to buy for 7 shillings and 6 pence are now 20 shillings--and not to be had for that." If current trends continue, prices will jump 200 percent within the next year.

Much of the blame for rising prices can be placed on the tightening British blockade, which has sent the cost of imports, including most manufactured goods, soaring. Even common and once cheap imports like salt, essential for the preservation of food, have grown greatly in value. When it can be obtained, salt costs 8 shillings 6 pence, v. 3 shillings 9 pence three months ago.

Much of the blame, however, can also be placed on the cost of the war itself, which is vastly more than anyone would have predicted even a few months ago. Not only have purchases for the Army made many scarce goods scarcer, but Congress has been forced to print much more paper money than it had anticipated. According to current estimates, another 5 million Continental dollars will have to be emitted later this month in addition to the 15 million so far.* This "emission" is done simply by printing more paper money, but since Congress has no right to levy taxes, the money it prints is backed by nothing more than a promise to pay off in specie eventually. Many people are skeptical of that promise and rely on a wide variety of European coins for their everyday needs. They accept the proliferating dollars only at a discount.

The war has already created a business boom, and not everyone is hurt by the price increases. Some farmers, for instance, have discovered that if they can hold part of then-produce off the market at harvest time, they will soon get higher returns. Merchants who can procure scarce products are making bigger profits than ever before. One Massachusetts merchant who owns several privateers reports that profits of 100 percent on sugar and 150 percent on linen and paper are "more than common." Jonas Philipps of Philadelphia says that European goods command a profit of 400 percent there.

Even those who profit from rising prices, however, soon see those profits disappear when they themselves must pay more for their goods. And creditors of all kinds, everyone from merchants to landholders with fixed rents, are finding to their sorrow that the bills due them are worth less than they had anticipated. So, on balance, most Americans are more hurt than helped by rising prices.

One solution that is being widely considered: price controls. Local companies have long controlled prices of some goods and services, such as bread and charges for ferries. Some now say controls should be extended throughout the Colonies.

The one attempt at such widespread controls, however, gives little ground for encouragement. The Committee of Public Safety of the Congress did place controls on a list of goods, mostly of West Indian origin, at the beginning of hostilities. The attempt proved unpopular and hence unenforceable, and only tea and salt still remain on the list.

*Congress began issuing the bills last June. Since the Government has promised to redeem them in Spanish silver dollars--the most popular coin circulating--they have been given the Spanish name: dollar.

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