Valuation, depreciation and the rate base

Bibliographic data

Monograph

Identifikator:: 174667931X

URN:: urn:nbn:de:zbw-retromon-119897

Document type:: Monograph

Author:: Grunsky, Carl Ewald http://d-nb.info/gnd/10180959X

Title:: Valuation, depreciation and the rate base

Edition:: 2. ed., revised and extended

Place of publication:: New York

Publisher:: Wiley

Year of publication:: 1927

Scope:: X, 500 Seiten

Digitisation:: 2021

Collection:: Economics Books

Usage license:: Get license information via the feedback formular.

Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Chapter XIV. The standard of value

Collection:: Economics Books

THE STANDARD OF VALUE called in and cannot be paid. Government and other em- ployees are discharged. Public improvements are stopped. Taxes are reduced. The volume of business shrinks. Capital becomes timid. The value of the dollar goes up. Everybody by spending less and curtailing requirements below normal con- tributes his share to make matters worse. But hard times as a remedy for high prices, implying the reduction of the great mass of people to a condition in which means are lacking with which to buy the cheapening necessaries, are worse than the feverish condition of business activity at the other extreme when every one complains of high prices. Because of these possible extremes an adequate wage which is to persist for an indefinite time can not be satisfactorily defined in terms of money. Compensation must be fair alike to the employee and the employer. The latter will always make it his endeavor to secure services that are satisfactory at the lowest possible rate. The former will contend for a living wage and in the long run will accept nothing less. Agreements momentarily satisfactory to both parties may be reached; but there is no certainty, so long as money is named as the consideration, that during the period which the agreement is to cover — generally an indefinite future — the compensation will always buy as much shelter and clothing, and food, fuel, education, transportation and recreation as it would at the time when it was agreed to be fair and adequate. This element of uncertainty, this specula- tion in futurities, can be successfully eliminated, as has already been stated, by reference in all such agreements to the * com instead of the “ dollar.” Turning now to the question as to whether it would be practical to introduce the com to serve alongside of the money unit, the following possibilities, subject to more or less modification during the transition period, may serve as illustrations. Take first an industrial establishment such as a factory with an output which is placed on the market at the fair average cost of production plus a profit. The labor item, rents and perhaps, too, the cost of borrowed capital, would in this case be computed 270

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