572 THE POPULAR SCIENCE MONTHLY 



off than in 1897 : he receives now $2.80 a day instead of $2.00, and he 

 has a surplus of $240 a year above food and rent instead of $200 as in 

 1897. Likewise a clerk or mechanic who in 1897 received $900 and 

 spent $600 for food and rent, receives now $1,260 and spends $900 for 

 these necessaries. He receives now $4.20 instead of $3.00 a day and 

 has a surplus of $360 instead of $300. In spite of the higher prices 

 this additional money makes him feel better off than before; conse- 

 quently he has enlarged his ways of living according to his feelings, 

 not according to his real income. 



Merely to offset the price changes the workingman of our illustra- 

 tion, to be as well off as in 1897, should receive $3.00 a day instead of 

 $2.80 which he actually gets, and he should have a surplus of $300 

 over necessaries instead of his actual $240. Likewise our clerk and 

 mechanic should get $4.50 a day instead of his $4.20, and should have 

 a surplus of $450 instead of his actual $360. In fact, both laborer 

 and clerk have been losers and they have erroneously felt themselves 

 gainers in income. 



The same paradox appears with classes whose incomes have ad- 

 vanced proportionately with prices or have advanced faster. Every- 

 body has the feeling of having more income than he actually has. The 

 middle-class man who formerly saved $1,000 a year should now accord- 

 ing to the same standards save $1,500 to offset the 50 per cent, increase 

 in prices. Everybody to save as before should set aside annually 50 per 

 cent, more dollars. Among social classes throughout, how large a pro- 

 portion of people are doing this ? If not, people are not saving as they 

 think they are. The man who formerly carried $10,000 life insurance 

 for the protection of his family, should now carry $15,000, merely to 

 have his family protected as before. Any one who has not followed 

 this ratio of increase is not protecting his family as he supposes. 

 Further, merely not to be poorer a person with a capital of $100,000 

 should now have $150,000. Any one whose capital investment has 

 augmented less than this ratio has obviously lost in real financial 

 standing. 



All along the line the diminishing dollar has played tricks on our 

 sense of values, making us feel more prosperous than we are. As a 

 consequence too many of the working classes have regularly indulged 

 in Coney Island or in its miniature counterpart, in picture shows, swell 

 clothes, etc. Too many of the middle classes have attempted auto- 

 mobiles, expensive summer vacations and trips abroad. Of the ex- 

 travagance of the rich, there is no need to speak ; it has been so glaring 

 and senseless. Luxurious living is excellent if you can afford it. But 

 insidiously we have been led into extravagances that we can not afford. 

 Too many of us have been living on capital, erroneously thinking it 

 income. 



