Evening star. [volume] (Washington, D.C.) 1854-1972, 1919-02-09

the anu liaf itsN'-
| ufacturers, while undoubtedly fright
| ened held dogmatically to their be-
lief that prices should not come down
Then things began to happen. Uncle
Sam announced auctions OF his wool.
but got prices that were considered
| far too high by both manufacturers
and merchants. Isolated articles Ike
| b,eached muslin were actually quoted
at reductions of several cents a yard
! or pound.
Competition From Abroad.
Competition doomed up in fabrics
from England and Japan, made OF
materials quoted decidedly lower IN
| world markets and brought in under
our new tariff, which has really never
been tested. Finally both buyer ana
seller began to get together, ana the
guaranteed price was adopted as a
| basis of adjustment. The knit goods
manufacturers took the lead in Janu-
airy with a big meeting in New OF
| at which it was agreed that ADJUST
ments during the next six months
| should be made on the basis of the
| lowest prices at which goous are SOU
during that period
Still another interesting field. viewed
from this price standpoint, is the steer
Industry. Our steel-making capacity
has almost doubled during the war
| Prices nave TeacNSu fGNSiS WiHIt mani
construction work of all kinds very
costly. Roughly speaking, certain KINDS
of structural steel at l cent. pound
encouraged wide building operations
before the war. but the mills did not
| find that price yielding a satisfactory
profit. When such steel sold at IA
cents pound the steel men were pros,
porous and happy and building stu
lively. With such steel selling at
cents a pound and more, building Tags
1t is hard to secure capital for con-
struction, and a vast army OF builders
and wage earpers marks time. 1t Is OF
little use to point out that the railroads
need in rails alone perhaps one pound
Of steel out of every five that tho mills
could make this year running at fun
communities everywhere are under
built Until price uncertainties have
been squarely met and insurance pro-
yidatl against falling quotations the
building business Will not march aneao;
The steel men are endeavoring amid
all their other difficulties to introduce
new methods of buying and selling in
their industry. Traffic in steel has al
ways suffered from speculation. The
buyer who needed 5000 tons of struc-
tural steel. for instance, delivered six
months hence. might contract for o,ooo
or 90. 600 tons, with a view to reselling If
prices advanced. When his speculation
turned out well he took the steel. But
tif prices fell there was always some
IoophoIe through which he could es-
icape Steel manufacturers propose to
govern such transactions by new
contract which imposes penalties for
| failure to accept and pay for deliveries
when prices drop, and this individual
situation in one basic industry illus
trates how complex are problems con-
nected with prices generally and how
much hard thinking and adjustment
there must be before the world again
gets back to normal
In food, clothing, shoes, hardware.
1 chemicals, machinery, lumber, rail-
road equipment, coal. ships and every
tother line there are similar prob
lens of price adjustment, with pro-
duction and employment waiting upon
business decisions and buyer and
seller facing hard facts No matter
how anxious both may be to go ahead,
these fundamental questions must be
| tackled and soIyed-or at least adj
justed until they solve themselves
Through world wide resumption of pro-
tduction and commerce.
Really, we are gsing through the
woods again.
Gloomy in the Woods.
When the war broke out in 1914
fpeace production stopped. Business
entered the woods. 1t was a very
gloomy place. Business thought the
world had come to an end. 1t laid
of workers, cancelled orders and
tehandise. Cotton was piled in the
streets down south and peddled
iaround by the bale to banks. hotels
and theaters. Had any one with con-
Ifidence and capital bought the short
fiber cotton known 1inters then
for few dollars bale, within eight
| months he would have made his for
tune. because 1inters were found fine
! materials for explosives and sold as
high az cotton itself in normal times
when the war demand from Europe
developed early in 1915. Every manu-
/ facturer who laid off workers found
! it difficult to get them back when
! the war demand materialized Every
4 merchant who cancelled orders for
/ goods wished that he had them within
six months, for they were worth so
much more money then that the ad-
vance represented big profits.
Somebody has said that it never
pays to bet against the United States
I--you always lose.
/ The last notable instance of this
| was the kaiseri
| Yet every time the nation enters
| these woods there are plenty of Amer
1 lean business men disposed to bet
against the progress of the country.
/ The woods are SO gloomy that they
think they will never get out. They
old woods that they have been
| through again and again during their
! business experience.
! In 1914, while passing through the
I woods between peace production and
4 war production, there were thousands
of manufacturers, merchants and
bankers who laid off workers, can
celed orders and restricted loans
They bet against the country and
lost. and war prosperity. with its ire
| mendous demand, found them short
of merchandise, materials. machinery
and labor-and they never caught UP.
Bound to Lose Bets Again.
The woods of 1919 arc the same
gloomy tangle. We are simply going
! through in the other direction. from
a war demand to a peace demand so
great that it cannot yet be foreshad-
! owed. Peace demand is a more GER
| tain quantity than a war demand,
because it is normal and familiar and
permanent, whereas war demand was
| strange and abnormal and temporary.
But business had adjusted itself to
war demand, and now that the latter
has stopped. these same business men
, who bet against the United States in
| 1914 are again holding OF from pur-
chases and production. History al
ways repeats itself. When arti-
| fetal trade barriers all over the world
go out with a roar, business will oEce
more find itself short of merchandise,
material, machinery and labor
| In the fall OF 1914 New York
| trade Journal editor stopped OF TO
see his uncle. who owns a prosperous
department store in a busy Illinois
city. His uncle was going through
the woods and very gloomy. Local
| factories had shut down, farmers
were getting unsatisfactory prices
| for their crops. He was buying goods
on the hand-to-mouth plan. and had
cancelled spring orders. Prices were