Evening star., 1919-05-04
BUSINESS ON THE WAY
TO A NEW PROSPERITY
Bottom of Stagnation Apparently Has Been
Reached and Now Tide Has
Turned Upward

of approximate stability. and that
upon this level. still high. but staoll-
lied, the business revival is based
The level today is figured at about
100 per cent above the average prices
for 1913. a reduction of only I per
cent under the high point of last
September This level still is so high
that il is difficult to believe 1t can
have anything approaching perma-
nency. but if further descent is to be
gradual and not abrupt, it might rea-
sonably serve as a basis for the re-
sumption of industrial activity.
Guides to Judgment Lacking.
A price has been defined as "the ex-
preston of the business judgment of
an entire community on the value of
a commodity now and in the future
but the difficulty of the present sit
uation is that price conditions are 50
unprecedented that the community
has no guide posts to point the way
to formation of a trustworthy busi-
ness Judgment AS the war itself was
unprecedented, so it resulted in an
unprecedented depletion of the
worlds stocks of goods and materials
of almost every kind and at the
same time destroyed or greatly re-
duced the productivity of a very con-
siderable part of the worlds popula-
ton. There is a deficit to be made
up such as never existed before, with
relatively less materials. less ma
chinery and fewer workers with
which to accomplish it. This throws
SO heavy burden on production
which escaped destruction and de-
teriorat ton by war and anarchy that
it is inevitable that high prices will
prevail for an Understandable number
of years.
But no man is wise enough to say
at what point prices should be stable
nor for how long a period thew
should be maintained at any given
level. The most that can be hoped
for is that the community may reach
the judgment that there will be no
sudden and disastrous drop from the
prevailing level, and, therefore, that in
dustry may go ahead without undue
hazard. That would seem to be the
state at which the business mind of
America now is arriving, and there is in
II the promise that the natural working
out OF economic laws will accomplish
what governmental attempt at arbitrary
price adjustment failed to bring about.
influence Of World Prices.
AS the condition of goods scarcity is
world wide, SO world prices are bound
10 influence prices in this country No
satisfactory recent reports are available
from any foreign country except Great
Britain The index figures of the Lon
don Economist show that from Septem-
ber. 1918, to March l, 1919, the price
level on all commodities fell rs per cent.
AS Great Britain had an extreme ad-
vance Of 1913 per cent over 1919, as
against an extreme advance of only 1O7
per cent in this country, recession from
the British high point is practically the
same as in the United States.
1t is dangerous to go back to the days
Immediately following the American
civil war for guidance in judging the
present situation. because the conditions
then existing and the causes underlying
them were so dissimilar from those
which confront the nation today. The
civil war inaugurated an era of high
prices. but it was not due, except in the
case of cotton. to any world-shortage Of
goods. An inflated and deprecated cur
rency was mainly responsible for high
prices during and Immediately following
the civil war.
But there are some features of civil
war prices which may be studied with
profit today. One OF them is that, though
the high prices were not due to a world
shortage of goods, 1t required more than
dozen years for them to get back to
their pre-war level. This, despite a vio-
lent decline in the early months of 1865,
when 1t was seen that the Confederacy
was On the verge Of collapse When it
is recalled that there was in the civil
war no such wastase OF materials, even
relatively. as in the war just ended. and
that as the southern states were not in
dustrial. there was practically no lower