El Paso herald. (El Paso, Tex.) 1901-1931, 1919-03-18
PRICES AND LABOR ARE STAYING UP.
SMALL PROSPECT FORANY REDUCTION

nFICFS will rse and fan and there VIII BE- in time gen
eral declining tendency but those who ook for quick
slump to before the prices destined to be dsap-
pointed This is the view Of leading economists and heads
Of big business enterprises who have exceptional oPporun
ties to secure information and it looks reasonable.
At the recent conference of governors and mayors in
Washington secretary of Baker secretary Of COM
meroe Redield director Of railways Walker Hines and
others concued in opinion that not only the United
States but the whole world has entered upon period Of
new price levels and that is not be expected that
either the wages Of labor the prices Of commodities VIII
return to pTewar levels.
They based this opinion upon the statement that the
general level Of prices dependent upon the volume and
rauidtv Of turnover Of the circulating medium in relation
10 business transacted thereby In other words
the amount Of labor products available remaining constant
If the circulating medium is increased, general price levels
are higher.
Banking credits have been EXPANDED tremendously due
conditions and the world has been taught to
checks and other paper instead Of gold and silver So the
circulating medium has been inflated to such an extent
that there is present outlook for contraction In fact
tendency toward the reverse greater money
initiation with couespondingly less value per unit
normally high for these lines the outlook confront
ing business is that the general level Of prices viii
not fall greatlyzt least, not soon The opinion e
pressed the governors conference that those interests
which marking time while waiting for big drop in
the price of materials for instance losing OppOr
tunities for trade and beneng themselves not particle
It also the prediction that general reduction Of
wages is to be anticipated. Wages primarily dependent
upon living COSTS and the governors conference showed
the country when adopted resolution that there should
be reduction Of wages until living costs down If
this principle is be applied and undoubtedly every effort
VIII be made to carTy II into effect, the prevailing higher
prcs levels well increased costs Of production due to
the continuance Of the payment Of high wages VIII prevent
general decrease Each holds the other up High prices
nsOessitae high wages and high wages contribute high
prices.
Another factor in keeping prices up is the very high
freight rate There general increase Of Is percent
after the government the operation Of railway
and allied steamship lines, but in specific commodi
ties certain building materials for instance increase
nearly fourod There present indication of any
general reduction freight rates and these have be
figured into selling prices Of commodities Freight rates
cannot come down to prewar levels first because they
not high enough under the old conditions and rail-
roads were suffering result and second, because the
government increased the pay Of railway operatives BY
hundreds Of millions year and only higher freight rates
than those formerly effect could provide for the in
creased payments. The Taioaders viii not stand for cut
in pay while the cost Of living stays up and the higher
freight rates which bring IN the money pay their wages
also contribute to keeping up the Of living Thus the
balance is maintained
But while there is prospect Of general cut in freight
rates, there may be- reductions IN few instances Il was
mentioned above that rates building materials had
been increased fourfod This applies to materials for road
making and general building construction Rates on these
commodities were inordnatey boosted BY the railroad ad
fnaon Tor the minor purpose Of providing more reve
nue. but chiefly to curta construction work while the war
vas on Because Of the present need Of more buildings and