Imperial Valley press., 1920-07-15
COT 7 ON
ECONO MICS
By ". W. MORRISON

NEW ORLEANS. La. July 15.-
Two influences practically shape the
tone and trend of the prlce of every
staple commodity. One is psychologist
and the other economic. While both
are positive rather than negative, con-
ditions sometimes give such an urusu-
al emphasis to the influence of one
that it temporarily neutralizes the in
tluence Of the other. The ability to
discern the character and extent OF
Of these conditions measures, with
Tair degrees of accuracy, the equipment
required to carry any business under
taking, especially great undertak NJ,
through to a successful consummation.
In that field Of activity whi.h be-
longs peculiarly to the passions and
the sentiments psychological influanc-
es are often far reaching in their eff
feet. History is replete with instances
tluences have made and Unmade the
careers Of individuals and even fixed
the political and social status Of
people for generations. This is not
the case however, in tie realm cf
+ ,concmics as it relates particularly to
the basic necessities Of life; for the
records covering many decades DO not
show that psychological influences ever
run counter, for any extended period,
10 the logic of economic conditions.
The cause Of this is apparent. Now,
It is quite possible for these psychic
influences to depress the price of
staple raw products we'll below the
cost Of production. As a matter CT
fact this has often happened A de-
cline in the output has always quickly
followed, howevtr. then, just as quick
ly as needs Of the world became in
/. cIeasingly urgent in the same ratio
until they, at length, Cvcrcame the de-
prCasio and restored prices to level
which brought production back in line
18th the worlds normal requirements
Since immcmorial times this has been
the uniform ending Of all such periods
cf reaction. Indeed, il stands out that
civilization could not have survived
had it not been for this incXCiab.e ra-
ture Of economic laws.
The history Cf business, the history
Of American business particularly
shows that all great and enduring
achievements have been founded upon
a constructive outlook. 1t shows also,
the really urgent importance Of rec
OgnlZlng the evils that lurk IN pSy-
Geological influences and Of guarding
against the excesses which such in
fluences are apt to develop, whether
they are in the direction Of undue en-
thusiasm or undue pessimism. In
other words, while psychological in
fluences are apt to be more or less
short lived, they are, whatever may be
their trend, just as apt to undermine
that conservative attitude without
which every business is in danger Of
deGenerating into a mere adventure
The relation Of these records, and
the economic principles involved, to
present dav business conditions is
clear: The prices Of many prime neces-
gities are excessive. The trend OF
events point to on extended recession
as coming sooner or later. If the pub
lie should ignore the fact that prac-
tically all of the excessive initiation is
in the price Of the manufactured prod
uct. not the raw material, and the
recession, as consequence, should in
volve the price of staple raw products,
il would only be conforming to what
has been the history Of such move
laents for very. many years.
It is obvious, therefore, that every
-business man. especially in times like