The New York herald. [volume] (New York, N.Y.) 1920-1924, 1920-10-18
j. s. Bache Asserts Deflation
Is i'm Full Effect and Bound
to Continue.
WHEAT CAN'T KEEP HIGH
A. Barton Hepburn Declares
Move Is Healthy, but Old
Level Unlikely.

States said yesterday that although the
consumer generally has felt very little
relief from the big cuts that have been
made in prices during recent weeks, the
wave of reduction is a healthy sign and
must, in time. have a decided effect on
the cost Of living.
The fact that the weekly household
expenses Of the consumer have not been
lessened Is attributed to the
desire OF the retailer to protect himself
and to sell his present stocks. bought for
the most part at higher prices than now
prevail. at figures which will not show
him material loss. When these stocks
have been disposed of, then the retailer
will be able to purchase at lower prices,
and consequently the decline will. or at
least should be passed along to the con-
sumner.
Bankers characterized as absurd the
talk which is being heard in the South
and the West to the effect that produc-
ers Of cotton and wheat. particularly
wheat, are planning to hold their prod
ucts for higher prices. They declare
that wheat, which has not declined in
to other food products. must
go lower, even though the downward
movement does not take place immedi-
ately.
VIII Make Living Easier.
J. S. Bache. head Of the banking firm
OF ]. S. Bache & Co., declared yesterday
that In his opinion the cost Of living Is
bound to be affected sooner or later by
the declines in prices which have char
acterized the commodities markets for
the last few weeks.
while the decline in all commodities,
which commenced some months ago." he
said. "and In some instances has reached
point which for the time being at
least, is exaggerated. 1t will ultimately
have Its effect on the cost Of living
Every effort will be made by the re-
taller to sell his present stock, bought
at higher prices, without loss; but the
world Is under notice that defiation is
In null effect and is bound to continue
Wheat Is almost the one exception,
in that It's decline has been nowhere in
proportion to other food products or
basic commodities, and II cannot re-
main that exception long. even though
II be true that this Is the one product
that Europe must have. Any effort by
the farmer TO hold will only ultimately
accentuate the decline. since 1t is an at
tempt to repeal the law of supply and
demand.
Knowing nothing of the technical
speculative in the wheat market condi-
lions ! could not venture a prediction
as to any immediate movement in II,
but am convinced that 1t will gradually
get nearer pre-war prices. whether the
crops be large or small.
THE tendency OF all buyers Is TO hold
of in a declining market usually miss
Ing their opportunity. and thus we have
the almost total cessation of buying by
department stores, jobbers and retailers
xxyit 70 tn tha nd 1,.,f L., he
meanwhile 1t can have but one result.
and that is the gradual decline Of such
basic commodities and manufactured
articles as may be compelled to find a
market"
Decline Must Continue.
a. Barton Hepburn, chairman OF the
advisory committee Of the Chase Ma
tional Bank. also expressed the opinion
that the decline in prices has not run
It's full course, although he does not ex-
pect to see pre-war levels reached in the
downward swing. He characterized the
price cutting movement as a healthy
reaction from the most unhealthy infia-
ton" and declared that until safe and
sane level has been reached business
will not be warranted in branching out.
II regard the price cutting wave that
Is beginning to sweep over the country"
Mr.. Hepburn said. las healthy reac-
ton from the most unhealthy imitation
of business which the world war brought
about. Everyone was profiteering.
There was no competition in selling
goods. That is to say. there was no
attempt on the part of vendors to make
their goods attractive TO buyers by fix
ing a reasonable price upon the same.
They simply charged all they thought
10. rot nd tl,o
price willingly without protest. each one
in turn seeking to square himself by adj
vancing the price of whatever he had TO
SELL be the same labor. raw materials
or manufactured products
Business experience already saw that
this condition could not last. Even the
man without experience was able to re-
alize that production. distribution and
prices were all abnormal. A decided re-
cession was not only in order but newt
able to place business upon sound
and healthy basis.
cit is probable that prices will not
reach pre-war level because of the
economic and psychological changes
brought about by this world upheaval.
Lower prices will result naturally In M
creased buying. increased consumption
and therefore increased production. Not
until safe and sane level has been
reached. however. will business feel
warranted In branching out. Business
men must not only feel confident OF the
present. but of the future. bTore they
will embark on business expansion and
large enterprises whose fruition must
be determined by the future"
THE decline In prices" Mr.. Hepburn
added. has been startling evidence OF
the heights TO which they had climbed
and OF the extent which they must de-
cline before we are again on normal
basis. All things are relative; II we
raise the price OF labor and at the same
time raise the prices of the things which
the working man must buy. we have not
improved his condition, and II we re-
duce the price OF labor and at the same
time cut the cost of necessities OF life,
we arc not doing him an injustice"