The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1920-11-26
WHY PLANTS ARE CLOSING.

Hardly a day passes that does not
bring announcement in the dispatches
of the closing down of industrial
plants with the accompanying explas
nation that suspension is due to a
lack of orders. But there is no rea-
son to fear a prolonged Industrial de-
preston. During the past five years
there has been interpretation of
many kinds of commodities needed in
little house-building, too little build
ing of railroad equipment, too little
railway maintenance, too little con-
struction of permanent highways.
There is every reason TO expect Pc
riod of industrial activity, but it must
be upon a basis more nearly normal
than existed at the close OF the war.
There is no reason to fear prolonged
period of depression.
Much of the present depression in
industry and in prices is the natural
result of government interference in
business and arbitrary exercises of
power by labor leaders. Some wage
earners who, thru organization, had
the power TO dictate, forced up wages
until the cost of production was be-
yond reason. Consumers Struck"
and, by refusing to buy, curtailed de-
mand for the goods, with the result
that the workers in that line of en-
ployment are now looking for works
Some retailers charged prices that
brought them unconscionable profits,
and they were caught with stocks of
goods on their hands when the con-
sumers quit buying. Consumers of
many lines of goods are still on a
strike and will stay on a strike until
prices have reached a proper level.
The fall in wholesale prices gener-
ally has been considerable but the
good effects of this have not yet
reached the consumer. It is being
charged that the retailer is standing
in the way of active trade by holding
up his goods at price which to the
consumer, knowing of wholesale re-
duetions, seems unreasonable. A Pc
riod of dullness and hesitancy invari-
ably comes after a sharp fall in prices.
This period comes to an end when the
lower prices attract the general con-
sumner. but no increase in buying can
take place until goods are offered
down.
The retail buyer complains that
while show of cutting prices is made
by the retail merchant, it is found.
upon investigation, that it is only the
things that nobody wants or the shop
worn or shoddy articles that have
been reduced to any extent. When
the buyer comes to price things of use
and value, he declares, he finds these
hardly reduced at all, and is, conse-
quently, indignant.
Wholesale prices have fallen 20 per
cent or more in the last six months.
1t is reasonable to assume that when
the benefit of these reductions reaches
the general consumer. then a period
of buying will start in, and for a time,
at least that the price reduction will
cease. To reach actual pre-war levels
may take long time. The Mechanics
& Metals National bank points to the
fact that it took prices twelve years to
fall less than so per cent towards pre-
war levels after the Napoleonic wars.
Two years after the Civil war also,
when prices had fallen 12 per cent
from 1865 to 1856, recovery followed
the break and prices did not reach
SO per cent decline from 1865 levels
until more than ten years later.