Arizona republican., 1920-12-10
Financial Review
Results of pefIation
By ERIC KoBBE Of BIyth, Witter & Co.

The sudden and violent fall in prices | may be attended by distinctly unfavor- 1 able consequences, and it would seem of interest to point out three or four of them. First of all is the discour- aging effect on increased production m all lines-a subject which has been preached to us ever since the close of the war as the only relief from high prices. But now that the sudden and sharp break in prices has come, it has deranged industrial plans to such an extent that it provides a strong motive for smaller mill output and reduced acreage.
 The restriction of production has ne- cessitated the dismissal of large work ing forces, which means at least partial unemployment, which might lead to labor troubles. Political disturbances may also be caused by the strenuous efforts being put forth by the agricul- tural interests to obtain federal aid through legislative action in order to withhold their goods from the market. There is nothing new in this. In 1865 a reduction of inflated and depreciated 1 currency, inherited from the war, be-
 came necessary, but a financial pauic in England demoraliZed every market even America, with the result that goods and securities fell with a rush, and prevented any control or restric- tion of the fall.
 The financial policy of the country
 was immediately changed. The
 green back party was born, which demanded that not only should con- traction be stopped, but that imitation should be resumed. A weak congress
 gave in to their demand with the result that American politics were dominated
 by this party for nearly two decades,
 resumption of specie payment was
 postponed and it was not resumed until
 F years after 1865. The party did not
 go out of power until the unsound
 economic policies on which It was
 founded were clearly seen, and the in-
 evitable day of retribution had ar , rived. Finally the resultant reduction
 of business profits due to falling prices
 strikes heavy blow at the govern
 ment's revenue under existing tax laws
 Some remedy for this situation mus
 be found by the incoming administra-
 ton in revising the tax laws-one o
 tlle great problems we are facing today
 These troublesome considerations , are bound to accompany the era of de flation, but it seems to The Review
 that they are more than counter balanced by the economically favorable
 conditions. The reduction of price' from their abnormally high war-tim' level was absolutely essential to tn ! establishment of a sound position o t both finance and industry to say noth : ing of the rights of the consumer wh had been carrying the heavy burdel
 of the war through submitting to double cost of living at time whel 2 taxes were also almost double, and n was being called upon for ostensibF voluntary but in reality compulsor, contributions of all sorts, which he me / always. We can record with pride, wit . the utmost liberality, and oftimes onl 4 a+ great sacrifice. Who, may " z ask, has a prior right to any oeneIlt I The labor situation Is delicate sub k feet and although The Review may b z going out of it's province somewhq k to speak of the same. the consequence z of falling prices in this regard are to X important to ignore. It appears to 4 that the trust idea which labor ha z fought so hard and so justly agains E has now raised it's insidious head 4 the ranks of labor itself. Is there an E difference between so-called capital
 and '1abor?" Is there not a divisio
 line being put in where none reaH 4 should or actually does exist eXceI
 in the minds of those who so desire il l5 Do not the same principles of condu' A that labor (we use the word adVisedly 12 wishes to apply to capital apply 10 II
 self as well? They do. and althoug
 The Review is not championing tf \ cause of capital. it maintains that labC
 must extend to capital the same cor F sioeration that it demands from cap 44 tai. The demand for labor has bee 12 so great up to a short time ago that
 seemed to forget its duty to its cour
 try and its new found power. aide
 ana abetted by an ..inside' labor ac ministration. gave it an arrogance ar 7.s independence that made precarious a 3ts plans for the industrial future. w A4 the time ever come when the wort 12 "capitar' and labor" will be wipe ., from the dictionary and a synonym 4 coined representing both-when u
 distinction between employer and en
 ploye will be buried deep beneath
 lasting understanding by both of u ed rights of the other? The sordid re- IS clations concerning the New Yol
 building construction trade shows ho
 necessary such an understanding is f as with such an understanding and u of drawing together of employer and en is ploye with implicit trust in each oth or the repetition of such a condition
 existed in New York would be impo