New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1920-05-24
Prediction of Permanent
Slump by New York Uni
versity Dean Opposed by
Clothing Trade Journal
Increase Next Fall Seen
Thirty Per Cent Rise Over
Spring Costs Forecast:
<'Million Club" Formed

While bankers and economists every
where are announcing that the recent
price cut is due to falling off in the
demand for high-priced goods and
presages return to normal condi-
tions, wholesalers and manufacturers
insist the movement is nothing more
than temporary wave of price cue
ting, without either permanence or
significance in it's relation to the gen.
eral situation in the near future.
A statement made public yesterday
by Joseph French Johnson, dean Of
the School Of Commerce Of New York
University. demonstrates the first view.
In opposition to this, the Haberdasher
Company, which publishes "The Haber-
dasher" and "The Boys Outftter," has
issued in advance of publication an
editorial of the former publication
which states that not only is the pres
ent tendency toward lower prices in
mems and boys clothing purely
ephemeral movement verglng on
stampede of nervous retailers, but that
prices next fall for clothing generally
will be higher than at any time pre-
viouS.
Views Widely Divergent
Professor Johnson says that it is
impossible for the country to escape
a collapse in prices, and that it Will
occur within the next two years. "The
Haberdasher," speaking for the cloth
ing trade, asserts that nothing short
of a nationwide cataclysm can pre-
vent an increase in prices next Au-
tumn averaging 80 per cent above the
spring prices"
The statement issued by Dean
Johnson declares that a selling move
ment is now beginning to take the
place of the reckless buying and con-
sumption which have prevailed for the
last few years. "On all sides" he con-
tinues, "there are unmistakable signs
that prices have started their humping
downward journey. And / certainly
hope the slump will not be so rapid
as to bring on a panic.
"There are several reasons why
prices are bound to continue down
ward. In the first place, most of the
world is On a paper money basis and
in the United States we have extended
credit to the limit, despite our huge
importation of gold during the last
three or four years. l do not see how
we can escape collapse and l look for
it W thin two years.
NORMALLY, the level of prices should
range downward during the present
calendar year. First, because the pro-
duction of goods is increasing; second,
because We are likely to lose some of
our gold stock, SO that our banks will
be forced to contract their credits, and
third, because the Federal Reserve
Bank is already enforcing the policy
of restri ction. 1t should not have en-
couraged the policy Of expansion few
years ago, but it did so, and it is now
confronted by the very difficult prob
lem of contraction.
Salaries To Fall Last
"The fact that the banks are behind
best assurance that the downward
course will continue. The decline of
prices will first affect our security
market. The prices of stocks have
already weakened. Then the prices of
some of our speculative commodities
will suffer. Interest on loans has
greatly advanced in the last few years.
"The prices of wholesale commodi-
ties will decline here and there and
there will be downward fiurries in the
speculative markets for commodities
tail prices then gradually will fall and
last of all, real estate, rents, wages
and salaries"
This succinct summary of one of the
countrys leading economists is directly
controverted by the official organ of
the mems clothing trade.
Nothing is to be gained by permit
ting the public to delude itself into the
belief that prices of mems and boys
oLol
or the decline, when the contrary is
the fact" says THE Eaberdasher ="
Nothing short of a nationwide cata-
clysm can prevent an increase in prices
next autumn averaging 80 per cent
above the prices for spring, on which
of late heavy reductions have been
made in many sections Of the country.
The upward trend cannot be avoided
by any possible development in the
agencies combined are helpless to
avert it.
Government System Wrong
What they seem to have forgotten
In the Federal Reserve Board and in
from the published statements eminat-
Ing from these two quarters, is that
the retailer orders his goods, and must
order them, from three to nine months
before the time of delivery and retail
sale; that the merchandise to reach
the consumer over the retail counter
next autumn either has been or is now
being bought from jobbers and manu-
facturers and that without exception
every line of wearables for men and
boys is being marketed at price in
creases ranging from Is to so per cent
and averaging, as stated, 80 per cent
Increase
"The whole theory and plan of the
governments attempt to reduce the
cost of apparel is fallacious, and flies
IN the face of exixting and recognized
economic conditions that can in no
wise be changed by the methods now
being employed. Even the widespread
cutting of retail prices can have no
lowering effect upon the prices at
which retailers have bought and will
buy in the next three months their fall
stocks.
at must be admitted that the tight
ening of credit has contributed to this
unloading, and that the scale of retail
prices deferred a portion of the middle
class, salaried element. from buying to
q normal extent. But it was princi-
pally because of adverse weather dur
ing spring that stocks failed to move.
and retailers. deprived by the govern
ment of credit facilities which have
been the mainstay and backbone of
our industrial system from producers
to dealers, realized that they would
have to stand loss in order to keep
their forces Intact and to meet their
overhead expenses"
NJ d..