The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1920-05-31
CURRENT PRICE MOVEMENTS.

1t is pointed out in bulletin issued
by the Mechanics and Metals National
bank of New York that prices did not
return to their pre-war levels until
twelve years after the close of the
Civil War There is a belief in MANY
quarters that prices will never return
to what they were before the outbreak
of the European war.
The long-predicted decline seems at
last to have made its appearance in
many quarters, and the main question
now in the mind of the public and the
business man Is, How far will prices
falI?'' Tho prices of some special ar
ticles will doubtless move contrary to
the tide, the general level seems to
have reached the flood, and a definite
recession is indicated. The present
turn backward, however, is not LIKELY
to be so great as appears to be imag=
ined in many quarters. A decline
brought about by the forced sale of
goods thru credit scarcity is in its
very nature temporary. And such a
rush of buying as followed recent price
cuts in many cities certainly does not
make for further declines.
There are numerous forces pulling
both ways at Nprices. Tending to pull
them down are the shortage of credit
which may continue to force some
goods on the market; the economy
movement; the protest against high
prices; the falling off in purchasing
power of people who had sold their
liberty bonds and consumed accumu-
lated savings; and finally, the very be-
lief that prices are due for decline.
In addition, increased productions is
indicated in some lines.
Tending to keep prices, up are the
continued shortages OF many COM
modities. with little prospect for re-
lief; the deficiency of railroad equip
ment, which helps to create a short
age of all kinds of goods at the points
at which they are wanted, and the
disappointing outlook for leading
crops, such as wheat and cotton, with
the prospect of poor crops in general
because of the farm labor shortage.
Also tending to hold prices up are the
high costs of production, high wages.
and the labor shortage which works
at the same time to maintain high
wages and to limit production.
In discussing high prices in relation
to the producer and consumer, before
the Economic club of New York last
week, Francis H. Sisson, vice president
of the Guaranty Trust company of
New York, said:
of ie ~uaAn-
ing over thee ountry. It is the most
interesting economic phenomenon of
the day-an event long heralded and
waited for by the public. And yet.
curiously enough. the public is only
tardily awakening to realization of
the fact that it is not only the bene-
ficiary but also the creator of the
movement. Merchants generally
frankly explain that they are reduc-
ing the prices of certain commodities
because the public is refusing to buy
at high prices. In brief. the move
nent is largely psychological, rather
than economic in character"
And it will be well to bear that dis
tinction in mind, he continued, in en-
deavoring to analyze and foresee the
trend OF commodity prices. The re-
auctions in prices that are being made
today are not due to over-production,
for there is, in fact underproduetion
in many essential lines which is likely
to continue for some time. Conse-
| quently, it seems advisable to avoid a
hasty conclusion that the present
movement forecasts q universal and
drastic drop in commodity prices. 1t
may be, and very probably is, merely
an oscillation of the economic pendu-
lum as it begins to swing from the
height 1t reached during and as a re-
suit of the war. altho it seems certain
that we have definitely passed the
peak of high prices.
Our problem. said Mr.. Sisson, is not
to force a price recession as rapidly
and as precipitately as possible, but
rather to bring about a gradual re-
adjustment with a view to stabiliza-
ton. There is quite as much danger
from too accelerated and extreme
price reduction as there is from too
high prices and all their attendant
evils.
The present recession in prices is
concentrating the attention of both
producers and consumers upon the
probable effects upon themselves of
such a decline. The nature of the eff
fects which may be felt will depend
upon the distribution of the declines
turnout the whole range of commodi-
ties as well as upon the extent and the
rapidity with which the declines are
/ brought about.
Our price level has attained its
Unprecedented height as a conse-
quence of worldwide scarcity OF
goods and of extraordinary extrava-
sance on the part of the American
buying public. Production under
conditions of general shortage moves
nm uneveu1y and ovsrtaEAS tho do