The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1920-12-24
THE. sLUMP IN BUSINESS.

THE, SLUMP IN BUSINESS.
! The Iowa State Bankers associa-
ton, in session on Wednesday, listened
Jr.. economist of the Chase National
bank of New York, on the subject of
international Trade in Relation to
Farm Products and the Mid-western
Banker"
The present slump in business and
prices, including prices of farm prod
ucts, Doctor Anderson regarded as the
prosperity and abnormal prices de-
veloped by the wastes of the war and
| by the abnormal export balance of
trade which was even greater after
the armistice than 1t had been before.
He said that there are many factors
involved but that the basic fact Is that
Europe has not been producing
enough for her own consumption for
six years, and that the United States,
in their relation to Europe, have been
in the position of retail merchant in
factory town where everybody is on
strike. Such merchant can do an
enormous business as long as he will
give credit. He can charge high prices
and get them, so long as he will accept
his pay in the form of book accounts
But the time comes when his working
capital is too much tied up in extern
sions of credit to customers. and when
he finds it better to sell for cash even
at reduced prices
Doctor Anderson protested against
palliatives and measures designed ar
officially to sustain prices. He said
that we must go thru our liquidation
process courageously, face the facts,
and make prices at which goods can
be moved. He urged that it was far
better to take losses on existing stocks
of goods than to invite a prolonged de-
preston by artificially maintaining
prices at which goods could not move.
He deprecated the tendency to call
upon the government to support fall
ing prices, and endorsed the position
which the federal reserve board has
taken with reference to handling the
present emergency. He declared that
the general credit situation in the
country is impregnably strong, tho in
dividual failures have occurred and
will continue to occur, and he ex-
pressed the conviction that no bank
ing or currency panic is possible.
Doctor Anderson said in part:
Nothing is to be gained, in my
judgment, by the effort to resist this
movement of prices. 1t is far better
that market prices should go on in
regular course until stable prices are
reached. For farmers or merchants
to hold back their goods is apt to
mean merely that they will take lower
over the country on the part of sellers
to withhold goods from the market
would mean merely that production
would be slowed down, men thrown
out OF employment, wages and profits
slashed, and the general buying power
of the public reduced, which would
mean that prices would go yet lower.
1t is far better that prompt readjust-
ment of prices should be made to a
level which business men can trust so
that active production may speedily be
resumed and the buying power of the
public revived with increasing in
comes. At what levels prices will be
stabilized, only experiment can deter
mine. But that the open market. with
free two-sided competition, will de-
termine levels at which goods will
move and on the basis of which pro-
duction can revive, there is no doubt
at ALL"