Richmond times-dispatch. [volume] (Richmond, Va.) 1914-current, 1920-05-24
Tho Shaking.Down Process

THERE is nothing alarming in the bust
1 ness life Of the nation at this moment.
1t is true that there is general liquidation
OF stocks on the part of many individual
houses, and price cutting in many direc-
tions, with less profits for many firms. Some
money will be lost by still other firms,
credit may be harder to get and other con-
ditious will obtain which seem disturbing,
yet the country is both sound and safe.
There is nothing fundamentally wrong
with it. and the moderate depression which
is being felt in many quarters will soon
pass.
Nothing is more encouraging just now
than the fact that Notwithstanding all the
unfavorabe symptoms, the contraction
which is going on, the freight congestion,
the vast amounts of money tied up, and
tho weakness OF the stock market there is
no panic talk in the country. Nobody is
looking for crash. Nobody expects the
bottom to drop out of business There is
no frenzy in the situation. There is moth
ing but calmness, sureness of the future
and an evident willingness Of most inter-
csts to make such sacrifices as may be
necessary to bring sterilization to the un-
steady markets of the land
For the time being the merchandising
end OF the nations business is most acutely
affected by prevailing conditions. Scores
OF large mercantile establishments are cut
ting the prices Of their stocks. They are
not merely Offering rare bargains, as has
been their practice on fixed occasions, but
they are going through their houses and
making horizontal cuts in prices. They
want to realize on their goods. They want
TO be able to buy fresh stocks at the new
prices which will prevail in the markets
where they do their own purchasing. And
they do not want the buying public to hold
of because OF dissatisfaction with the cost
OF living.
All this makes for lower level OF prices
generally The food prices. however, may
not react downward as rapidly as those Of
other household necessities. The public
should not deceive itself In that particular
Food prices are still excessive and they
may remain on an excessive level for some
time hut once the shaking-down process
begins, eventually it will affect all lines of
trade and eventually the country will get
down to rock-bottom with the purchasing
power of its dollar greatly increased
One of the most wholesome phases OF
the present situation is the decision OF the
banks generally, following advice given by
the Federal Reserve Board, to curtail credit
so as TO make speculative buying hazardous,
If not impossible. Speculation has been I'M
restrained for three or four years in this
country. Everybody knows that. There
has been gambling in necessaries OF life in
much the same fashion as the gambling in
stocks and bonds, and there has been much
unnecessary buying, on borrowed money, in
the direction of Injuries.
With credit curtailcd and loans harder
TO make, the Spectator will now find him
self unable to do business. with the result
that there will be more money and credit
available for absolutely legitimate bust
ness. This is healthy condition and one
which will have its effect in many impor-
tant directions.