Milford chronicle., 1920-12-03
BANK PREDICTS CUT
In FACTORY PRICES
REFORM In METHODS OF RETAIL DIS
TRlBUTION ALSO LIKELY, THE ma
TIONAL CITY REVIEW SAYS.
FARM BUYING POWER HIT
LABOR, THE ARTICLE HOLDS. MUST
BEAR ITS SHARE OF THE BURDEN
IN FORM OF REDUCED WAGES.

The National City Bank of New
York in its November discussion of
business conditions asserts that the
downward movement of prices has
gone too far in some directions for
confidence to be restored or buying
stimulated until it has gone further
in other directions.
There can be no restoration of
confidence" the bank adds, until re-
tail prices are in line with produc-
ers' prices. This is no time for re-
ordinations about the blame for high
prices or large stocks.
The situation may result in per-
manent changes in the methods of re-
tail distribution. The tendency has
been toward chain stores and distri-
button on a large scale by people who
buy direct from producers or through
agencies controlled by producers. The
present deadlock and inability of pro-
ducers to make their reductions eff
fective to consumers will stimulate it,
More shoe factories are going to have
their own retail stores for the sake of
controlling prices to the public. The
farmers are aroused over the failure
of retail prices upon fruits and other
products TO come down and thereby
stimulate consumption when products
are perishing. Possibly the retailers
sometimes get more blame than is
coming to him, bute this is a time
when it behooves every one to play
the game of cooperation so openly
that all can see what he is doing.
In discussing the situation as re-
lated to the farmers, it is asserted
that the loss of purchasing power
amounts to 80 or 40 per cent. or be-
tween $4,000. 100000 and $4,000, ,000,0 600
as compared with last year. 1t would
be foolish" says the bank, for peo-
pie engaged in other industries to
think they can so on making and
selling goods as though this loss had
not occurred, while enjoying the ben
eft of the reduction in the cost of
farm products. The condition neces-
sary to revival in business is held
to be a reduction in the price of goods
which the farming population wants
to buy to correspond with the reduc-
ton in the prices of what it has to
sell.
Until then the state of reciprocity
which is necessary to the full en-
ployment of labor and general pros
perity cannot exist. The equilibrium
must be restored. There will be no
confidence in the situation until the
equilibrium is restored. Merchants are
not going to buy goods which they
know their customers are unable TO
buy. railroads Will not buy equip
ment to carry goods which Will not
be bought, construction work will be
at a standstill enterprise Will be
dead, until a basis of fair exchange
for the products of the industries is
reached"
The stand of organized labor
against a reduction in wages is held
to be natural, since no one wants to
take the back track, but the bank
points out that, as wages and farm
went up fairly well togeth-
er. il is a mistake to think that they
are not coming down together, for
they are tied together by economic
law. 1--WE do not believe the wage
earning class will be obdurate," says
the bank. when the situation is un-
derstood in all its relations. They do
not want to lose any real gains, but
there are many signs that they will
accept lower pay if the purchasing
power of their wages is not reduced.
That gives basis for agreement. An I
official of the American Federation of .
Labor is quoted as saying that there .
must be no reduction below the levels .
Of 1914, with allowances for increases /
IN the cost of living. That sounds all .
right, but it must be borne in mind
hat the cost of living is not some
hing imposed upon the wage-earning
class from above or from the outside;
{ is largely dependent upon the wages
hey insist upon having and their own
,ttitude toward their work. They
;hould not disclaim their proper
hare of responsibility for the cost of
living or think they can make some
mo else hear il "