The Washington herald., 1920-05-03
HfURE PEPILS
ANDPROBLEMS
: Hcts With Which We Are
Now Face to Face Can
not Be Denied.
IMITATION THE GERM
Drastic Measures Only Logi-
cal Remedy for Present
Extravagant Pace.

The credit situation all over the
world has shown the signs Of in
ereasing pressure during the past
month. The Bank Of England dis
count rate was raised from TO Z
per cent the Bank Of France rate
from to s, the Bank Of Sweden
rate from to Z. the Bank Of Fin
land rate from to s. the Bombay
rate from ] to .. The Bank Of
Japan rate has been at 8 per cent
'-since last November.
These advances have been made
for the purpose Of holding the de-
I nands for credit In check, and, of
course. the demands for credit are
due to the scarcity Of real capital.
There is demand for goods Of ev-
cry kind in excess Of the supply,
ana there Is great need for increas-
ed capacity in production. The
world has not gotten back to nor
NAL production and It is behind
with development work and con-
struction. Moreover. 1t is not even
using the existing productive equip
ment to the former extent, for the
hours Of labor have been reduced.
With production thus limited, and
with the people trying to buy more
goods than there are in existence,
and seeking in desperation to make
credit take the place Of capital in
Production, there is great pressure
on the hanks for accommodations.
In short. the same process Of in
flation which was carried on dur
ing the war is still going on. and
the rise of bank rates represents
an effort to check it.
The same tendency Is manifest in
the United States. The Pennsylvania
Railroad Co, a corporation of the
highest credit, IL any railroad cor
poration can be said to be entitled
in these days to that classification,
has borrowed s5O.0oO.o0O during the
past month for ten years at per
cent interest That, and the de-
clining market values of govern
-ment bonds, tell the story of the
scarcity of capital.
rf Problems and PeriIs.
There are problems and perils
more serious even than those in
volvcd in a business reaction. The
state Of the public mind toward the
present Industrial organization, the
prevailing unrest in industry, the
shortage of capital for making
needed improvements in industry
and transportation, the detachment
of wages and prices from the gold
standard and the growing confu-
sion resulting therefrom. are all
matters to give serious concern
THE modern Industrial organization
is a very complicated one. 1t must
be 50 in order to supply the wants
of the present population at the
present standard of living. The
fact is that the necessary organiza-
'tion is so complicated that few peo-
pie comprehend 1t, or understand
the economic laws which govern it.
Hence thsre is endless interference
with its normal workings, to the
injury Of all. An application Of the
fundamental principles upon which
society has made all Its progress
in the past. practicing industry and
thrift. would rapidly improve con-
ditiohs. There Is nothing in the
financial or Industrial situation
which would not be quickly reme-
died b. increased production, but
society will not make a success of
trying to divide more than it pro-
duces or gain anything by breaking !
down the Industrial organization. |
The latter Is subject to change, but |
nobody will be better of for |
changes which reduce production. |
Wage and Price Advances.
The cost-of-living situation is not !
encouraging. The backward spring |
has delayed the coming, Of fresh |
food supplies and exhausted storage
supplies, causing advances which |
with normal conditions might not |
have occurred. The tie-up of trans |
portatfon has had a similar infu-
enee. and the tendency OF prices |
has stimulated the demands for |
wage increases.
Moreover. the general unsettle-
unent of wages and prices has
reached the point whore II il no |
longer related in the public mind to |
the war, or considered as some
thing temporary. The war was end !
ed q year and a half ago: there was |
some expectation then OF a fall of |
prices, but 1t has not been realized. |
An OF the old standards and rela-
tfonships are lost. and a habit of
getting what you can has been de-
veloped. Wages in some lines have
NOT kept pace with the cost of liv-
ing. but in other lines have more !
than done 50. and workers in the |
latter industries are as eager for |
more as those in the former. Those
who received the early advances
yarices are made. and now seek to |
recover the gains they have lost |
So wages are lacked up first In one |
oJiarter and then In another, each
successful demand suggesting 9TH
erS
The bituminous coal miners have
had a raise and anthracite miners |
are after one. The railroad en-
ployes are asking for so per cent 1
advance, and there are rumors of /
more demands in the textile indus
tries. In England the employees in
textiles at Lancashire are out for
50 per cent increase. The rise Of /
wages increases the purchasing 1