Evening star. [volume] (Washington, D.C.) 1854-1972, 1920-09-26
PRESENT PRICE DEFLATION
RESULT OF UNITED EFFORT
Will Have Material Effect on Size of Stocks
Carried and Credit Needs of Merchants.
Better Business Awaits Further Cuts.
BY 1. A. FLEMING,

BY l. A. FLEMING.
Events of the past week have made
for more distinct and positive relief
of the money market than anything
that has happened since Armistice day.
The American people have brought
this price-cutting situation on by a
united and determined effort, evil
denced in the carried out intention of
waiting for lower prices before buy
ing. first clothing, then shoes and
finally of everything but the absolute
necessities.
American Wooden Company. the
greatest of the cloth producers on this
side of the Atlantic, accepting service
of the peoples warrant, shut down
for time and then cut it's prices ma
terially. 1t may take a further APP
plication of pressure to get it's product
back to before-the-war basis.
Leather followed and at an accel-
Grated pace, SO much SO that the
leading corporation in this business
passed it's dividend entirely. thereby
shocking it's shareholders. Shoes have
dropped. but there is much to be ac-
complshed in the way of further de-
cline heretofore anything like normal
is reached.
When Henry Ford took the shock
absorbers off of his famous machines
and Jared the motor world with pre-
war prices he but pressed home pre-
vious developments.
At Chicago the two greatest retail
mail order houses, doing an annual
business of many millions of dollars,
confessed that they had read the
handwriting on the wall and cut
prices on many necessities to the
bone.
Next and Next.
And now the jobbers and retailers
of the country are keeping careful.
close watch over the entire mercan-
tile situation.
1t goes as nothing more than the
exercise of common sense to say that
they will not put in large stocks OF
merchandise in present uncertain con-
ditionS.
Many retailers have complained in
the past of inability to obtain stocks
This complain has been Cancelled, as
also many orders with manufacturers
and distributors for merchandise
It will be more hand-to-hand bust
ness with retailers, until such time
as normal conditions prevail, with
frequent replenishing orders as m ,iear
chandise may be needed, to KEEP
stocks small and up to date at the
same time.
Steel should Join Parade.
Prices for steel products and for
building material should join in the
parade to lower price Levers. Line
automobile manufacturers nave peen
large users of steel, but a recognition
of trend of the times should BRING
reduction in prices wltnout fe Gaatas
nrofits to any serious extent. greater
productivity in this field but waits
for the expected price reductions.
Orders for millions of tons OF rails
and steel for equipments from the
railroads of the country. IN their re-
habilitated state, but wait the reduc-
ton in the price OF steel. Inc NOUS
ing problem is acute.
It is. of course, question whetner
the steel manufacturers can meet the
demands of users for price conces-
sions and continue to pay the mgr
prices for coal and labor, as MT. foro
lis doing.
Great Monetary Saving.
Price reductions so far existing, the
sarious slump in cotton and corn. the
big drop in wheat, the severe cut IN
cattle prices and other necessities,
will greatly reduce the needed volume
;of money, while the small stocks
which retailers will carry will also
lessen the credit demands.
A readjustment was certain
and signs have pointed
istrongly in that direction for months
past.
The money market will. so soon as
the crop movement is at an end' re.
fleet the easier conditions and present
high rates will, in all probability, be
Investors are anxious to get their
funds placed for as long as possible
lin bonds paying the going hlgh rates
of interest, as evidenced by the greal
success of the French loan. the New
I
per cent and even per cent equip
jment issues and the recent sharp al
vance in liberty bonds, which nave
lately been selling at a very hlgn
they understand that there Will pc
la money adjustment, and back TO
NEARLY normal rates.
1t may be some months, mayhap
years, before this readjustment comes,
but in time it will come.
should BE Welcomed.
This return to the sanity Of normal
periods should be welcomed by all,
even the manufacturers who partici-
pate therein.
Business has been sidetracked and
held up by high prices too long.
In every city in the land building
operations have languished until the
American family in the urban sec
tions have been brought to the point
where they talk of one and two rooms
as suitable accommodation with the
prices as unreasonable as $25 and
more for pair of shoes, compare
lively speaking. AS one authority
said: 1T is un-American for the
American family to live in two
rooms
Many Profits Profitable.
A multiplicity of small profits count
Just as big in bank deposits and will
probably go farther than a paucity
of big ones, and this Is one factor
that will make for reductions in liv-
ing. now fairly initiated.
With lower prices for steel and
building materials the factories now
beginning to slow down will be
called upon to speed up: money will
be nearer the normal, building op-
erations will revive, If labor does not
throw a monkey wrench into the ma
chinery. while the lower cost of liv-
ing. which seems assured, should