The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1920-12-03
NO CAUSE FOR WORRY.


AS a lack of buying helped to cause
fall in prices, the fall in prices has
now caused a lack of buying. The
depression seems at first glance to
work in a downward cycle. lack of
buying causing lower prices and a
shutting of factories, and these in turn
causing unemployment and reduced
purchasing power.
Business readjustment in the United
States has proceeded at so rapid a
pace. and the recent downward trend
of prices has been so severe, that there
is no mistaking the distance which the
country has proceeded along the path
of after-war deflation. From prices
early in the year, wheat before the
close of November was down from
1925 to $1.s6, corn from 1881 q to
90 cents, coffee from 16A to 6A
cents, sugar from 23 to ~ cents, cot
ton from 40 u to 16 cents. To lesser
extent meat and dairy products, met
ais and almost all wholesale commodi-
ties nave participated in this decline
Security prices are severely shrunken.
Industrial and trade activity areA far
more curtailed than at any period
since the early months of the war.
With sellers of goods concerned
over their inventories, with buyers
holding aloof. with no confidence in
the market, and with an increased
rate of business mortality. factories
that up to short time ago made
goods in abundant supply are closed,
labor that as shortly as three months
ago was in demand is idle, and goods
for which there was recently an I'M
satisfied and even urgent desire have
piled up.
In contrast with the extreme opti-
mism prevailing less than a year ago,
says a bulletin issued by the Me-
chanics & Metals National bank of
New York, the severity of the present
reaction has thrown spirit of de-
preston over the entire community.
This has added to the momentum of
the decline in prices and intensified
the curtailment of business in a fash
ion that manifests afresh how strong
ly people are governed at times by
their emotions rather than by their
judgment.
For, says the bulletin, such cycle
cannot continue, any more than the
so-called cycle which raised prices and
wages to their recent extravagant
heights. Conditions discouraging as
they may seem, contain within them
selves the seeds of their own change
for the better. The orgy of extrava-
gance has passed. Dubious enter
prises are being abandoned. Much OF
the labor absorbed by luxuries will
now return to the manufacture of es-
sentials. A stop is coming to the
wasteful and extravagant business
methods that grew up in the last few
years. Insecurity of tenure and less
overtime work have already greatly
raised the efficiency of labor.
The efficiency of management will
/ now increase; to overcome the handi-
caps of high costs of production and
lower prices, improved methods OF
production will be introduced. The
freight congestion problem, which for
time seemed insoluble, is solving it.
self. To the gradually increasing eff
ficiency of the railroads under private
management and the return of self
dependence upon earnings, plus high
er standards in loading and unloading
and in car movement, has been added
the factor of a declining volume OF
goods seeking to be moved,
1t is apparent that the very falling
off IN buying at this time must soor
or late result in a large accumulated
demand for all goods. Just as a few
months ago supplies were underesti-
mated, so now the tendency is greatly
to underestimate eventual demand
1t must be remembered that W,
have still our wartime loss to make
up. Not a few of our railroads arr
worn to bedrock, and all of them re
quire vast quantities of material fol
their restoration and extension. W,
have had relatively, little building o
homes in the United States for years
Much property has got along with I
minimum of repairs and improve
ment individuals in great number
have postponed purchases of clothing
and other articles of personal use
rather than pay the extraordinar,
prices lately demanded. All this sig
nifies q very heavy buying demand
In addition to the domestic require
ments of more than 1oO.oOO.OO PEG
pie, Europe still calls for great guam
titles of our goods.