Evening star., 1920-05-29
SAYS PUBLIC IS BENEFICIARY
AND CREATOR OF PRICE-CUTTING
Francis H. Sisson Declares Merchants Are
Decreasing Prices Because People
Refuse to Buy at High Figures.

perform their contracts chat by no
general rule can the distribution be :
tween manufacturers and merchant s
of actual losses from falling prices be
foretold If contracts are strictly
honored. necessarily, distributors, as
distinct from producers. are more
subject to the risk of losses from fall
ing prices than are producers. be-
cause in large part the output of fac
tories is sold in advance of produc-
tion.
But not all the emphasis should
be placed on caution. The bold and
confident business man. who is not
daunted by difficulties, but who care
fully studies all phases of his prob
lem and dares to act on his well in
upon to make money whether prices
fall or not.
Position Of Consumers.
THE advantages accruing to con-
sumers in consequence of declining
prices are easily exaggerated and
misunderstood. Most consumers are.
in one way. or another, associated
with production. Falling prices in
the main are accompanied by declin-
ing profits, and eventually by lower
wages as well as reduced cost of
living: but the reduced income may
leave no margin OF gain from the
lowering of the cost of living. Per
sons with assured and fxed money
incomes are necessarily benefited by
general falling prices, but not infre-
quently the so-called fixed incomes
are at the same time rendered less
certain by the declining prices.
1.-The momentum of upward moving
wages, as already mentioned. usually
carries them still higher after general
commodity prices turn downward, but
here again, as in the field of prices.
much unevenness is to be expected.
some wages rising. others failing, but
on the average moving upward Tor
time and then following more or less
tardily the trend of prices. Save. then.
for the advantage in the transition
period when wages tend to move IN
the opposite direction from the fall
ing prices. wage earners as a whole
may be expected to profit little as re-
CARDS the actual buying power OF
their earnings when prices fall. Dur
ing this transition period. however.
I the prospect of continued high wages
points to powerful obstruction
against the downward tendency OF
prices. The buying power of wage
| earners 10 one of the most vital fac
/ tors in the general commodities mar
ket. g
The Crux of the Problem.
The .crux of the whole price prob
lem may be held to be the gradual DC
creasing of the supply of money ana
credit and at the same time the in
creasing of the supply of goods
through properly balanced produc-
tion. To the solution of this problem
bankers, manufacturers. laborers. con :
sumers-in brief, every element or
our body politic-must be actively
dedicated. ~ y
"The popular idea of defation is
some process. vaguely conceived. that
will reduce prices SO that ones In
come may buy twice as much as II
does now. We are all willing and
eager to have prices Debated. but, OF
course. we are decidedly opposed to
having our incomes Debated. That rs
not the way. however. that dehation
works And those who are clamorS
ing for a rapid fall in prices should
bear in mind that drastic dehation
will mean painful economic read
justment. of which widespread unem :.
ployment and business distress would
be features-such as have occurred
in Japan. The average man should
remember that there is not much ad-
vantage in being able to buy twice a s
much for a dollar il he does NOT
have the dollar" =