The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1920-02-10
A TIME FOR CAUTION.

There appears to be a widespread
belief among financiers that there is
too much money in circulation. To
this fact they attribute the failure of
prices to come down. The recent ad-
vance in the discount rate by the fed
eral reserve banks is regarded as the
first step in the direction of defla-
ton of the currency. 1t has the APP
pearance of being an effort to reduce
waiting for the law of supply and de-
rnaLd to work out the problem.
Farmers and laboring people are get
ting a fairer pay today than ever
before in the history of the country.
There is more widespread prosperity
than this or any other country has
ever enjoyed. Manufacturers and
merchants are making more money.
farmers and mechanics everywhere
are enjoying a hitherto unknown pros
peritJ.
It Is true that high prices and high
wages are working a hardship on some
classes, hut they are limited in num-
bar as compared with those who are
being benefited by high wages. and
sooner or later there will come an
adjustment in their pay which will
give to teachers and preachers and
clerks salaries commensurate with the
cost of living.
It is true that labor is not produc-
ing so fully as it should do, but this is
only the natural outcome Of the
changes which have come about by
reason OF the war and of high prices.
The labor unrest is less pronounced
than it was some months ago. Not
withstanding this almost universal
prosperity and the fact that people
are living better and more comfort
ably than ever before, there has ap-
peared a. disposition among the finan-
cial influences of the country, led by
the Federal Reserve bank, to bring
about defiation in order to lessen this
activity and to break down prices and
wages. There can be no deflation of
wages or of prices without bringing
on a condition which would endanger
the prosperity of the country.
The situation is entirely unlike any
thing in the past. It is entirely posi-
BILE for the federal reserve board to
duplicate the panic of 1873, and by
somewhat similar methods. but g.
panic brought on at the present time
thru deflation would be very differ
emit panic from that which caused such
disaster in '73.
No one can question the facts that
some wages are entirely too high, that
some laborers are inefficient and not
producing in proportion to pay, any
more than they would question the
fact that many lines. of manufactured
goods are entirely too high and are
yielding an unfair profit to the pro-
ducers. The laborers are not more
to blame than manufa cturers whose
profits are too big and than many
merchants who are gouging the pub
lie because the public has been will
ing to pay the price. There are, how
ever, natural economic laws which in
due time regulate these things. If
prices are too high, people will after
q while quit buying. This would bring
about a natural readjustment, which
would gradually bring things to a
more normal condition instead of fore
ing this readjustment by unwise and
premature action.
An enforced contraction of the cur
rency and a drastic curtailment of
credit are serious matters and should
not be undertaken Ill advisedly. When
prices once start downward it may be
found impossible to apply the brakes,
even tho it might be considered de-
sirable in every way to do so. Wreck
and ruin might easily follow.