The Washington herald., 1920-10-14
Falling Prices and Prosperity.

falhng rr1ces ana prosperity.
1.-TWO THOUSAND members of the National
Association of Purchasing Agents, assem-
bed in convention in Chicago, declare it to
be their opinion that prices will continue to drop
during the winter and offer for the instruction and
guidance of retail buyers the following suggestions:
Prices have passed the peak and COM
The downward trend has not been checked.
are reducing our industrial inventories
Rsstrict buying to the needs Of the present
price Understand thoroughly the market
Not retail buyers only but those who serve the
retail trade will do well to accept the inevitable
reduction of prices that is now under way That
movement, if recognized in time, and properly fol-
lowed in business circles will be Of inesmabe ad-
vantage to consumers who have groaned under
high prices and high taxes without in many cases
any set-of in the way OF high wages.
But if ignored, or if there shall be efforts to
thwart by uneconomic means the movement which
is as natural and as irresistible as the movement
OF the tides, there may result long and dscour-
aging period Of industrial and commercial depres-
sion
The absolute necessity for adjusting methods
and practices to this order does not rest up
on housewives and retail buyers only. 1t applies
to the producers well 1t is peculiarly applica-
bic to labor, which is the chief factor in the high
down because the OF the people whose in
comes have not been artihcally raised could not
afford to pay them And as it is common expe-
Tience that buying is not brisk on a falling market
we may expect the lapse OF some time before trade
resumes the normal it maintained before
the cost OF living than doubled But it
will resume that unless arthcially inter
fered with The chief interference to be dreaded
is the limitation of production through the arb
-. IL
An illustration of this very emphatic and dis
queting illustration, is to be found in the housing
shortage throughout the United States To remedy
it legislatures being called in hasty session,
and passing laws OF doubtful constitutionality
and still more doubtful efficacy. They are in most
cases planned to confer upon the tenant some
special privilege by way Of overcoming the normal
advantage OF the landlord in times when the SUP
ply of houses falls far short OF the demand. Some
devised TO give special advantages to the man
who will build now to meet that demand, and con-
fers this advantage at the expense of those who
built yesterday, and whose houses are OF quite as
much economic Importance the new sought.
These laws will accomplish only a temporary
relief, and may in the end actually enhance the
gravity of the situation they are intended to cor
rect
With a rapidly increasing population, and with
that population madly bent upon locking to cities
and towns leaving farm houses untenaned and
farms untitled, shall continue to suffer from
housing shortage until the construction Of houses
increases as fast as the population seeking them.
Construction was virtually abandoned during
the war. 1t has not been resumed since for the
very simple reason that the artificial standard Of
wages established during the cannot be main
tanned today and houses built at prices which peo-
pie can pay. This fact obtains in every branch of
production engaged in making the materials Of
which houses built
Not high wages alone, but irregularity OF work
and limitation of product affect this problem Ev-
two years has been blocked by the inability of
contractors to fix prices because OF the uncertainty
of the labor market. The brickayer who once
laid LOO bricks in day lays 500, and is so
well paid for the smaller effort that he is inder-
ent as to whether he works a full week or but
three four days 1t has long been accepted as
an axiom of economics that high prices curtail buy
ing, but the experience Of the last few years
TO have established corollary the fact that
high wages impair the efficiency of labor.
Against this the labor unions will no doubt bit
terly protest but it is theory coming to be so
firmly implanted in the public mind that it would
be worth the while OF some leader, having the
confidence OF the public, to offer convincing proof
OF its falsity.
Labor can only share in the advantage of a
general fall in prices if it increases its efficiency
Otherwise its price will necessarily fall too