The Seattle star. [volume] (Seattle, Wash.) 1899-1947, 1920-10-05
L0W-PRICE
WAVE FAR
REACHING
Inevitable Decline to Pre-.
War Basis Interpreted
by Financial Editor
ny JOHN w. HILL
Financial Editor Iron Trade Review


Henry rord's baek-somersauit to
pre-war prices was the homhsheh
which exploded the hopes OF sellers
Who thought TO lure back business
activity BY some magic other than
Price concessions. They have a clear
er understanding now that war
prices and war profits are doomed.
and that In many cases losses must
bc assumed.
The present wave Is not new or
surprising. 1t Is merely an accentua'
ton OF the price reaction which mas
been quietly working in this country
and In all Industrial nations since
Mt sprtnx. II IA the SCATTERING OF
artificial prosperity and false values
In their place there Is being built a
Foundation for bedrock. sober pros
pertty.
Hixh wages win recede more slow
Is than the cost OF living. High taxes
and high freight rates constitute
fundamental production costs which
must be rcckoned with.
SUDDEN DROP
WOULD MEAN CHAOS
The smashing OF all values over
night would hurl the country Into
economic chaos. Therefore. efforts
are being made to keep the process
o. dcf2ntion orderly. II Is always
better TO walk down stairs than to
Jump out Of the window.
This does not mean that no com
modify will reach the pre-war level.
Copper. silk. wool and hides are at.
Or near. their 1918 quotations now.
Rnw rubber Is some - per cent be-
INV its prc-wsr price. In all Of these
markets there Is degree Of over
production which Is not so apparent
tn other lines.
RETAIL
rDuCES
A. usually happens. retail prices
arv not speedily rejecting the rcdac-
tions In the wholesale trade. Until
= few weeks ago hope was enter
tnincd that the necessities OF the sea.
son would start fresh buying move
mcnt. This has not happened. An
other wave Of retail price slashings
similar TO that Of last spring Is now
being predicted by merchants.
FARMERS FAIL TO
BOLSTER PRICES
Some shrewd financiers believe
that the creation OF almost $40 .poo.-
oO0. 900 In new wealth this year in
crops viii help TO bolster up business
activities. So far. however. farmers
have been NJ backward about buying
~ any other class.
IRON AND STEEL - The one
notable exception to the general
trend OF prices has been in the iron
and steel industry. Its price level
wns maintained by large untitled
orders But the underlying position
Of the industry Is being weakened BY
the sharp decline in new buying.
ALTO PR1CES-The reduction Of
the automobile industry. Aitho the
Ford announcement at first was
greeted In hostile manner by other
motor producers. some have already
fallen In line. and others are certain
70 follow. sooner or later.
FOREIGN TRADE - The abund.
ance OF goods on domestic markets Is
partially explained by falling exports
and expanding imports. The August
excess OF exports. totaiing' SIS. 900.
900. was the lowest OF any month
since October. 1914. The months Inn
ports increased IS per cent oveg 1919.
while exports decreased per cent.
The August record was also lower
than July. whereas In former years
an expansion usually occurred.
DOLLAR GROWING -war infla.
ton humbIed tnc almighty dollar. In
June II was worth 81 cents compared
with pre-wass values. Lower com
modify prices are reviving the dol.
1nr's drugged seif-rcspect. Nothing
Indicates this more wildly than the
recent recovery OF Liberty bond
prices. The advance in bond quota
tons also reflects the easier credit
situation. This has resulted from
falling prices and remarkable clear.
Ing away OF goods congestion by the
railroads.
LABOR SITUAT1ON-The bureau
Of labor reports that out Of IL indus.
tries surveyed in August. 10 showed
fewer employees than In July. This Is
due TO diminished Industrial activity.
Rapidiy.growing immigration will
further increase the labor supply.
and cause readjnstment Of the wages
Of common labor. Immigrants are
now pouring into the country at the
rate Of over 100000 year. This Ia
equal to the peak OF pre-war immi.