The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1920-12-28
ALL IN THE SAME BOAT.

The federal trade commission, in
special report, analyses the causes for
the decline of wheat prices, which it
attributes in part to the countrywide
and worldwide condition, but assigns
besides seven specific causes, namely:
The outlook for increased world sup
ply; concentrated buying by foreign
governments last spring, and slack
purchases later; unprecedented impor-
tations from Canada following an I'M
precedented yield and a discount in
rate Of exchange; the~Eecord-breaking
yield of corn in this country; the
slackening of demand for flour; the
general tendency to decline in many
commodities; and the change in credit
conditions, with resulting disposition
of distributors to refrain from accu-
mulating usual stocks.
On the sixth of the causes enumer-
ated probably rests the greatest de-
gree of responsibility. Everything has
come down or is showing a tendency
in. that direction. There Is conse-
quant depression in many lines of
business as well as that OF the agri-
culturist.
Something OF this depression is re-
Elected in practically all lines of trade,
in every department OF Industry and
particularly in finance by the reports
which form the basis of the monthly
bulletin issued by the Federal Reserve
bank at Kansas City. 1t is to be seen,
the bulletin says. in the slowing down
Of merchandising, in curtailed manu-
featuring, in reduced activities at the
metal mines, in restricted develop
ment operations at the oil fields. in
the smaller movement of grain and
livestock to the markets, in increased
building stagnation, in a larger num-
Der OF business failures, in a tighten
ening of money and credits. besides
greatly increasing unemployment.
Yet, looking the situation squarely
in the face. men OF broad vision and
keen perception-mercha manu-
facturers, farmers, stockmen, bankers
noting that progress is being made
in the direction of readjustment-ex-
press the belief that conditions should
soon be righted and business proceed
on a broader and more dependable ba-
sis than that which has prevailed
since the beginning of the world war.
A correspondent of the Bache Re-
view writes to his firm as follows:
The purchasing power of the farm
er is moot question. That it is a
factor of great Importance IN trade
must be at once conceded. / do not
know of any official figures that will
serve as guide. There are approx
mately seven and one-half million
farmers in this country, which will
give you some conception of their po-
tential buying power. I agree largely
with conclusions stated in last weeks
Review, and do not believe the buy
ing power of the farmer has been inn
paired to the extent generally under
stood, The grain farmers of the
United States, as a ciass, are the most
prosperous people in the world. Pres
ent prices are low in a relative sense
only. The farmer paid off his mort
cages and acquired wonderful pros
perity based on a dollar per bushel
for wheat, SO cents for corn, and 80
cents for oats. This latter condition
came about prior to the war. For five
years out of the last six, his earnings
have been enormous, and while in
many instances the crops of 1920 are
selling below cost of production, this
Is not true in general, in my opinion.
In estimating loss, most statisticians
use prevailing values for land, where
as the great bulk of the farms cost
their present owners from one-tenth
to one-haIf OF recent market prices.
After all. future prosperity of all
| industries and the trend of prices
probably depend largely upon the rail-
roads 1t has always happened that
whenever, in this country, the rail-
roads started in to buy on a large
scale, all other businesses began i'm
mediately to quicken up; and general
prosperity followed. The railroads
need to spend from four to six billion
dollars to bring their properties up to
even present-day requirements. If, in
addition, a campaign of needed extern
sions were begun these expenditures
would be added to. This would give
IA forward impulse to all buying. with
resultant advance in prices of sta
pies.