The Brattleboro daily reformer. (Brattleboro, Vt.) 1913-1955, 1921-05-04
LOWER PRICE LEVEL
IS INEVITABLE
Head of American Bankers
Association Surveys
Economic Situation
REIMBURSEMENT
MUST BE GRADUAL
Drop In Commodity Prices Will Preeede
Reductions In Wages-InereaSed Rail
road Rates Have Disastrous Effect -
Retailers Coming Down.

Reductions In Wages-Increased Rail
road Rates Have Disastrous Effect -
Retailers Coming Down.
pINEHURST, y. C.. May 4.-Neither
money transportation costs, taxation nor
labor can effectively or permanently avoid
the irresistible forces that are working
toward readjustment on a lower level,
John s. Drum, San Francisco, president
of the American Bankers association, de-
clared in a survey of the economic situa-
ton in the United States submitted to the
associations executive council here today.
Mr.. Drums statement was based on
more than 1000 replies to a question
naire sent by the association to bankers,
heads of transportation companies and
other business leaders asking for authori-
tative opinions as to financial, commercial,
industrial and agricultural conditions in
the nation.
All elements in the nations economic
life must fall into line in the process of
readiustment, the report said.
'It would work to the disadvantage of
factors that would, if they could. keep out
of line with the rest it added. The
weight of opinion is that this tendency
toward sterilization viii not be accom-
plished in the year or the two years that
lie just ahead of us
The process of readjustment must be
gradual" Mr.. Drum said. First, one
element, then another, feels the operation
of the inexOrable forces that are working
to restore normal conditions
Common Sense Needed.
Common sense, and a knowledge of
fact, with clear vision, Mr.. Drum declared,
must guide the nation in its struggle to
solve the broad economic problems that
have grown out Of the war and the peace.
Our survey has shown that the great
economic problems fall into two classes
which may be expressed in terms of the
problems of production and those of costs
and markets." the survey said.
Discussing labor, the survey said wages
did not rise as rapidly as commodity
prices during the war and the imitation
period and their general tendency will be
the last to fall with readjustnent. Wage
reductions have been accepted in many
industries. but not in the building trades
and among railway employees. Mr.. Drum
said. The effect of this resistance to the
economic laws working toward stagnation
is apparent in comparative Stagnation in
most parts of the country in all except
essential building construction and in the
great decrease in railway traffic because
/ of high rates caused by operating costs, y
he added. f '''""'- "' '.'f- -..
Materials First to Drop.
Under the heading of Materials the
survey said they were the first of the ele-
ments TO feel the upward impulse when
the war came and already were the first
to respond toward a new lower level.
Touching on the railroad situation. Mr..
Drum declared rate increases at u time
falling. had disastrous influence on the
nations business. The So-called liquida-
tion of labor has been perhaps the princi-
pal cause of these strangling freight
rates.
The survey showed there is discomfort
with systems of taxation which Mr.. Drum
said never were just in principle nor sci
entitic in method of collection. There is
virtually unanimous opposition TO the ex-
cess profits tax. Majority sentiment IA
yors n sales tax to replace the excess
profits tax.
Answers to the questionnaires. Mr..
Drum said. showed there is reasoned oppo-
sition to cancellation of the allied debts
to the United States. based chiefly on the
argument that cancellation would greatly
increase taxation in this country.
Despite buyers strike. many retailers
We're unwilling to take their losses and
sell for lower prices, Mr.. Drum said. in
discussing domestic markets. This con-
dition has changed and now many retail
ers are marking down prices to basis
of present costs.
Big Stocks on Hand.
Cancellations of orders followed re-
duced sales and, as a result there are now
great quantities of all kinds of manufac-
tured goods for which there is no de-
mand, lying in the hands of manufacture
ers.
Opinions indicate that the decline in
domestic markets to n great extent has
been caused by, and is a reflection of, an
even more serious fall in foreign demand
for American goods
I'VE must help the countries of the
world financially" Mr.. Drum said, so
they can become customers by using our
raw materials and our manufactured
goods in such quantities as will keep
American capital and American labor and
American natural resources employed to
their full capacity. We must become a
nation of foreign traders"
The bankers of the nation. Mr.. Drum
concluded, must take the leadership.