The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1921-11-14
IREADJUSTMENTERA
NOT YET COMPLETE
is BOSTON'S BELIEF
Purchasing Power Is
Now Below Cost of
Production.
STORE TRADE DULL
Strong Pressure Is Needed
To Eliminate Surviving
Maladjustments.
STORE TRADE DULL


NAosooJ eos.aSAsos
Especial Correspondence Of The washins-
ton Herald and =. Z. Evening Post.)
BOSTON. Nov. ls.-ThIs commun-
ity seems to have resigned itself
to the reflection that the morrow
shall take thought for the things
of itself. In other words. we are
living in the present and not cross
ing bridges until we come to them.
For example, when a bank official
who IL In a way To know a good
deal about the textile industry was
asked this week regarding the out
look for the cotton mills, he said
that they would have to advance
their prices when they began to
run on cotton bought in recent
weeks. Suppose. someone remarked.
the people have not the money TO
pay the advance. In that case, he
replied. the mills will undoubtedly
have to consider the question Of
cutting wages again.
There you have Il. Everyone
knows what the international sit.
uation most needs. but the pres
sure to apply the remedy Is not
yet strong enough The one I'M
mistakable fact Of the situation Is
that purchasing power Is relatively
lower than cost OF production. The
necessaries Of life wear out and
people have to replace them, but
they arc doing SO on a meagre
scale: instead OF buying literally
because prices seem TO them rea-
sonabIe. they are convinced that
prices will have TO fall and that
they can AFFORD. barring some ext
gent needs, to await that event.
No BustIe In the stores.
In Boston there is no hustle IN
the stores. Seasonal goods are
being purchased where there is
actual need. but where the need is
not acute there is on all sides a
tendency to make old things last
longer. This tendency does not
spring entirely from necessity. but
Is in no small measure due TO an
unwillingness on the part of the
consuming public TO act as a prop
to artificial conditions.
From all parts of New England
comes similar story. General
business is still below normal in
most lines; there is still a large
amount "f unemployment: every
one feels the need of economizing
Among no class is the economic
ing spirit more pronounced than
among wage earners. Up to a year
ago wage earners spent their en-
BANGED earnings with prodigality.
Today they are putting what they
can spare from reduced earnings
into the savings banks. Though
the Federal government prints fig
ures showing a handsome increase
in savings bank deposits. and par
ticularly here in the East. il is
nevertheless a fact that in some of
our leading industrial centers de-
posits have in recent months not
materially exceeded those of a year
ago, and in some cases they have
fallen below them.
In the Experiment Stage.
The surface talk deceives no one
II in some quarters there is more
industrial activity, il, certain prices
have been marked up. these facts
are not regarded by anyone as
conclusive. The whole situation is
viewed. in fact, as tentative-as
experimental. Wholesalers have
been ordering goods from the
mills, but today manufacturers are
reporting cancellations of spring
deliveries.
Again, the talk of heavy bank
reserves and lower discount rates
does not impart a cheerful feeling
to every mind. Bank reserves in
creased prodigiously after the panic
of 1898, but il was not until 1898
that the gloom of hard times began
to be actually dispelled.
Conditions to BE Riehted.
The greatly augmented bank re-
serves are, of course, a good sign;
they indicate the thawing of no
small amount of frozen credits and
are a long step in the direction of
speeding up industry when certain
other conditions are right. These
conditions are not right at the
moment: no one knows when they
win be. and no one knows just
what the process of making them
right involves.
The future is still full Of uncer-
tainty. The cost of living must be
reduced in order to stimulate the
consumption of goods-the cost of
living means the cost Of labor. Ad-
hitting that that is the only way
to revive prosperity. does IL follow
that prosperity will Immediately
ensue IF labor costs are drastically
cut?
Though we may try 70 believe
that German finance is nothing TO
us, we know better. In a financial
sense Europe appears to be verg-
ing on a situation in its way quite
as extraordinary as the military
situation created in the summer OF
1914. One hardly dares conjecture
the outcome Of that situation. The
contingencies are such as to make
American financiers and Industrial
lists view coming months with