The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1921-04-02
rHE STORM HAs PASSED.

The present industrial situation in
the opinion of David r. Forgan, presi-
dent of the National City bank of
Chicago, is the worst that this country
has experienced in many years. The
so-called panics of 1898 and 1907
were not so disastrous because the
reversal was neither so severe nor so
sudden. This time, he says, we fell
from the heights of seeming prosper
ity to the depths of depression almost
over night. The wave of great vol
ume, high prices and unprecedented
profits broke, and we were confronted
with an industrial panic in which buy
| ing almost ceased, cancellations of
former orders were numerous, prices
melted, and profits gave place to
losses. In the last few months of 1920
many business concerns not only lost
the profits of many preceding months,
but in some cases OF many preceding
years. Followed the passing of div:-
dends, the cutting of overhead ex-.
pense, the cessation of unfinished new
building, the discharging of employees
all of which were necessary to the
life of the particular business, but
harmful to the general situation by
curtailing the general buying power.
The industrial conditions were pre-
coded, or accompanied, by shrinkage
in the value of last years crops esti-
mated at $4,000, 900 and live stock
suffered a corresponding decline in
value. The quoted values of some
staples. such as cotton and wool, be-
came merely nominal, and the stuff
was practically unstable on a large
scale.
In former periods of depression Mr..
Forgan points out we could sell
largely to Europe and lean on her for
financial support, but now Europe
hangs like a milestone about our necks
owing us billions on which she is as
yet unable to pay the interest, and
prevented from buying freely from us
by her postwar political confusion,
her financial initiation, and the conse-
quent breakdown of her exchanges.
In q discussion of this kind, he con-
tinues, the facts must be faced. Natu-
rally, the man on the street asks how
country in the world, and who is to
blame. If he reads a labor paper he
will be told that the whole thing is a
conspiracy on the part of Capital
and particularly wall Street, to
II break the unions. If he reads the
magazine article of some professor of
political economy, he will be told that
the banks-and particularly the Fed
eral Reserve Board-are to blame for
allowing such expansion of credit and
currency that prices scared and the
inevitable crash followed. If "Wall
Street" is to blame, Mr.. Forgan says
it must have used its supposed power
as Samson used his-not only to de-
stroy his enemies but himse1f-for If
hanyone is walking the floor these
nights it is "Wall Street" where all
the business troubles of this country
come to a head; and If the bankers
are to blame, they now find them
selves partners in numerous enter
prises the condition OF which gives
them grave concern. The truth is
that no one was to blame. Parallel
conditions exist in all countries. We
end all the so-called civilized world
have been and are in the grip oil
economic forces too strong for any
class, any monetary power or any
government to avoid. The expansion
of credit. the high prices for labor
and for goods, the fictitious prosperity
; and the resulting Industrial crast
were the inevitable and unavoidable
aftermath of the costliest war in his
tory. They are all applicable by and
attributable to the workings of the
Law of Supply and Demand.
The conclusion of the writer is tina
the crisis has been passed. that the
worst is over, and that recovery. altht
slow, has begun and will be sure HI
says: "If the new administration a
Washington disposes- of our chic
problems wisely. I see no reason VIII!
the present year should not witness
return to fairly normal business. Re
vision of federal taxation, the tariff
and railroad freights are fundamental
They are too complicated to discus
here, but they must be studied ant
t settled scientifically-not politically.
S -
In discussing business conditions 70
March Roger w. Babson estimate
| that the bank clearings, building per