The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1921-04-09
BOOMS.

Millions of persons yet living prob
ably remember the boom period of
the late SOS, many of them to their
sorrow. Everybody was making mon
ey and spending it lavishly. Specula-
ton ran rampant. Property values
advanced in great strides and huge
loans were easily obtained. Then,
when about everybody seemed to have
concluded that he was on the high
road to fortune the bubble burst.
Borrowers stopped paying interest,
installment buyers Of property ceased
making payments, mortgages were
foreclosed and the property on which
they rested was knocked down to the
mortgage because there were no 9TH
er bidders, banks failed and all bust
ness was in a state of collapse.
The country has Just passed thru
a similar boom, with the difference
tended to wages. food, rents and man
ufactured articles rather than to real
estate. Neither was the crash so sud-
den, but it is none the less certain,
even tho slow.
Following the crumbling of the for
mer boom, there was the same loud
calls to the government to do some
of that situation grew the Farmers
Alliance movement. In Kansas thou
sands of farm were mortgaged to the
limit and farm products were selling
at ruinous figures. The railroads
came in for their usual share of
blame.
Relief came in the course of time,
of course, only thru work and thrift
and conservative business methods as
it must come at this time.
The people of the United States now
are passing thru one of those periodi-
cal and temporary stages of slowing
up in industrial activity which always
follow a period of great prosperity,
accompanied as such periods are by
speculation and over-trading. These
cycles of great business activity fol-
lowed by depression are the most
characteristic phenomena OF our mod
ern industrial organization. They are
the result of numerous factors and
forces, such as weather conditions
changes in monetary and banking
systems, output of the precious met
ais and above all the operation of hu
man psychology.
The intensity and duration of the
cycles differ much from generation to
generation but in all cases such cycles
are brought home to the ldividual
most directly thru changes in the
price level, investment earnings aud
profits. For this reason, the problem
is frequently spoken of as "cost of
living" problem, wages and interest
rates. When the pressure becomes
greatest there always arises a demand
on the part of the people for govern
ment action. They insist that the gov
eminent do something to put things
right.
During these periods of increasing
prices, of which the recent one has
been the most widespread, the manu-
facturers and merchants contract
heavy debts to purchase goods and
commodities which they expect to
buy on one level and sell on a higher
level, thus obtaining large profits.
The increasing price of goods begins
in time to reflect itself in increased
cost of living, higher wages and thus
generally higher level in the mar
ket. Speculation is enormously slim
ulated, credit is greatly extended and
all kinds of extravagant OUTLAWS and
expenditures are encouraged. The
fund of saved capital for productive
purposes, that is permanent invest
ment, begins in time to have a de-
creased ratio to the demand for CAPT
tai to carry on business and to pro-
vide the funds for the larger demands
of consumption. A popular demand
arises for increasing the supply of
money and credit. Complaint is made
from the wage Garner about the de-
creasing buying power of his wage;
the bond holder demonstrates against
the loss he is mcurring on his invest
ment; the business man finds interest
rates increasing and at the same time,
as he states, it takes more money to
do business. Matters proceed to a cri-
sis. The whole industrial and finan-
cial organization becomes top-heavy
and topples over.