The Pensacola journal. (Pensacola, Fla.) 1898-1985, 1921-03-21
FUNDAMENTAL LAWS.

The fundamental law of supply and
demand has been permitted to work out
a satisfactory solution to the problem of
business conditions in some industries
and commodities. Where these laws
have been permitted to operate readjust-
ments have advanced with satisfactory
progress and a brighter outlook is ahead.
The big question in almost every indus
try is, however, when are the wages OF
the factory workers, coal miners and
railway employees going to become equa-
lized with the income of the farmers?
Discussing the question of supply and
demand, as related to certain commodi-
ties the Alexander Hamilton Institute
says:
Pennsylvania oil has dropped from
$6.10 to $500 barrel and Oklahoma oil
from S3,50 TO S1.75. Average steel prices.
which rose from $32 before the war to
around SIS. ton last year are now
down to about $50 ton, The L. S. Steel
Corporation, which did not advance prices
last year above SEA a ton on the average.
secured so much more business than the
independents that II can continue to
operate a few months longer before
making a general reduction in wages
and prices. Its stabilizing policy has
been of great benefit both TO its en-
ployes and IT'S customers. The latter
have been able to go ahead with enter
ted IL the corporation had attempted to
charge top prices.
In view OF the wisdom il has shown, it
is regrettable that the Comptroller of
the Currency has INDUCED in irrespon-
sible criticism of Judge Gary's price
policy. The Comptroller also stated that
the profits of the Steel Corporation have
been 'unconscionable." But the Cor
poration paid only a IS dividend last
year on stock which represents an ac-
tual cash investment of over $3.50 per
share. And in a money market where
the prevailing rate of interest has been
eight percent, a normal return TO the
stockholders should have been eight per-
cent on $3.50, or a dividend OF $50 per
share. The interests OF the stockholders
have been subordinated to the welfare
OF the public. for with the money held
back from the stockholders the corpora
ton has been able to extend credit lib
orally to the consumer 10 the benefit OF
the country.
Similarly, the action of the attorney
general in approving the prosecution OF
the Southern Pine association for al
legged fixing OF yellow pine prices is
based on ignorance Of the facts Every
well-informed business man knows that
lumber prices have merely followed the
trend OF the business cycle, rising last
year because consumers kept bidding
higher and higher prices and declining
60 percent during the past 10 months
as the demand fell off. The lumber
mills have been powerless TO maintain
high prices in recent months and were
unable to prevent high prices last year
in the presence of keen competition both
among producers and consumers I'm the
face of condition of decreased produc-
tive capacity forced on the industry by
the war.
The recent reduction OF 20 percent in
steel wages among several Independents
viii no doubt be followed by the U. S.
Steel Corporation as soon as conditions
warrant. Tor the time being there is
little incentive for Judge Gary 10 reduce
wages for there is little business to get
by reducing prices. The Independents
are more than able to supply whatever
demand exists for steel products and
have secured little business by quoting
$40 ton below the Steel CORPORATION
There is a good deal Of negotiation re-
garding future commitments, but IL is
yet difficult to estimate minimum costs
~f coke iron and labor with ALI Of them
In state OF flux. Basic iron NAY drop