The Washington herald., 1921-03-13
Price Increases.

III the price of a given commodity
IS increased the consumers will have to
curtail their purchases of it or of some
thing else; perhaps they will distribute
the curtailment, but curtailment there
will be, whenever by either rise or
fall OF important classes Of commodi-
ties the parity of values throughout in
dustry is seriously disturbed.
For any commodity there is at
any given time a certain price which
will secure a larger net result to the
producers than any other price. That
is to say, it the price be lowered the
additional distribution will not compen-
safe for the sacrihce, and on the other
hand, if it be raised the loss OF distri-
button will exceed the gain in price
Everything that is offered for sale,
whether it be an article of goods or the
services of an individual is in competi-
tion, not only with like goods or serv-
ices, but with all the multitude of at
fractions that are appealing to every
consumer.-City National Bank.
Such statement, broad and general
in its terms, is true only to that extent
AS fact, if taken literally, as guide to
production, increase of production would
stop. 1t does not include many elements
that are constantly making the luxuries of
yesterday. the usual of today and the ne
cessities of tomorrow.
The capable business man, instead of
halting his production by the rule of his
overhead costs, including distribution, as
measured by his present market and price,
will tnd way to lower the cost of produc-
ton and distribution along with the price,
and so expand his market.
New factors constantly appearing which
rip holes in any such hard and fast state
ment are plant management, new machin-
cry, production methods, processes, reduced
transportation costs and simplihed distribu-
ton. Many time it has been believed that
automobiles have reached their production
apex. But that has not halted the expan-
sion of the industry
A far more scientific statement as to
the economic relations of supply and de-
mand was made not long ago by Mr..
Hoover, who said: There is ofttimes su-
perhcial dismissal of this subject of maxi
mum production on the assumption that
there are positive limits in production due
to oversupply. Such assumption has no
proper foundation in the broad view of in
dustry as a whole. Too much economic
thought on production has delimited its
boundaries by the immediate volume of de-
mand of given commodity. The COM
modities of service produced by the whole
nation, are capable of absorption by the
whole nation, if they are of the right char
acter."
What is needed is to find and put in
operation that productive balance which,
employing prohtably the entire population,
will by this means give the full absorption
limit of the population. Even this will
grow on both sides by the weight of their
momentum and by constant decrease in
production and distribution costs.
There is always, somewhere, market
for everything where there is proper di
versity of production. There is never in
this country any excuse for destruction or
waste of food supplies, for example Fol-
lowing the rule laid down by the City Ma
tional those who control distribution, if not
supply, not infrequently prefer to market
the smaller amount at the higher price than
the larger amount at no greater profit.
This is human nature on its not admir-
able side. 1t is not economies. 1t is fore
ing those who need, to 60 without; it is
forcing those who would buy, to but look
on while the better-off eat A like condi-
tion not infrequently comes as to other
than food commodities by individual or
group application of this rule laid down to
measure production by the immediate price
and profit. regardless of widening the mar
into price.