davidaulloa/AmericanStories huggingface dataset:
New-York tribune., 1921-12-18

RUSSIA, rich In natural resources
and abounding with man-power, lies
prostrated as result Of both internal
and external circumstances and is now
practically eliminated from the ranks
of producing countries. The worst has
already happened in her case; starva-
tion and industrial decay are her pres
ent lot. Germany, on the other hand,
emerging from the war far poorer in
resources than in 1914, is now show
ing increasing industrial activity. Her
mark is declining rapidly, her finances
arc growing more and more desperate,
the burdens that generations of Ger
man citizens will have to hear are
enormous, the whole future is dismal
and uncertain; yet, despite all these
circumstances, she is producing on a
larger and larger scale and exhibiting
all outward signs of a prosperous in
dustrial nation. AS of October /, the
labor unions, with 100000 members,
reported only thirteen in thousand
unemployed, which is below the 'pre-
war average for boom years. How can
these conflicting forces be reconciled,
and do these symptoms point to a
return of health, or are they the
precursors of relapse of serious
consequence
Before attempting to answer these
queries let us review briefly the series
of financial events in recent years, for
in this period are to be found the
germs that are responsible for Ger
many's present ailment. Before the
war Germany had been constantly aug
menting her Indebtedness, owing to
heavy military expenditures, and in the
ten years preceding 1914 deficits in the
net budget were a not infrequent oc-
currence, but the country was making
rapid industrial progress, which served
to lower the burden in relation to
capacity for payment rather than to
enhance it. The total debt was about
five billion marks. Had no war been
declared material part of the cumu-
lative deficits would have been wiped
out by property tax which was en-
acted into law some time in 1918. The
floating debt was less than 10 per cent
of the total
New-York tribune., 1921-12-18
Profits Into Losses

The banks call halt OH the out
standing volume of loans and so de-
prlved the business man of the means
OF conducting business. This reduces
the demand for commodities and Sc
curlties and SO reduces prices. This
turns profits into losses and makes il
harder for the business men to pay
their debts; and the harder it is to
pay the more the banks press for paw
ment, again taking away the business
mans means to conduct his business,
again reducing prices, aggravating
debt, and so on, in a vicious circle.
The results are losses. "frozen loans"
and bankruptcies. Thus .frozen loans"
SO much disliked by the bankers in
divldualiy are, to large extent, due
to their own collective epolicv Of de-
fation.
believe that banking policies have
6iundered during the last year or two
by thinking too much of rectifying the
banking situation and by thinking too too,
little OF the effect of their Npolcy on
the general price level. Some restric-
tlon OF credit was of course necessary,
put the policy of restriction should
itself have been carefully restricted.
The aim should have been, not to com
pei general liquidation, but rather to
prevent 1T, and not to compel gem
eral fall of prices but rather to pre-
vent any further rise in prices.
In short, once the price level had
reached the height of 1920, to have it
fall again, far below that level. was a
dlsatser. But, earlier still, the price
ought to have been prevented from
reaching the height of 1920. At the
time of the armistice the fatal error
was made of pursuing an easy money
policy, not because the market con-
ditions favored easy money, but, arbi-
trarily, with the idea of helping bust
ness! Had this error been avoided
there would have been no overexpan-
sion, and the problem of restricting
credit, which finally confronted the
bankers In 1917, would never have oc-
CURED.
This easy money policy ENCOURAGED
The expansion of loans and buying
power, with consequent further rise
Of prices, which, in turn, led to a
further expansion of loans, and so to
further rise of prices in vicious
circle. The curbing of loans, which
was practised drastically in 1920,
ought to have been practised in mod
Grafton in 1913, through an increase in
the rate of discount. The rates of dis
naturally kept down for over year
were then raised, but it was too late.
We have characterized both errors as
errors of delay, of locking the door
after the horse was stolen. First we
delayed too long the rise in the rate of
interest and the consequent restriction
of loans, and then we delayed too long
the fall in the rate of interest and the
easing of loans. Both policies were
pursued with the best of Intentions,
but these good intentions have paved
the road to the place where we are
New-York tribune., 1921-12-18

competitors, and by virtue of this fact.
she would be able to flood the whole
world, were she to have her own way.
The declining course of the mark has
been encouraging her export trade, but
has been haveing booerang effect
on her importations. Obviously when
an American importer of German
wares agrees to pay within three
months, say a million marks now
quoted at 1 cent, and at the end Of
three months finds that he has to pay
of one-half cent each, there can be no
other outcome than that trade will
receive decided impetus. On the
other hand, as the mark continues to
decline, the iporter of foreign raw
aterials in Germany begins to make
less and less purchases abroad because
his costs are constantly mounting.
This desperate situation might per-
haps have been greatly reprieved were
Germany to turn her attention more
and more to those articles in the manu-
facture of which she enjoys an obvious
advantage, i. e., exported articles
which are manufactured from raw ma
terials os domestic origin, and thus
gradually more than counterbalance
the loss in the import trade. The un-
derlying assumption is, however, that
the external and internal values of the
mark will continue in the same rela-
tionship, but many things point to an
opposite tendency. Gradually this dis
parity is growing narrower and mar
rover. The government has already
curtailed the subsidies on food, trans
portation rates have been increased
and enhanced labor costs in terms of
actual purchasing power now begin to
menace Germany'S supremacy.
New-York tribune., 1921-12-18
Number of Government
Employees One Handicap; Debt Re-
pudiation Suggested as Course
By l.. R. Gottlieb

Copyright, 1884, by Bankers Economic Service, Inc.
is almost that the worlds
the rehabilitation of the central
particularly Germany Russia. period
latter two countries participated
and had not the interviewed but fair
would have been Germanys efficiency
the me which than noter
Russias absorbing producing potenas
tries exhausted
financially speaking although the
are divergent and somewhat conflicting
New-York tribune., 1921-12-18
Fall Of the Mark

IN other words, the present indus
trial activity of Germany is largely
the outcome of artificial circumstances
occasioned by the fall of the mark, but
IS is what has rightly been termed a
",catastrophe' boom. 1t is a period of
nlgh production, which bids fair to be
alSplaced as soon as a semblance of
balance is effected between the internal
and external values of the mark. Ger
many Is not developing permanent mar
kets by and large; she is being invaded
by bargain hunters, who are taking
advantage of the temporary exigency.
There is no healthy recovery of busi-
ness volume. 1t is purely ephemeral,
hy-by-night prosperity The import
tax OF 26 per cent, payable to- the Al
lies under the reparations agreement.
presupposes that the German exporter
VIII have to obtain this excess in for
eign markets and this, coupled with
hlgh internal taxes, will also help to
reduce the margin of advantage CON
siderably. Native efficiency of pre-war
barriers such as tariffs and embargoes
IN view OF the anticipated decline
IN imports into Germany, i. e., in ex-
ports from foreign countries to Ger
many, as result of the marks de-
cline, the problem is an especially i'm
portant one to the United States. Dur
ing the current year Germany is found
to be the only bright spot on our trade
ledger. With the single exception of
Mexico, she is the only country to
which we have sent goods of greater
value than in 1920. Furthermore, it
IS not only her exports to and i'm
taken into considera ton, but also her
foreign trade with other countries. for
If she cannot buy from and sell to
other countries, her commerce with the
United States will be disastrously af-
fected Her purchasing capacity in
this coutry varies directly with her
world commerce.
What may be suggested as the way
out of these difficulties? Before at
tempting to give an answer to this
question, it must be realized from the
outset that the German fiscal situation
appears to be virtually out of control
under present conditions. A balancing
of the government budget seems we'll
Hermes recently stated before the
Reichstag that, despite the heavy taxa
ton programme, the deficit for 1921
will approximate 10 billion marks, of
which fifty-three billions will be on
account Of reparations liabilities. This
estimate is however, too optimistic,
inasmuch as it is based on the mark
having deprecated to one-twelfth of
par, Whereas up to the present writ
ing, it has declined to less than one
sixtieth Of its normal value. Mean
while, the cost of living rose to 1,146
at the end of October, as compared
with the low of $50 in spring. and the
government has been compelled to raise
the salaries of employees, which will
add eight billions more to the budget
ary deficit. Thus the circle of imitation
cOntin,1oc +o ravolvo
New-York tribune., 1921-12-18
An UnpardonabIe Sin

To upset the price level is a great
public disservice, far more unpardon-
able sin than to "ocrner" or spoil the
market for a single commodity.
would, therefore, make as strong as
can this plea for prompt adjustment
Of the interest rate. The idea of a So
called stable interest rate on behalf Of
business is delusion and a snare, for
as Ion gas the price level varies the
actual rate of interest really varies.
even if the nominal rate does not The
rate of interest should not be artif-
cially fixed, but should yield to supply
readily than, any other price. The sta
bility needed is, first of ALL in the price
level. If that be stable, the real in
terest burden will itself fuctuate less
than if we seek to fix it's nominal
figure.
The adjustment of the rate of inter-
est should be full enough not to need
eking out by discrimination in loans
Except under extraordinary conditions
such as those of the Great War). AS
long as a business is legitimate it
ought to be able to obtain on adequate
security or guarantees all the loan ac-
commodations it desires at a price.
The only limit to mans credit should
antics which he can offer and the limit
set by the price or rate of interest
which he has to pay. The adjustment
of the rate of interest shculd equalze
the supply and demand without any
need for the banker to apportion or
ration credit l believe the business
world to-day is badly victimized by err
roneous and obsolete ideas as to inter-
est, ideas which are the heritage of
the ignorance and bigotry of the Mid
die Ages, ideas which have created an
age-long prejudice against the institu-
tisn of interest and efforts of all kinds
to restrict it's free play. Freedom in
the loan market would have freed US to
very large extent from the false
prosperity of 1910 and 1920 and the
needless depression OF 1920 and 1921
With this double object lesson 50
clearly before us we ought to find b
way of escape from such disasters in
the future. We ought to fight infla-
tionism now just as we ought to have
fought defationism year ago. If am
not mistaken we are confronted with
the peril of precisely these same two
disasters in the years Immediately
ahead. Unless something fairly definite
is done to prevent it, it would seem as
though the next movement of the price
level would be upward and that for the
next two or three years we shall see. in
growing strength, secondary period
of imitation. Then again we shall prob
ably lock the door after the horse is
stolen, again restrict credit and again
jerk the price level down.
Foreign Exchange Upset
L
New-York tribune., 1921-12-18
Kinnard Castle Burned;
Built in 18th Century

BRECH1N, Scotland, Nov. 20 (By
Mail).-Kinnaird Castle, home of Lord
southesk. which was recently de-
stroyed by fire, was an historic four
teenth century structure and one of
the. finest examples of medieval gothic
and Italian architecture in Great
Britain.
There was famous picture gallery
Of ITO old masters, many of which
were burned. The library, only a
small part of which has been saved,
consisted OF 10000 volumes, comprising
costly missals and some very yaluahje
early Shakespeare editions. Some Of
the furniture destroyed dated from the
eaEly Scottish kings. The loss s esti-
mated at 81 100000.
New-York tribune., 1921-12-18

emphasis not only on account of it's
.ranscendent Importance, but because
Of its comparative neglect. The evils
se all the greater because misinter-
preted.
Few people seem to realize, for in
stance, that the present throes of busi-
ness are due to the recent convulsions
il the price level, and tha. former
crisis and cycles. with their alternat-
ing curses of rising cost OF living and
depressions Of trade, are traceable to
tho same subtle cause.
After the Civi, War and up to 1896.
when prices in general were falling. the
farmer and merchant were complaining
that their profits were being cut down
or entirely wiped out; for, while manv
Of their charges remained relatively
fixed, such as interest, rent, salaries.
etc, the prices at which they sold kept
falling. On the other hand, the silent
partner, the bondholder, the endowed
churches, hospitals and universities
fattened on these falling prices. Their
incomes were fixed in terms of dollars.
but each dollar brought more of what
the farmer or merchant was selling.
Hence, in the famous Bryan campaign
of 1896 the raucous cries of "bloated,"
"bondholders" and "deadhand" fast
coming to Gown the earth" Business
was depressed, bankruptcies were COM
mon and many business men were dis
possessed through foreclosure and
their business put into less skilled
hands. not through any fault of man
sgement, but through the fault of the
dollar Unemployment was rampant
and "Coxey's army" of the unemployed
seemed for a time to be real menace.
There arose bitter feeling between
the Debtor West and the Creditor East.
with constant growth of so-called
"populism. This might be described
as a species of socialism demanding
government loans at low rates of in
terest, such as l per cent. All of these
conditions formed a fertile soil, out
of which the dangerous silver agitation
grew, which for time threatened us
with remedy worse than the disease.
New-York tribune., 1921-12-18
New Methods
Used to Coax
Slow Spenders
Retail Merchandising Under
goes Vast Change, Says
Sales Promoter After
a Tour of the Stores
Must Educate Consumer
Industrial Exhibit Brings
Good Business to Town Suf-
fering From Depression

THE old methods of retail
merchandising are being SUI
perceded gradually but sure
ly by new methods, which have as
their principal objective the educa-
tlon OF the consumer. This, in ef-
feet, is the idea brought back by
Mrs. Flora Hoffman, director of
sales promotion for the Derryvale
Linen Company, from an extensive
tour of investigation in retail stores
throughout the Middle West. In her
tour she covered fourteen of the
principal cities in New York, Ohio,
Indiana, Iowa and other states.
I'm general" she said, 81 found re-
TAI business below normal. The stua-
uon that exists now is one in which
consumers must be tempted to buy. The
merchants that are doing the tempting
IN constructive way are getting the
business. But the old methods Of en-
uclng the elusive dollar from the con-
sumers bocketbook, no longer have
their former potency The retailer who
is merely shopkeeper, who buys his
goods, puts price on them and places
them on his shelves, is not getting
much business | found that sales have
to be stimulated. In stores where the
stimulation was applied to one or a
lew departments, those departments
went ahead, while the others Jagged
behind,
New-York tribune., 1921-12-18

poor, but thrift becomes undesirable
when the reward of thrift is snatched
away as fast as it accrues.
And contrariwisc, when prices are
falling what strangling millstonc
about the neck of business does the
rate of interest then become For
then 1T is added to the rate of appre-
citation of money.
And thus it is that the change in the
purchasing power Of money shows up
as the most important factor in an in
v.estment. 1t destroys the safety of
the safest investment, robbing first
one type of investor and then the
other. For loans beginning and ending
in the last year, business has virtually
had to pay SO per cent interest This
is the shoe that. pinches when prices
New-York tribune., 1921-12-18
Bought the Goods

"This merchant hooked up his ex-
hibit with the public schools, clubs,
etc, and various classes, with their
teachers, came to see the exhibits. He
was really teaching the people, and
they bought the goods about which
they were taught something. That is
the trend of retail merchandising at
present, and it is up to the retailers as
we'll as the manufacturers and whole
salers to help this trend along The
public is beginning to know more about
merchandise, where and how it is made,
the differences in quality, the trend of
that formerly were considered only the
rightful knowledge of those in the
trade. The merchant who helps the
public to greater knowledge of the
merchandise he is selling will sell
more goods.
"This Akron merchant also put
across a neat stunt in capitalizing the
traffic that passed his windows In one
window he had background of an old
rail fence with shocks of wheat, corn
and several pumpkins scattered about.
On this fence sat an old farmer, slowly
turning over series of cards which
told where certain exhibits were to be
found in the store. That mmediately
aroused the desire of passers-by to
view these exhibits, and brought them
into the store"
In each of tho cities visited by Mrs.
Hoffman a Derryvalc linen style show
was produced in one of the stores This
show included tables correctly set for
various occasions, from directions Of
famous maitres d'hotel; drapery linens
and household linens. give years ago."
she said, sit would have been almost
impossible to interest merchants in a
manfacutrer's exhibit of this kind.
Now, however, they welcome it."
This is just one of the indications of
the new methods that are creeping into
the retail field, which are slowly chang
ing the trade.
New-York tribune., 1921-12-18
Turn of Tide

The tide of prices turned in 1896 and
1897, following which, after few
years, came an era of false prosperity
eliminating in the crisis of 1907 after
which the process began anew, like
wise interrupted by the depression of
1918, and again, and almost disas-
trously, by the present greater de-
preston beginning in 1920.
During the entire period, covering
the years elapsed in the twentieth CEN
tury. there were complaints over the
high cost of living, remembered by us
all The discomfort and indignation l e.
suited in bloodshed and food riots
all over the world. Though wages
went up somewhat, they Jagged be-
hind prices as they always do In
real wages there was a loss-about
cne-third during the decade between
1907 and 1917, the year America en-
tered the war, and further reduc
tion during the war. The salaried man
Jared even worse. Teachers salaries
for instance showed an increase of As
per cent from 1915 to 1920, but the
cost of living, as Indicated by the re-
eoii prices Ol lOCt, iuCIcesScu
over 100 per cent. Speculation for
the rise was bold, widespread and
profitable during these two decades of
rising prices and it developed an en-
tireIy new class of rich men to replace
The old-the conservative bond-holding
class. These bondholding gentry could
not keep up their old magnificence at
the reduced buying power of their
liked" incomes and were forced to
sell their palaces to the new favor
ties of fortune These were the pro-
mcters and the plungers in the stock
and commodity markets. Ostentation
nouveau richie was much in evil
dence.
Class jealousy was infamed. The
T. W. W." or International Workers
of the World, became threatening and
lawless group, practicing sabotage on
a large scale. The large profits at
sher's expense produced by the rising
Price level Cor depreciating dollar) gave
rise to the nickname of "profiteer."
strikes were common and costly So
eaalism thrived.
There is scarcely a nook or Granny
IN human life which has not been
touched and transformed in some de-
zee by this hidden, powerful factor,
inc huctuation in the purchasing power
q money. 1t turns the contracts of
condholders and stockholders into
S&me Of heads and tails. 1t makes
gamble of every contract
New-York tribune., 1921-12-18
Foreign, Exchange Upset

Confusion will be made worse con-
founded by the .upset in foreign trade
and exchange made by the German rep,
New-York tribune., 1921-12-18
Psychology OF Situation

Psychology has much to do with the
present condition. Every one is cutting
down on expenditures as much as pos
sible. Take the average man as an ex-
ample. If he has half way decent
cvercoat' he will try to make it do this
winter. However, if his favorite shop
puts on a real sale and brings new
overcoats to his attention at price
that comes within his purchasing range,
he will be tempted to buy. 1t is the
overcoming of this point of resistance
that is enabling some retailers to go
ahead in spite of the general depres-
sion.
"The best example of this I found in
Akron, 0. Akron, as you know, suf-
fered as much as if not more than any
city in the country when the slump
hit the rubber tire trade. Population
dwindled from more than 225,000 to
felt this keenly. While | was in Akron
one Of the enterprising department
store sthere ran a merchandise fair.
Educational exhibits were scattered all
aver the store. Included among them
was a rug weaving loom in action, ac-
tual cooking demonstration in the
stove department, real kiln iring
pottery and a host cf other displays
which showed exactly how things were
made. We had a booth in the store
showing the various processes OF linen
manufacture and other features. ..
con the first day only a small crowd
responded. On the second day the
crowd was larger and on the third day
the crowd assumed the PROPORTIONS of
good old time am 1t took me a
half hour to work my way from the
front door to the elevator, a distance
of less than 100 feet so thick was the
crowd attempting to get to the various
exhibits, Business was splendid. /
visited other stores in the town and
they were doing an exceedingly small
business, with their aisles almost de-