The Rock Island Argus and daily union. (Rock Island, Ill.) 1920-1923, 1921-10-17
Frederick Haskin's Letter
Correspondence Argusl
Why Prices Stay High.

persons out of work and pnou
tight, the retailer is doing a sinai
er than normal business prt -
still pays the same rent ana ~ ~
probably has to maintain ahont .s &C
same staff. His reduction IN sIs
penses, IN word. is not in promo
ton to his reduction in businss,
That means that the cost of maj
ing each sale is higher thar !,
would be if he were doing ~.
business. II the butcher only S.
one pound of pork chops in a a.
he would have to get $40 or e.;
for it in order to break even
AS a matter of fact the prosto..
ing retailer is probably a rare Nj
just now. A few of them are ne.
haps making large profits by stict
ing to wartime prices; but ms5v
more of them are only hoping h
make expenses until better Tina,
come along.
The difficulty, explains an exper.
lies in the fact that retail prices
wages, and farmers earnings an
all on different levels. In order
that our clumsy Industrial system
may work at all, they must be an
about the same level.
Farmer Felt Drop First
When prices began to drop. ths
drop fell on the farmer first. Witt
unsold stocks of foodstuffs On hand
the buyers refused to give him
high price for what he raised But
he had to sell. So he took a low
price. Wholesaler and retailer re-
fused to follow suit. The cost N
their operations was high. chiefly
because wages remained high, and
by cooperation and Storage, both
of which the farmer lacked, they
were able to keep up their prices
to great extent.
But the farmers form about 20
per cent of the buying public. Hay-
ing very little money, this large
section of the buying public bought
very little. Manufacturer of farm
implements Immediately felt the
pinch. Their sales in many cases
fell off more than half Other
AS a result factory employees were
thrown out of work Unemploy-
ment set in. 1t affected millions.
So the buying public was still fur
ther reduced, demand declined still
more, the cost of every retailing
operation rose, and the retailer,
with his high prices. was less than
ever in a position to reduce them.
1t is a stalemate which is easy
to understand, but hard to remedy.
If bushel of potatoes would buy
pair of shoes in 1913, but it takes
two bushels of potatoes to buy a
pair of shoes now. then the pO-
tato growers can only buy half as
many shoes now as in 1913. One
result is that employees Of shOa
factories will be thrown out of jobs.
Then they can't buy any shoes.
either
Really, the farmer. if at all in
telligent, is in an enViable posi-
ton. He at least can eat It IS
only the farmer who raises moth
ing but one money crop who now
5uffers-the man who raises only
tobacco, or cotton-for example
The farmer who produces hogs and
and keeps dairy cattle
and raises potatoes and beans and
other vegetables, need go to mar
ket for very little of his food. He
is vastly better off than that e1-
5hoe-fa Glory employee, for example.
Business will never pick up IN
til the farmer once more is able
TO buy a pair of shoes with bushel
Of potatoes. That can be accom-
Dlished either by giving the farm
or more or the shoe maker less.
The diagnosis is easy, but the only
remedy SENS to be a slow pro-
cess of REIMBURSEMENT.