Evening star., 1921-10-02
BY WILL P. KENNEDY.


TINE price of manufactured
goods is coming down: the
price of farm products is 60
ing up-that is one of the
conclusions reached by the joint con-
gressional committee on agricultural
inquiry, after an intensive study of the
situation covering several months.
This is also the consensus of opinion
:: of leaders in the unemployment con-
ference-that the prices of manufac-
tured articles must come down, in
order to speed up industrial activity.
Farmers. who have been paying
high prices for all they. had to buy,
while getting rock bottom prices for
, all they had to sell, have been forced
to abstain from buying agricultural
machinery and many other manufac-
tured products.
New that billion dollars addi-
tional credit has been made available
for the farmers, the argument OF
| those who are guiding the national
policy in the unemployment confer
ence is that the manufacturers by
| cutting their prices must make 1t at
traetive for the farmers, who are hall
of the entire purchasing power Of the
country, to buy manufactured proc
| ucts now. This will set an example
for more general buying and the IN
dustrial machinery OF the country
will be fully employed again directly,
| taking up part of the slack in unem-
ployment and indirectly taxing VI
the rest OF the. slack py making d.
necessary tor the big retain stores u
| nire the clerks that have been dis
| charged because the people were NO.
buying.
| Good Times Predicted
| The cycle of business readjustmen,
see ms to have swung round; the peah
OF the hard times resulting from too
easy money, speculation and spending
beyond the limit of natural credit
has passed, in the opinion of those
who have given closest study to this
great economic problem. There is
general optimism that good times are
ahead and the, psychology of getting
every one feeling optimistic and get
ting them started buying is not over
looked by those who are making the
Recommendations in the President S
national Unemployment conference.
Representative Sidney Y. Anderson,
chairman of the joint congressional
committee on agricultural inquiry
,who has been making an intensive
study of the problem for several
months, scrutinizing especially the
trelation of farmers prosperity to the
igeneral industrial welfare. explains
the general theory and line of de-
Iduction on which the conclusion has
tbeen reached that prices of manufac-
tured products must come down and
the prices Of agricultural products
must go up.
|. Effect ON Prices.
There is a general impression tina,
iloans and discounts of banks and OF
the federal reserve banks have been
very greatly reduced. While it is
true that there have been very ma
terial reductions in loans and dis
counts and smaller reductions in cur
rency these reductions have not been
lnearly so large as reductions in
lprices. They have served to reduce
Interest rates and to release funds
for production enterprises.
There is q certain relation between
deposit credit and low. currency and
fprices. This relation is not an alb
solute one. 1t is necessarily modi-
lied by economic forces of supply and
demand. The relations between de-
Iposit credits and prices is somewhat
tout of line, and assuming a gradual
Presumption of employment and de-
mand in the country. it seems likely
THAT prices that are abnormally out
,of line with money and credit will
rise to more normal relation.
In the case of agricultural products
the probabilities in this direction are
Increased by the fact that sales com.
lpelled by processes of liquidation and
low prices combined will result in
reduced acreage and production
(which should have a tendency to force
agricultural prices upward.
| If there should be no economic OF
political setback in Europe to re-
tard the resumption of normal con.