New Britain herald., 1921-05-04
Lower Levels FOR
PRICES INEVITABLE
Nothing Can Stop Graded Re-
adjustment, Banker Says

Pinehurst, n. c.. May 4.-Neither
money, transportation costs. taxation
nor labor can effectively or perma-
nently avoid the irresistible forces that
are working toward readjustment on
lower level, John S. Drum. San Fran
cisco, president of the American
Bankers association, declared in
survey Of the economic situation in
the United States submitted to the
associations executive council here
today.
NJ. Drums statement was based on
more than 1000 replies to question
naire sent by the association to bank
ers. heads OF transportation compan-
les and other business, leaders asking
for authoritative opinions as to finan-
cial. commercial. industrial and agri-
cultural conditions in the nation.
All elements in the nations eco
nomic life must fall into line in the
process of readjustment, the report
said -#
1T would work to the disadvantage
OF factors that would, IL they could,
keep out of line with the rest 1t
added. THE weight of opinion is
that this tendency toward stabiliza-
ton will not be accomplished in the
Scoi VI ehe Two years thal ie JUST
ahead of u.s."
The process of readjustment must
be gradual" Mr.. Drum said. First,
one element. then another, feels the
operation of the memorable forces
that are working to restore normal
conditions." .
Common sense. and a knowledge OF
fact, with clear vision, Mr.. Drum de-
clared, must guide the nation in its
struggle to solve the broad economic
problems that have grown out of the
war and the peace. ",-0
"Our survey has shown that the
great economic problems fall into two
classes which may be expressed in
terms of the problems of production
and those OF costs and markets." the
survey said.
Discussing labor, the survey said
wages did not rise as rapidly as COM
modify prices during the war and the
imitation period and their general
tendency will be the last to fall with
reimbursement. Wage reductions have
been accepted in many industries, but
not in the building trades and among
railway employees. Mr.. Drum said.
The effect of this resistance to tho
economic laws working toward stag
nation il apparent in comparative
stagnation in most parts of the coun-
try in all except essential building
construction and in the great decrease
in railway traffic because of high rates
caused by operating costs" he added.
Under the heading of Materials
the survey said they were the first OF
the elements to feel the upward i'm
pulse when the war came and al
ready were the first to respond toward
a new lower level
Touching on the railroad situation,
Mr. Drum declared rate increases al
n time when other services and COM
modities were falling, had disas-
trous influence on the nations busl-
ness The so-called liquidation of Ia
Dor has been perhaps the principai
cause of these strangling freight rates.
The survey showed there Is dis
content with systems of taxanon
which Mr. Drum said never were Just
i'm principle nor scientific in method
of collection. There is virtually
unanimous opposition to the excess
profits tax. Majority sentiment favors
a sales tax to replace the excess
profits tax.
Answers to the missionaries, Mr.
Drum said, showed there is reasoned
opposition to cancellation or the
Allied debts to U. s., based
chiefly on the argument that can
collation. would greatly increase tax
alton in this country.
Despite a buyers strike. many re-
tailers were unwilling to take their
losses and sell for lower prices, MI
Drum said, in discussing domestc
markets. This condition has changed
and now many retailers are marking
down prices to a basis of present
costs.
Cancellations of orders followed re-
duced sales and, as a result there are
now great quantities of all kinds or
manufactured goods for which there
is no demand, lying in the hands of
manufacturers.
Opinions indicate that the decline
in domestic markets to great extent
has been caused by, and is refiec-
ton of, an even moro serious fail in
foreign demand for American goods.
I'VE must help tho countries OF the
world financially" Mr.. Drum said.
$50 they can become customers by
using our raw materials and our
manufactured goods in such quanti-
ties as will keep American capital and
American labor and American natur-
nj resources employed to their full
capacity. We must become a nation
OF foreign Traders
The bankers of the nation, Mr..
Drum concluded, must take the
leadership.