New-York tribune., 1921-02-06

influences tending to halt or a sta
bIllZatlon Of price changes are coming
into effect, or even are in prospect. All
speculative markets manifest this
swing against-swing quality. Because
OF this speculative principle there was
no way of preventing a reaction from
imitation but to keep up the imitation.
But this policy public opinion had be
come intelligent enough TO interdict.
have been trying to tie up the
theory Of the turnover Of money and
ITS relations to the turnover of goods
with the general question of the move
mcnts Of prices during the period Of
boom, during the time of reaction and
sag, and during the prospective period
Of the upward swing. | have been en-
phaszing the fact that. with stable re-
latlons between the oncoming supplies
Of products to be exchanged and the
volume Of media for their exchanging,
there is no, truth in the attempt to ex-
plain the movements of prices either
by turnover of money more rapid
than that Of goods, or by turnover
of goods less rapid than that of money,
or by any sort of diverging tendencies
IN the relative turnovcrs. But this is
not TO deny that the attitude of hold
ers of money toward spending it or the
attitude of holders of goods toward
letting them go against money, may
have much to say about the movements
of prices,
Nor is it to to deny that a movement
Of prices once in progress may greatly
react on these attitudes and disposi-
tions. On what terms the turnover Of
money takes place as against the turn
over of goods may depend on whether
the holders of money are keen enough
70 n - l,,
say, to outbid other competing offers
or to persuade the holders Of goods to
let them go. 1t is not precisely ques-
ton at any particular time Of how
much money there is in existence at
that time, but of how much of what
there is held with the disposition to
buy goods promptly, and with what sort
of disposition toward the amount of
payment.
When an individual, having once
traded himself into the possession of
some media, is not now disposed TO buy
with it but to hold and wait, his atti-
tude is one tending to depress prices.
Goods get offered against a money de-
mand restricted by just this much. If
similar attitude is widespread--the
retardatlon OF purchasing power great
an unusual share of the media frozen
hlOI4Sy, VI inactive DanK deposits
prices are falling, margins are dimin-
ishing, and production, in face of the
narrowing margins, is slowing down or
suspending.
Rising or falling prices are in this
case merely question of which side
has to make the concessions in order to
get the trades through; a problem of
with whom, buyer or seller, is the in
itlatlve of pressure-whether it is
sellers or a buyers market Money is
good only to buy things with But is
1t good to buy things with now or
later? When the prevailing attitude is
one of preferring selling now and buy
ing some weeks hence, the sellers have
hard time, the producing enterprises
worse time, and the employees the
worst of all; and what buyers there
are get concessions. But when these
deferred demands come finally in to
swell the later buyers chorus the sell
ers will be having the best of it, with
buyers hurrying, at advancing prices
And, clearly, these retardations and ac-
celerations of trade may take place
under conditions of media constant in
volume and of goods constant in their
rate of output.