The Washington herald., 1921-05-02
COST And WAGE
LEVELS RETARD
NEWNORMALCY
Federal Reserve Report
Reveals Cause for
High Prices.
RETAIL RATES FAIL
TO TAKE DUE DROPS
Start of Better Feeling in
Business Seen by
Experts.

Unyielding retail prices. reia-
lively high cost Of coal. steel, and
other important requisites of pro-
duction, high freight rates, and the
continuing high level of wages, are
the chief factors retarding that re
turn to normalcy" which President
Harding is striving to accomplish.
This is the opinion of the Federal
Reserve Board after surveying the
financial and general business con-
ditions in the country during April.
Hope Not Realised.
The expectation that the spring
Of 1921 would usher in complete
business recovery, the board hnds
unrealized. 1t is diff1cult to forese-
when the process of readjustment
will culminate. but an improved
feeling is beginning to materiaiize
in the business world. The board
finds that wholesale prices were
more stable in April Buyers ARE
showing an increasing disposition to
regard present price levels as a sat
isfactory basis for dealings"
Wage readjustments vary accord
ing to localities, industries, ana
groups Of labor. They have been
greater among unskilied workers
and those not possessed Of a strong
trade organization, and especially in
sections OF the country whose in
dustries have felt in a peculiarly
high degree the effects Of readjust-
ment"
Price Reduction Uneyen.
Extreme unevenness of price re-
auctions is one Of the striking feat
ures Of the present financial situa-
ton. according to the board. Pre-
war prices, or something approach
ing them. exist in many lines of
wholesale. At the same time, In
other lines commodities are being
sold at twice-or even more than
twice-islS values. The same un-
evenness exists in extreme cases
between prices OF raw materials and
finished goods in the same indus
try.
In the case Of raw cotton for in
stance. both Egyptian and .Ameri-
can. the present level Is lower than
the average for 1918. Although GER
tain grades Of South American
wool are below the 1918 average.
wool prices as a whole appear to
be still about a third higher than
before the war. Finished materials
in these two lines. however. have
not been reduced as much as the
raw materials, An average OF three
leading grades of cotton goods
shows present prices to be at least
20 per cent higher than before the
war and a wooden cloth OF standard
type is now selling at Approximate
ly twice as much as in 1913
Leather Much Lower.
The discrepancy between the
prices OF raw and manufactured
goods in the hide and leather IN
dustry Is even more extreme. An
average Of leading grades of do
mestic and foreign skins shows the
present level of prices to be ap-
proximately one third under the
prewar level. Shoe prices, on the
other hand. would seem to be about
twice as high as in 1918.
Except in the case Of wheat and
rye. prices of leading cereals closely
approach prewar levels. In spite Of
this. however, the trend of the mar
ket recently has been continually
downward. Prices of livestock and
meats. on the other hand, although
at level at least 10 per cent above
prewar prices. have been showing
considerable strength during recent
months. There has. however, re
Gently been. a downward movement
In some OF the meat products.