The Pensacola journal. (Pensacola, Fla.) 1898-1985, 1921-09-30
What's the Matter With Us,
Anyway?
81 3. N. ANDERSON. De.
Economist, the chase National Bank
New York.

1 AC 4OQL VI our lAOA04CS 40 Al E4IOpSs
and It is difficult to see how we can
United States until conditions in
much better business than we now
have, in the absence Of improvement
in Europe, as we complete our do
nestle readjustment.
During the period OF intense activ-
ity when we were shipping goods to
Europe in unprecedented volume. we
were drawing labor and capital away
from important domestic uses. We
neglected our railroads, we neglected
our public utilities, and very especial
" we neglected to keep up our hous-
ing facilities.
There Is a great volume Of deferred
reconstruction which viii create effective
demand, and might even lead to a
building boom, when wages in the
building trades and building materials
shake down to proper levels. and when
efficiency in building labor is restored.
There is real promise in the recent
decision of Judge Lands in the Chi
cago Building Trades arbitration.
Chance for Buying.
Quite as important as the question
of wages is the question of elimination
OF restrictive practices. Similarly a
great deal more can be bought by
the railroads and the public utilities
as the prices of the things they need
go down and as their financial posi-
ton is improved through a reduction
in wages and other costs.
So far we have only half completed
the industrial readjustment The in
dustries which the war expanded have
contracted again. but the industries
which the war starved have not ex-
panded as yet to take up the slack.
There are~six main resistance points
in the domestic price readjustment
They are:
ONE: Prices Of finished manufac-
lures as compared with raw materials
and farm products.
TWO: Retail prices
THREE: Wages in most lines of |
manufacturing, and very especially
wages on the railroads. in the bitumi-
nous coal fields and in the building
trades.
FOUR: Building materials.
FIVE: Steel and its products.
SIX: Railway rates on steel, build |
ing materials. and other bulky goods. /
If we could have prompt and ade- I
quate readjustment in these particu-
lars, we should speedily see much |
better business.
The Real Trouble.
The great underlying trouble is /
world maladjustment due to Europe's I
partial withdrawal from her normal
place as the worlds great center for
manufacturing.
Economic life goes smoothly when
things are produced IN right proper
ton. With the present low rate of
production in Europe, the worlds ag-
gregate production is cut down but
owing to the shortage of manufacture
ing capacity through the partial with
drawal OF Europe, there is a relative
excess production in the nom European
world of raw materials and farm
products.
Raw materials. especially. have as
a consequence been concentrated on
our American markets: and our manu-
featuring capacity, expanded though
1t was by the war, was inadequate to Il
take care Of it all. Our factoies
worked feverislly and were over
strained, wastes multiplied, and manu-
featuring. costs. rose very high.
Meanwhile, he relative excess of
raw materials and farm products led S
to violent freak in the prices Of h
these things. AS a consequence, the
buying power Of farmers and other /
producers Of 'aw materials was so
cut that they lould not afford to buy i
even the relatively scant manufacture ,
ing output at Prevailing prices. Then I
reaction and Expression reached the {
industries also.
TIE Solution. !
: The Fundamental solution is the
restoration of Europe to her. normal :
position in the worlds economy.
Europe must be helped to produce :
and must be Allowed to find markets
for her produts. A high protective
tariff, depriviTg Europe of an Amer :
lean market, would be a most serious /
handicap to TIE worlds recovery. !
Recognizing, however, the handicap
which Europe condition imposes upon
us, we must still recognize that our )
present rate t production and con-
sumption is much too low, and that :
we can look frward to very substan-
tia1 improvement in the United States
through computing our domestic re-
adjustment.