Norwich bulletin., 1921-12-31

A categorical yes II MT is not SUI |
fieient AS far as. supply is eoncerned- |
the largest excess stocks were OF raw
materials. Without a doubt, there was
d surplus of many lines Of finished goods.
but it did not eomrare with the over-sup
ply Of raw materials. AS q. rule, com
piete change has occurred % that at pres
ent there does not appear to be an I'M
wield1y surplus OF the more irnportan.
commodities. The federal reserve bank Of
New York computes each week the slv-
erage price Of IL basic raw materials. The
fact that the average price has remained
close to the 1918 average since June
would seem 0 indicate that t1ie liduidation
among these raw materials has been quite
thorough. The stocks of two corinodi-
les intimately connected with the largest
industries In New England-wool and
cotton-were greatly hi excess OF normal
requirements a year ago. Today there is
barely enough cotton TO provide for .
continuance of the present rate Of con-
| sumption until another crop is gathered
next summer. while there is already an
prehension over q scarcity Of desir able
grades Of wool AS a general rule tho ex-
| istent stocks Of raw materials used for
manufacturing purposes are not exces-
sive. On the other hand the stocks OF
foodstuffs such as corn, wheat and sugar
still appear TO be larger than present re-
quirernents and accordingly do not have
an upward price tendency Therefore
the farmer IS net able to ge. a larger
amount fother commodities In EXCHANGE
for given quantity OF his prodtict than
| he was a year ago--12 months without
Improvement This is an Important far
tor which must be recokoned with IN
i1s22.
The reIaive size Of the already avail
| able Stocks of materials Is but a Tempo
rary phase of the situation. How to ut
| i7ize the surplus productive Capacity of
the cosrnry is a question which will no
doubt receive attention for several years
New factories and extensions to existiur-
plants were made during the war reriod
and the two years of high prices witho1'
f, in many cases the exercise Of sound
business discretion. The immediate and
vet far-reac1ing effect Of hese is to
handicap the concerns involved with bur
| densome fixed charges and overhead ex-
! renses. minor effect Is that It gives
/ the appearance of more unemployment
than in really presen, THEREBY causing
floss of confidence.
| Demand is the complement of supply.
Demand becomes less inSistent when
Commodity prices soar too high Yet he
present demand Of the ultimate consum
er for ordinary merchandise as register.
by the volume of sales made by repre-
sentative department stores is 6uriorising-
~ large. The Christmas trade this year
from early reports was the largest In the
history Of many old and wen known con-
Germs. The broad class OF so-called
staples Is selling readily and there is
apparently no reason why hey shculd
not continue to do so. A glance at the
80
goods-goods used In further nanufac-
ture-revea1s different story Iron and
steel mills are running at less than one
half of capacity. The output of bitu.n-
nous coal is at an aIbnornally low rate.
Many COPPER mines are still closed. These
are a few instances of basic industries in
which there are no excessive stocks exise-
ent and yet which are decided quiet.
. There are several reasons for this stag
nation, but the Grief cres hinge ,on the
, price factor and plant expansion-<not as
! is often stated, entirely on the loss OF
foreign trade The trouble from plant
expansion has been previously noted. Il
will probably require several years for
the normal demands of trade to equal the
available output Of a number of our IN
dustries Meantime, there will be severe
. competition. which viii in itself tend to
4.
can be worked out only through the pass
age of time, and should continually di.
ninish.
! But the matter Of prices is more seri
Gus because it is inseparably connected
G With the question of labor costs-notins
that labor costs do not mean wages. TIL.
r relation which existed before the war be
tween wages in general and commodity
r prices has beez changed. Either thu
4 methods CT conducting industry must b,
4 altered to meet the present labor condi
+ tons, or prices ara wages must alp
i proact the old balance before business
9 can enter upon another period of sustain
: prosperity. The movement CT commodity
4 prices during the World war closely par
y alleled that of the Civil War period. L
the future price rend is to be a repetition
n Of that of 1855 1895 there should b.
= / a gradual downward movement in price
6 for several years to come. But It woul'
Z not necessarily follow that wages woulI
9 decline in purchasing power during tn
. the coming years. II, as suggested tn
: present methods of merchandising for in
. stance, are altered SO as to red11ce tn
q cast of distribution, or manufacture
processes are improved by new machin
4 cry Inventions discoveries. and cheape
4 fuel, thereby iessehing prediction costs
= VI Il 81 NliSloA AooeisSeioiA VI laDoi Jul
a put Is eliminated or moderated, I'm or
:. der to reduce labor costs, then II Wi
be entirely possible for wages to renal
high in relation to commodity prices.
1t VIII be seen from this discussio
that apparently considerable time will b
required before trade will so increase tina
it will be able to consume all of tn
| 90 DDS that the country can produce Blu
in the meantime, there will undoubtedl
be periods when the supply Of good
available at the moment is hardly sun
Client to meet the demand, and there wi
J be an increase in business activity c
more or less temporary nature. Thi
conditfon is apparently approaching, an
r it is possible that next year will be on
i Of the periods of increased business an
IS industrial activity in New England