The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1921-09-15
RIGHT PRICES.


alton, before the West Virginia
bankers association this week, d..
B. M. Anderson. economist of the
Chase National bank of New York,
emphasized the importance of the res
toration of right prices" and defined
right prices as prices which will
move goods"
THE question of right prices" said
DR.. Anderson, has been discussed too
much as if it were a moral question.
In the Middle Ages it was chiefly dis
cussed by clergymen and largely on a
theological basis. The idea that prices
are morally right or wrong, just or
unjust, is an idea which has real
meaning only~in the case of a very
narrow market, as a local retail
market, where one party to a buying
and selling contract is pretty much
at the mercy of the other. But in the
great markets, where here are many
buyers and sellers, questions of moral
right and wrong have little to do with
the matter. The question is an ecu
nomic question. Those prices are
right from the economic standpoint
which keep the industrial machinery
moving.
fright Prices,'" he continued, may
be defined as prices which will move
goods. The way to reach right prices
and to find out what right prices are
is to have flexible, competitive, two
sided market. and to let prices go up
or down in such a market until sup
ply and demand become equalized.
Then goods will move, the markets
will be cleared, new supplies will be-
called for. and business activity with
go on. If prices are held above the
point which open, two-sided compe-
tition would bring about, the tendency
is for consumption to fall off and for
stocks TO accumulate, creating a glut
If prices are artificiially set below the
level which open market conditions
would bring about the tendency is for
consumption to go too fast and for
production to be checked. leading to
a scarcity. If prices are left free
from artificial control, however, and
If sellers, as well Vas buyers, really
compete vigorously and effectively
with one another in the price-making
process, right prices can be reached
and business revival can come"
We have undoubtedly made prog
ress in the direction of right prices in
! recent months, and business revival
is consequently just that Snuch nearer.
There remain, however, six main
classes of resistance points which DR..
| Anderson enumerates as follows: =
The prices of finished manufactures
are still much too high as compared
with farm products and raw materials.
quately.
Wages are still too high by and
large, tho scaling down of agricultural
wages In the south has gone very far
and agricultural wages have yielded
greatly in some other parts Of the
country. But wages in manufacturing
industries generally, and very espe-
cially wages on the railroads, in the
bituminous coal fields and in the
building trades, are still much too
high.
Building materials are TOO high.
| Steel has not yielded adequately.
Railway rates on steel, building ma
! terials, and other bulky goods are
much too high. tho some REIMBURSEMENT
has been made.
Right railroad rates from the
! standpoint of the railroad company
| ITSELF" said the speaker, ARE rates
which will move traffic, rather than
rates which stop traffic. The Old
fashioned railway rate-makers knew
this. They made their rates, not
wholesale, but piece-meal, with ref
erence to what the traffic would bear
and found it best for the railroads
themselves to charge low rates on
bulky stuff, which would cover the
direct costs of moving the bulky goods,
together with some contribution to the
overhead expenses of the railroads,
rather than to charge much higher
rates at which the bulky goods could
not move in volume"
Regarding wages Doctor Anderson
spoke as follows:
Right wages are wages at which full
employment can be brought about. 1t
is far better that labor should have
full employment than that a part of
the labor force should be employed
part of the time at very high wage
rates. We cannot Danish moral prin-
ciples from the determination of
wages, as we can from the determine
ton of market prices of goods. But
the very best friends of labor must
appreciate that wages which are so
high as to make it impossible for en-
ployers to produce goods at prices
which the market viii pay are of no
advantage to labor. The far-sighted
business man will not be eager to re-
duce wages more than is necessary.
The far-sighted union leader will seek
&c. reconcile his followers to such wage
readjustment as is necessary to IA
cilitate business revival. knowing we'll
that q greatly prolonged depression
would lead to disastrous breaks in
wage standards.
- -
, Secretary DENLY, of the navy de-