The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1921-10-19
TOPEKA STATE JOURNAL
Information Bureau
FREDERIC j. HAsKIN. Director.
Washington, D. @.
WHY PRICEs STAY HIGH.

demands an editor out in the corn belt,
docs the retailer charge from 35 to
40 cents a pound for pork chops when
hogs cost him only. or 7 cents?'
He is one of a chorus singing diff
ferent words to the same tune. A
man down in oklahoma wants to know
why he cannot tote enough hides
across the street on his back to buy
pair of shoes. A man in Georgia
wants to know why cotton enough to
make a tent won't buy an undershirt.
And a farmer in Maryland asks why
apples, such as he fed to his hogs be-
cause it would not pay to haul them
to market, sell for cents each on the
fruit stands.
All of these questions have been
asked many times. They have also
been loudly answered with the asser-
ton that retail prices are too high,
which is of course merely begging the
question. Sometimes it is added that
the retailer is a profiteer, which is
generally not true and certainly sheds
no light on the situation.
When the editors query was laid
before certain marketing experts in
the government service, it was learned
that the question is a good deal more
complicated than those who blame
the retailer and let it go at that, ever
imagined. The department of agricul-
ture is making a study of the retail
nrfces of farm products in all of the
principal American cities. 1t is going
to find out just why these prices are
so inordinately high and why the
farnertgets such a small share OF the
large price that the consumer pays
do not care to
be quoted, nor to make any extensive
comment until this investigation has
been completed But in the meantime
they throw out few hints
In the first place, they say. don't be
too quick to blame the retailer Re
tail prices probably are too high, but
they are not as much too high as you
think The retailer has been facing
dull market for a long time now. HIS
great need is to turn over his stock
1t is extremely probable that he would
reduce prices if he could afford to do
So in order to stimulate trade. In
many cases, of course, he has done so.
The papers are full of bargain sale
advertisements. Yet the average of
retail prices remains high.
Cost of Retailing High.
This, say the experts. is partly be-
cause the cost of retailing as a bust
ness operation, is high. Out of the 35
cents that you pay for pork chops,
the retailer must pay, not only the
price of the pork at wholesale, but
also the rent of his store, the cost of
the ice on which he kept the pork,
the wages of the man who cut it and
sold it to you, the paper in which it
was wrapped. and the upkeep of the
vehicle in which it was delivered.
The experts do not seem to know
exactly what percentage Of the cost
of those pork chops is represented by
each of these elem, nts in its transfer.
That is probably one of the things
their investigation will reveal. But
they think that the price paid for the
pork is less than half of the total cost
of getting it from wholesaler to con-
sumner. And all of these factors in
ME operation have risen in cost.
Rent, wages, ice, paper, gasoline-no
one needs to be told that all of these
things are from 10 to 100 per cent
higher than they were in 1913.
Remember too, that with many
persons out of work and money tight,
the retailer is doing a smaller than
normal business. But he still pays
the same rent and he probably has to
maintain about the same staff. His
reduction in expenses, in word, is
not in proportion to his reduction in
business. That means that the cost
of making each sale is higher than it
would be if he were doing a big bust
ness. If the butcher only sold one
pound of pork chops in a day, he
would have to get $40 or SIS for it in
order to break even.
AS a matter of fa ct the profittering
retailer is probably a rare bird just
now. A few of them are perhaps
making large profits by sticking to
wartime prices; but many more of
them are only hoping to make ex-
penSeS until better times come along.
The difficulty, explains an expert,
lies in the fact that retail prices,
wages, and farmers earnings are all
on different levels. In order that our
clumsy industrial system may work at
all, they must be on about the same
level.
Farmer Felt Drop First.
When prices began to drop, the drop
fell on the farmer first. With unsold
stocks of foodstuffs on hand, the buy
ers refused to give him a high price
sell. So he took a low price. Whole
saler and retailer refused to follow
suit. The cost of their operations
was high. chiefly because wages re-
manned high. and b. cooperation and
storage, both of which the farmer
lacked, they were able to keep up
their prices to a G. eat extent.
But the farmers form about 40 per
cent of the buying public, Having
very little money, this large section of
the buying public bought very little.
Manufacturers of farm implements
Immediately felt the pinch. Their
sales in many cases fell off more than
half. Other manufacturing lines also
felt it. AS a result IA ctory employees
were thrown out of work. Unemploy-
ment set in. 1t affected millions. So
the buying public was still further re-
duced, demand declined still more, the
cost of every retailing operation rose,
and the retailer with his high prices
was less than ever in a position to
reduce them.
1t is a stalemate which is easy to
understand, but hard to remedy. If
a bushel of potatoes would buy pair
of shoes in 1913, but it takes two
bushels of potatoes to buy a pair of
shoes now, then the potato growers
can only buy half as many shoes now
as in 1913. One result is that en-
ployes of shoe factories will be thrown
out of jobs. Then they can't buy any
shoes either.