The Redwood gazette. [volume] (Redwood Falls, Minn.) 1873-1940, 1922-05-17


"There never was time in the commercial
history of the United States when 1T was SO urg-
ent that we business people get together ana us
cuss business conditions thoroughly and carefully.
We have got to learn to do business To-Day on an
entirely different basis than for the past quarter
of a century; and for another quarter OF cen
tury to come we will have to do business upon
this new basis.
Colonel Ayres, the government statisticlan
who founded the statistical department for the
American Expeditionary Force over in France
and them came back to Washington and investl-
gated price figures running back more than cen
fury, has prepared very interesting chart winch
shows US that the extreme peak Of high prices
over which we have just passed is nothing new
in the history of our country We have heard
people talking as if this last burden of high prices
were something absolutely unparalleled In the
history of this country while it has happened
precisely three times the way. Three times,
prices have gone up $50 percent above the start
ing point. The first time, after slow and steady
climb of thirty years, that peak was reached IN
1872. The war Of 1872 accelerated the climb OF
high prices so much that they toppled over and
started down. Then for twenty-five or thirty
years that downward path continued until the
bottom of the valley was reached. Once more
prices started slowly to climb until after quarter
of century the war of 186l-1864 accelerated the
prices and toppled them over Again they start
ed downward and kept going down for period OF
twenty-five years when once more they started up
for twenty-five or thirty years until the great
war accelerated them enormously and again they
toppled over and started down.
Commercial history repeats itself. We
have started down path which will keep on go
ing for twenty-five years and those who say that
we may expect a return to wartime prices or
expect the bottom of the valley to be reached
within few months are misguided optimists and
speak certainly without intelligent knowledge
of the facts of history revealed to us by in
vestigation of the commercial history of this
country. Don't think for one minute that the
,o+ houo Ioco limo nYIc
market for the next quarter of century and
that it may be at least fifty years before prices
return to $50 percent above the valley level,
means that we are going to have hard times for
at least twenty-five years.
"Prosperity and high prices have nothing in
common. If high prices meant prosperity, which
would be the most prosperous country in the
world today? 1t would cost you 100000 rubles
today to buy suit in Russia. 1t would cost you
1000 rubles to send first class letter. If high
prices meant prosperity, obviously country
having prices which have reached such high levels
would be the most prosperous IN the world. IN
realty, of course, high prices have nothing to do
with prosperity. The only relation is this: How
much in commodities can man get for what he
earns by his labor? How much will his effort
buy him? Seven hundred years ago, the work
men building Westminster Abbey and the Tower
of London paid penny and Undertakings
day for their work. If that would buy them the
same quantity of commodities the salary of a
workman today, then those workmen of 700 years
ago were just as prosperous as our Workmen to-
day because it is what get with what we
earn that decides whether we are prosperous. AS
prices fall the purchasing power of the dollar
comes up, so from the standpoint of the general
public this constant Punctuation in prices means
practically nothing. While prices going up,
the value of the dollar is falling and when prices
are coming down the purchasing power of the
dollar is going up.
"From the standpoint of merchandising this
means big problem. We will have to do bust
E czns..,
market instead of doing business on rising
market as we have for the past quarter of CEN
fury. Very few of present business people
have had personal experience in doing business as
we will be required to do it for the next quarter
of century There is all the difference in the
world between buying and selling a rising
market and falling one.
"Now what is the effect of buying and selling
falling market? We have just had chance
to see what that means. We have to buy infinite
ly more carefully on falling market Let say
we buy hundred of merchandise this
month and at the end Of the month we have fifty
cases left in stock. In the meantime, the price
has fallen $40 meaning that we could re-
place the fifty we now have nj stock for
$500 less than we paid month ago. Thus we
have suffered loss Of $500 overbought Buying
close to your needs and estimating your needs and
costs carefully enters into the question OF mer-
chandising today.
81 have had jobbers and wholesalers say
that they would rather sell in large quantities
for six months ahead and cut out handling
charges. That is very shortsighted policy.
The prosperity Of the jobber and wholesaler is
absolutely bound up with the prosperity OF the
retailer, and if any jobber promulgates policy
disastrous to the retailer, that policy cannot fail
to be disastrous to him. Everyone in the bust
ness of distributing merchandise must seek and
find the best policy for everybody, the policy
which means the greatest possible prosperity for
every link in the chain of merchandising.
1--WE recognize today the fact that retailers
must estimate their possible market more close
" than ever before. We don't have to talk to
persuade the retailer to underbuy; in fact pro-
badly 81 per cent of the retailers today are UNI
derbuying. They are afraid they may not be
able to sell. 1t is not so easy to sell today be-
cause this very same thought that Restraints the
merchants from stocking up is restraining Gus
toners from stocking up. There never was a
buyers strike. Buyers strike was a clever
term but what really happened was the individual
himself or herself stopped to think, saying prices
are falling fast; they will probably reach the
bottom in a couple of month and puts off buying
until the bottom was reached. So say the