Atlanta tri-weekly journal. [volume] (Atlanta, Ga.) 1920-19??, 1922-01-03
FLAT|ON BROUGHT
ABOUT by THE WAR
NEARLY D|Ss|PATED
Process Uneven but Nearly
Complete Costs and
Pricesr Remaining High,
Soon viii Fall
BY HARDEN fCOLFAX
(Lcused Wire Service to Tie Journal.l
Copyright 1921

teen tWenty-One goes into history TO-
night with record unparalleled since
American industry began. For all its
faded hopes, its heartburnings and
it's business reverses, the year stands
supreme in the bright annals OF
American industrial and commercial
achievement. Within the space of
it's twelve months we have done
something the like Of which no peo-
pie have ever done in twelve
months time before. We have
squeezed out the wartime initiation
of almost everything entering into
our economic life.
The process has been uneven, as
the figures bear witness. 1t is not
yet wholly complete, but it is very
nearly so. Here and there, like
peaks in a mountain range, stand
towering costs and prices. They soon
will fall, toppled by the forces which
have nearly leveled all about them.
But the general level Of all commodi-
ties and prices, averaged as whole,
is not far from the figure it Should
be, allowing for the natural and rea'
sonable upward trend that inevitably
comes with peace and prosperity.
All this has been accomplished,
without panic, in one-tenth the
time or less that readjustments have
REQUIRED in the wake of other greal
wars Great Britain, after the Ma
poleonic wars, spent many years In
the industrial upheavel and unrest.
The United States was in industrial
ferment for more than a decade att
er the close of the Civil warn Inc
progress that then required ten
years to accC mpIish has been accom-
plished, or very nearly so, IN 19Zl.
One year ago today the average
prices Of everything for sale in the
United States-farr products, 1000
clothing, fuel, metals, lumber, build
ing materials, chemicals, house-tur-
nishings and manufactured goods
was a littl, more than double what
the average was in 1918. during
1921 the price dropped one-fourth,
the department of labor says, until
today the average is less than one
and one-half times the 1913 aver
age. The normal, peace-time in
grease would carry the average to
not Tar from ore-fourtf abover ttae5
nre.war price, assuming that nation
al prosperity were unchecked, so
that today general prices are less
than one-fifth higher than they
would be had there been no war IN
flatiop.
History of Finances
Perhaps the most remarkable
showing Of the nations V1gor IS
written in the history Of its finances
for 1921. &,
we reached the peak of initiation, as
measured by the amount OF money
in circulation. At this time tnere
were more than three and oDe-thlrd
billion dollars of federal reserve
notes in actual circulation. Inc
lending resources of the banks mao
a half dollars of their rediscounted
indebtedness, and of what remains
less than half q billion dollars is
lent on Liberty bonds and other
government paper. 49,,
Interest rates, sky high at the
beginning of the year, have dropped
+o neace-time levels and seem bound
for still further reductions. The re
discount rate of the New YORK pank
has fallen by successive stages, from
seven Der cent to four ana a nan.
The other reserve banks show com
narahle decreases; not one mas Iall,
ed to cut. Deposits IN nalloIia1
hanks have fallen somewhat aiso;
bur their reduction, was nature.
consequence Of wholesale paying OIL
of loans. As it is, hoWeVeryS suCl!
deposits have dropped from fnedrH
eleven billion to about ten ana
quarter billion dollars-a aecIedse
of six hundred millions-wnlle ioails
to the extent of sixteen hunoieu LII
lions have been repaid;
Banks in Strong Position
The banks. according to the re-
serve boards showing nave mo- mo-
money today than they can lend.
Their tremendous strength IS oue ia
large part to a veritabie torFens "
gold that has poured upon American
shores. From every part OF tIe
world it has come, breaklng an rec,
ords. Nearly seven hundred million
do1Iars has come to us in gold coin
or bullion during the year. Less
than one-tenth of this amount has
been ra.exported. The tide Is stu
running strongly toward our shores
as 1922 dawns.
When 1921 came in the banks
were frankly worried. AS 1924 goes
out, the banks are in the seronges.
position they have been in Tor
MANY wears. interest rates are nor
NAL, money is plentiful and credlI
easy.
The troubled Industrial conditions
of this country was felt early in the
vear by the railroads. Always a
Of
prosperity, the carriers were almost
the first to feel the full force OF the
reimbursement pressure. Last Jan.
nary they wrota their balance in red
ink. In February they dipped still
deeper in the red, Notwithstanding
abnormal freight and passenger
rates. During the month expenses
exceeded receipts by more than sew
en- million dollars.
The carriers then launched an ex-
traordinary campaign of retrench-.
n1ent. Expenses were cut to the
bare boards; only the most urgent
supplies were purchased; no effort,
was made to keep up equipment and
all sorts Of economics, large and.
small. were studied and, so far as
possible, put into effect. RI
SO drastic was tine retrenchmeht
that the working forces Of the roads,
which totaled 100000 men jan
uary I, were cut by April to 1,543,-
009 men. That figure was almost
twenty-five per cent less than the
number OF men the roads had on
their rolls in December last. One,
man out Of every four was, laid of.
The margin between revenues and
= I'M ~ L.
deficit was followed by ( a March
profit of about s30.000,000.H In June.
the profit was $51 100000; in July.