The Birmingham age-herald., 1922-03-26

that it is here given in full:
 There never was time in the commercial history of the United States when it was so urgent that we business people get together and dis cuss business conditions thoroughly and carefully. We have got to learn to do business today on an entirely different basis than for the past quarter of a century; and for another quarter of century to come we will have to do business upon this new basis.
 Colonel Ayres, the government sta tistioian who founded the statistical department for the American Expedi- tionary force over in France and then came back to Washington and inves- ugated price figures running back more than a century. has prepared a very interesting chart which shows us that the extreme peak oc high prices over which we have juSA pass ed Is nothing new in the history of our, country.
 We have heard people taIlrarg as if this last burden of high prices were something absolutely Vnparal- 1eled in the history of this country while 1t has happened precisely three times the same way. Three times, prices have gone up 250 per cent above the starting point. The first time, after a slow and steady climb of 80 years, that peak was reached in 1872. Tho war of 1872 accelerated the climb of high prices so much that they toppled over and started down.
 Then for 25 or 30 years that down. ward path continued until the bottom of the valley was reached. Once more prices started slowly to climb until after 6 quarter of a century the war of 1S61-1S64 accelerated the prices and toppled them over. Again they started downward and kept go- ing down for a period of 25 years when once more they started up for 25 or so 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 going for 20 years and those who say that we may expect a return to wartime prices or expect the bottom of the valley to be reach ed within a few months are misguid- ed optimists and speak, certainly without intelligent knowledge of the facts of history as revealed to us by investigation of the commercial his- tory of this country.
 Don't think for one minute that the suggestion that we may have de- scending price market for the next quarter of century and that it may be at least 50 years before prices re- turn to 250 per cent above the valley level, means that we are going to have hard times for at least 25 years.
 Nothing In Common
 Prosperity and high prices have nothing in common. If high prices meant prosperity, which would be the most prosperous country in the world today? It would cost you 1but hope it won't cost any of you) 1,50o, 900 rubies today to buy suit in Rus sa. It would cost you 5000 rubles to send a first class letter. If high prices meant prosperity, obviously a country having prices which have reached such high levels would be the most prosperous in the world.
 In reality. of course. high prices have nothing to do with prosperity. The only relation is this: How much in commodities can a man get for what he earns by his labor7 How much will his effort buy him7 Seven hundred years ago, the workmen building Westminster Abbey and the Tower of London were paid a penny and three-farthings a day for their work. If that would buy them the
  salary of a workman today, then those workmen af TOO years ago were just as prosperous as our workmen today, because it is what we can 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 fluctuation in prices means %&.-.1 ff,I x.~lA 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 merchan- dising this means big problem. We will have to do business for the next 25 years on a falling market Instead of doing business on a rising mar ket as we have for the past quarter of a century. Very few of our pres ent business people have had per sonai experience In doing business as we will be required to do 1t for the next quarter of a century. There Is all the difference in the world be- tween buying and selling on a rising market and a falling one.
 For example down in Boston, I en- countered an incident of a case of shoes sold by one of the great manu- facturing houses of Boston to 13 re- tailers, in turn. This was at the very time when prices were going up al- most overnight. The first retailer didn't accept delivery because he was offered an advance, which enabled him to get his profit without actually handling the shoes. The second re- taller released to another. and so on until that case of shoes changed hands 13 times, every one of the re- tnilers taking his profit before the case was broken open and distributed to the ultimate customer. It doesn't take brains to buy on a market that jumps like that. All you have to do is to buy all you can get and pay for, with certainty that you will make profit. As for selling. you can't sell the customers grab the stuff off your counters.
 Now what Is the effect of buying and selling on a falling market? We have just had 8 chance Go see what that means. We have to buy infin- fte1y more carefully on a falling mar ket. Let us say we buy 100 cases of merchandise this month and at the end of the month we have 30 cases left in stock. In the meantime. the price has fallen s1o 2 case. meaning that we could replace the 50 cases we now have in stock for $500 less than we paid month ago. Thus we have suffered a loss of $500 overbought Buying close to your needs and esti- mating your needs carefully enters into the question of merchandising today.
 ShortSighted Policy
 have had jobbers and whole salers gay that they would rather sell in large quantities for six months ahead and cut out handling charges That