The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1922-03-20
GETTING BACK TO NORMAL.

J NnEIILNeH ~ NOAA-fA@AL4s
When. during the campaign OF
! 1920. President Harding talked about
a return to normally, probably few
had any conception of what the term
really meant. Most persons may have
taken it to mean a return to pre-wal
conditions and prices. Since that
time almost everybody has come to
see that the restoration of conditions
which prevailed before the war car
never be. So a return TO normally
now may fairly be defined as restor-
alton of the equilibrium of prices re-
gardless of the level thereof.
1t would greatly simplify the task
of students OF economic conditions as
well as governmental bureaus en-
/ trusted with the work of dealing with
social problems if it were possible to
arrive at level Cor prices. wages and
profits that might be considered as
representing normal. Unfortunately.
it is impossible to arrive at any such
figure or sets Of figures.
Normal or a state of "normalcy,"
says the wollman Review, is not
measured by individual ups and
downs. The norm in a trade or
business sense means a certain state
OF adjustment to balance what We
know as approximate equilibrium L
represents a set OF conditions where
by the flow of products from one
group of producers to another is ac-
complished with the least degree of
friction or congestion.
We cannot assert positively that 60
cents is a fair price for corn on mid
dle-west farm, and that IS is a fair
price for a pair OF pillow shoes. We
merely know that in times past when
trade was fairly good and the coun-
try was considered prosperous, the av-
erage farmer did not object strenu-
ously to trading five bushels of corn
for one pair of pillow shoes. Nor could
it be stated Dramatically that corn on
the basis OF supply and demand was
too low at so cents per bushel or that
pillow shoes as a result of increased
production costs were too hish on the
basis OF IS per pair. One thing which
we do know is. however. that the av-
erage farmer would not be SO anxious
to trade his corn for pillow shoes on
the basis of twenty bushels of corn
for one pair of pillow shoes as he
would be when he could trade his
corn on the basis of five bushels of
corn for one pair of pillow shoes.
As a result of the prompt response
that farm products made to the pro-
gram of deflation and the hardness
with which industrial products yield
ed to this influence. we have had a
distortion OF equilibrium that has in
terfered seriously with the return of
normal conditions or fairly prosperous
times. Farm products lost so to Is
per cent of their peak value within
less than a year. The things the
farmer bought were slower in declin-
ing. The result was congestion-stag-
nation. The farmer found a poor
market for his output even at the de-
cline His buying power had shrunk
to half or one-third of its potentiaInv.
measured in dollars, compared with A
few months previous. He bought less
because his products would exchange
for less.
1t was not long before the plight
OF the farmer began to fird its reac-
iion on the industrial worker. The
farmer bought less clothing. less
SHOES, less household utensils. fewer
farm impIen ents. less in fact OF ev-
erything produced by the worker in
the industrial centers. The Industrial
worker made his plight all the worse
by refusing a wage readiustment that
would lower the cost of production
and enable the lessened buying power |
or the farmer to absorb more of the |
industrial output
This was the situation as it existed |
in its worst and most aggravated |
form. In the last few months. par-l
ticularly since the beginning of 1922. |
farm products have risen materially. |
The rise in farm products has not
fully restored the balance necessary
for an unrestricted flow of products l
from one group to another. Never
theless the decline in the prices of the
things which the farmer has to buy
has cut down the disparity that has
been responsible for so much business
congestion. The chief distractions in
the way of a restoration of economic |
equilibrium have been raised by the
building trades. the railroad workers.
the coal miners and the employees in
the clothing and garment making in
dustries.
=======
New financing by American rail-