The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1922-11-28
PRICE PENDULUM SWINGS BACK

PRICE PENDULUM SWINGS BACK.
Shortly after the close of the war.
when prices were at the peak and
everybody was urging that everybody
else's prices must come down, The
state Journal pointed out to its read
ers. repeatedly. the serious conse-
quences to business generally and to
the people. of falling prices. Prices
began to decline and the unemploy-
ment. bankruptcies and bank failures
which followed are too well remem-
bered to need that attention be di-
rected TO the record.
Now prices are rising. The advance
is bringing with it full time employ
ment of labor at good wages. Times
are good and business is booming.
While nobody is willing to buy when
prices are falling, when prices are ris-
ing everybody buys. If he has not
the money. he will go>in debt because
ahead. The situation feeds on itself
and becomes fat.
As an evidence that the price rise
is on it's way, Bradstreet's index num-
Der of commodity prices. of November
1 showed the decided advance of CT
per cent over October 1. This index
number is IT'S over November 1 last
year, and 23.7 per cent over June L,
1921-the date of extreme deflation
from the after-war boom. This in
crease in prices, in which is included
raw materials as well as finished prod
ucts, may set some measure of in
crease in profits, which latter are also
augmented by the larger percentage
of producing capacity now in opera
ton and growing.
The trade reviews give a rosy view
of the business situation. The inspira-
ton of mounting prices. is taking pos
session of the business world. Con-
sideration of what prices were before
the war is beginning to lose its effect
in comparison with what they are now
or what they may become. Economic
| investigators vary in their calculations
OF how long this tendency of prices
will continue, ranging in their enti-
mates from two years up to ten years
But all signs point at present to gen.
orally higher prices. When such is
the case and the buying community
becomes dominated by the idea. a buy
ing wave is bound to start. The hu-
man desire not to get left in the
scramble predominates.
The Standard Daily Trade Service
says that the basic reasons for the
higher-price movement are:
First: The increased supply of gold.
bringing with it a commensurate in
crease in our total circulating media
n Tins ~ 10 fr,o sf-r
Second: The prospect that we will
period to come.
An increasing gold supply tends to
increase the general level of prices in
the country where the supply is held.
1t follows that the purchasing power
of the gold in that particular coun-
try will be decreased. In this country,
that is what is happening. whether
we want it to CIR not. Our great sup
ply of gold is increasing the cost of
living inevitably. 1t is bringing on,
it is true, an increase in business ac-
tivity. but when this has climbed to
high enough level, whether in one,
two or five years. we must descend
again. And the steps down are al
ways acutely> uncomfortable.
All the world owe US great amounts
and have not the money or the credit
to pay. If they have any goods with
which they would like to cancel some
of the debt, we are doing the best we
can to shut them out with a tariff
barrier.
1t is pointed out by the Bache Re-
view that we have a huge, potential
demand in our own borders for all
kinds of goods, and we have a steadily
increasing means of filling the de-
mand; that is. we have huge, natural
resources. a highly organized. indus
trial system, and an enormous sup
ply of money and of credit with which
to produce more than ever. The
Trade Service says our geological iso-
lation from Europe, together with a
policy of high tariffs. has fostered
the development of internal trade at
the expense of trade with other ma
tons. The ratio of our exports to our
total output of goods averages only
about per cent. And this interna-
tiona1 trade is largely with countries
of the Western hemisphere and Asia,
who, most of them, have some means
OF paying us. Our exports to Europa,
which has very limited means, aver
age only per cent or per cent of
our total output.
Advocates of a ship subsidy tell us
that vpa cau nor DroSpar without m