Connecticut western news., 1922-10-05
BUSINESS INITIATION ITEM
 .. PORARY, SAYS BABSON
Continued from page l

of common labor in this country. It
 is the reason why the United States
 Steel Corporation and other concerns
 are increasing the wages of common
 labor. If this law continues very
 much longer it will cause an infa- tion in the wages of common labor and thereby tend to bring about general imitation. h.
 "The Tariff Bill, which was passed
 last month, is second cause of in fation. Whether or not such a
 tariff is good for the country is a political question and is not for me to discuss, but all students are' agreed that it is largely tempor-; ary stimulant. The tariff helps the manufacturer the same as the Immi- grafton Law helps the wage worker. But neither the tariff nor the Immi- grafton Law increases production or makes two blades of grass grow where only one grew Eefore. The tariff will cause an increase in the price of goods the same as the I'm migration Law will cause, an increase in wages. Increasing prices and in creasing wages, however, do not make the country any richer. The
 country becomes richer only as it has more houses, more bushels, more
 tons, and more yards of goods. Marking up the price of goods ac- compHshes nothing. With about a thousand dollars you can today buy million German marks and become "a millionaire, but you. are no richer than before "A 8.-2 1.' i 5 "The third event that will help bring on the infatfon, happened last week when England gave in to Fur key. England has been the one>great country outside of America which has stood for law and order; for the
 payment of debts and sound cur rency. The lack of France and Italy to back up England on the Turkish matter has shaken the con fidence of the world in Europe and European securities. Even some Englishmen themselves are saving, Whats the use. If no one will back us up we had better let nature take its course.' This means that Eur ope instead of checking it's bad lea eders, has given in to them. The Turkish victory is victory for the infationists of Europe. The back ing down of England is defeat for the sound money interests of the world.e This is bound to have an 1 unfortunate effect in this country | and cause higher interest rates. The | cheaper interest rate period in which l we have been entering may tempor- arily be checked and even money | may be scarce for a short time. As the immigration restrictions cause an imitation in wages, and the tariff l an imitation in prices, so this Turkish | episode may cause an imitation in l interest rates.
 $ These three factors may cause temporary imitation. None of them, however, affect the long swings of | business which are determined by fundamental economic law. So far as the long swing goes, we are in a period of deflation which will. con- tinue for some, years to come. Over ] the long period of years the ten decny of wages, prices, and interest | rates will continue downward. How ever, it is very likely that this ten- idency has temporarily been checked and We shall probably have all the ear marks of a period of prosperity duringSfhe next few months"
 IT, GehAral business as reflected by the indsx of the Babsonchart is at the shighes1 point in over two years. Ac- .tivity his week is but 67o below normal !as compared with 7eo below last VI A aaa Il & stsH below a year &Raa},