The Washington herald., 1922-02-27
HIGH FACTORY
COSTS BLOCKING.
TRADE REVIVAL
New England Mills Find
Necessity of CurtaiI.
ing Operating Costs.
FACED WITH LOSS
Consumers Not Responsive to
Increases When Re.
quirement Arises.
FACED WITH LOSS

~
YET no signs Of a restoration of
normal business conditions. The
reason was cogently stated last
week by a banker. who said: "Busi-
ness continues dull because the
liquidation Of credits is accelerat-
ing This may not be obvious to
the casual observer, but IL in un-
auestionably a fact that much
progress has lately been made in
thawing out credits. The natural
tendency is TO depress prices. and
this in turn makes final consumers
feel that they can safely defer buv-
ing
This means that producers in this
section are all more or less unset,
They are tossed between the devil
and the deep sea. To move thcit
GOODS they must lower prices. but
that means labor troubles. This is
clearly illustrated in the textile in
dustry.
Mills Inherit Trouble.
The jump IN cotton last fall from
IL cents to 20 boded i'll for tn.
manufacturers. They bought the
staple and marked up the price Of
their goods. Consumers. however
were not responsive. The planters
took in good deal Of money,
greatly to the relief Of their banks
Their troubles were transferred TO
the mills. and the latter are now
wrestling with them. This. un-
doubtedly explains why cotton mill
wages have been precipitousIy re-
duced
Opinion differs as 10 how large
stocks of manufactured goods our
cotton mills are now carrying. Con-
tecturally, they are large enough to
make the manufacturers view the
present textile strikes with relief
rather than with uneasiness. Their
troubles have for the time being
been cut in half. Their one prob :
lem is that of liquidating their
goods. This is no light problem.
with the American disinclined TO
buy, with foreign markets short
OF cash. and with accumulated
stocks at Southern mills that have
been operating overtime on low
wages.
Wool Prices . Problem.
The wool goods people are funda =
mentally not much better off. High
er quotations on the raw material
have had about the same effect on
hnal consumers that the higher cot
ton prices have had. The largest
producer has told his operatives
that their wages will not be cut.
but the middleman and the retail
ers have not been heartened by
the statement. orders have been
small. and show no signs of en-
larsing. Nor does the fact that
Eastern wool merchants have in
recent weeks been buying up clips
in the West at advanced prices act
as a persuasive. Tariff possibilities
may be worrying the trade, but
they do not appear to be worrying
the public in the least
IL there is any Improvement in
the shoe industry. il is At least bu;
"spotty." Some factories report
improved orders and others do not
Few, II any, however. report nor
NAL orders. and so far as can be
learned. none looks for anything
like normality before next fall, a,
least.
shoe Output smaller.
AS matter OF fact. the real con-
dition of the shoe industry is dis
closed by the present tendency tu
curtail operations at the factories
One OF the largest producers has
just reduced This daily output to q
very considerable extent. and il ~
understood that others have the
same thing in mind. The shoe man
ufacturers seem to think this is an
easier way OF solving their labor
difiiculties than that adopted by thu.
textile manufacturers. Time will
determine whether they are right
This much may be said: II there l.
one thing more than another tina:
the masses are determined to buy
at minimum prices, it is footwear
New England manufacturers are
studying western-made shoes with
great care. They see Western
shoes underselling the New Eng
land product. and have discovered
that while the material is quite as
good as ours. the labor cost is low
er. This is interesting as disclcs-
ing that the more effective liQuids-
tion Of labor in the Central West is
beginning to react upon the East In
apprecisble measure
Among retailers making exIen-
sive cuts in prices there is some
appearance Of activity. The pur-
chasing power of the masses is
probably higher than appears on
the surface, but there Is a general
purpose to make the dollar 100 per
cent effective. In short, every one
seems tired of paying for an un-
necessary overhead in the matter
Of capital and for a deplorable in
eficiencN in-the matter of labor.