The daily star-mirror. (Moscow, Idaho) 1911-1939, 1923-01-10
PROSPECTS Better
FOR FARM PRICES
UNIVERSITY ECONOMICS DEPART
MENT DIRECTOR DISCUSSES
BUSINESS CONDITIONS

Higher farm prices are in prospect
in the opinion of Prof. H. G. Dale,
head of the university department of
economics.
Where are we now, at the turn
Of the year 1922-23," he asks. in the
current issue of the Idaho Economic
Bulletin, after explaining his theory
of the cycle Of business depression
and recovery. Having described each
stage of the process, he says: Need
less to say, the stages are not mutual
ly exclusive; that is, we do not fin
ish one period before entering the
next. They overlap. 1t appears that
we are passing through the stations
marked Higher Raw Materials
Building Activity, and Better Retail
| Prices and, to continue the meta
phor, that the blocks are open and
we are almost to the yard limits of
the division point called Higher
Farm Prices"
The next station after Higher
Farm Prices" is Market for Luxur-
ies,'' and then comes "Overproduc-
ton"
Luxuries First to Go
scription Of the selling cycle.
1--WE start with overproduction for
it is in an excess Of economic goods
that the extreme optimism character
istic of the peak of prosperity fire.
quently manifests itself. One of the
first signs of trouble is found in the
market for luxuries. One of the big
gest manufacturers of cotton cloth
in New England shut down his mill
in the summer of 1920, though he had !.
sufficient orders to run him over a
year, largely because he had observ- {
ed striking drop in the price of !
raw silk early that summer. Now
silk is an article entering largely in i
the manufacture of luxuries and it is {
luxuries that people quit buying first t
when hard times appear. So the
merchant or seller finds these lines
the first to feel the approach /
ing trouble. (
Next appears a general curtail- t
ment of manufacturing. Not only the
concerns engaged in producing lux l
uries, but all manufacturing enter 1
prises begin to slacken. Buyers have c
overbought and cancellation of or {
ders begins to pour in. The story is t
told of an eastern manufacturer who t
informed friend who though he was t
looking little off color, that he was a
suffering from 'cancelitis'-all his 3
customers were cancelling their or i
ders.
Effect on Farmers @
''Then the farmer feels it. And he
'eels it hard His productive pro-
,esses are not subject to the same de-
gree of control and regulation as are r
hose of the manufacturing concern.
His is a six months, nine mouths, n
wen a year or three year, PROPOSE s,
ion. He, too, has tended to overpro- ri
luce and now not only does he suf- a,
er from that fact, but also from the n
Lecline in manufacturing which has m
the purchasing power OF r,
abor Businesses that have a largeI
arm trade, mail-order houses for ex- =
mple, are hard hit in consequence. 4
10 is the local merchant and banker. Z
NReal estate and building activity 4
rop next. The building material and =
ouse furnishing lines suffer at this n
tage. The hardware business feels .
he pinch acutely. s& 4
"The retail sales in general fall =
f. Business is reaching the trough =
( the wave. Pessimism prevails
alesmen and merchants alike are q
xeptical of recovery. Bank and z
usiness failures multiply. We are in q
le doldrums. All raw materials 4
rop-wheat, hay, lead, copper, iron, =
ldes, wool, and the rest of them. 8
Conditions Remedy Themselves
"But the seeds of regeneration are v
be found in this very condition. 8
he prevalent depression accompan 4
d by the psychology of pessimism 4
Is led to underproduction. There is Z
positive shortage in many lines =
hich tends to stimulate cautious Il
of manufacturing. But Z
is in turn reveals a shortage of 9
w materials which sends the price y
such goods upward. At the pres =
It writing, lead is quoted at IN
nts; a year ago it was AZ cents.
ay in south Idaho is selling for Y
100 in the stack: year ago it was =
legged to be $500, though precious :
tie was sold even at that figure. Il
1.-THE resumption of building ac- Z
yity follows and with it a better 8