The Washington times., 1923-11-02
BUSINESS
COSTS SLICE
PROFITS
Competitive scrambIing for
Markets Leads to Quick
ened Output.
By w. s. COUSINS,
Copyright. 1898. by Cosmopolitan
-. enr,.ian


News Servioe.)
NEW YORK, Nov. 1.-The high
cost of doing business is q source
Of frequent complaint today from
business and Industrial leaders ana
it's effect may be seen by compar-
ing current quarterly statements o.
industrial corporations with those
of former years.
Conpetitive scrambling for mar
kets has been a strong lncellsl ~
for producers Of necessary cLl-
noditias ia disregard costs in oruer
to Quicken output and thus con-
vert production into cash. Ills
may eventually mean the sllclls -
selling prices on commodities
markets are not well organlzed anu y.
therefore yield most reaoly -
dumping tactics. 200 ~.
In the third quarter OF lsAS ..s
Studebaker corporation turned Uu .t
annsot1ntad to $4,4S8,974. In the
same ueriod this year the produc-
tion was 1885 cars and the net
profits S4,8S5, $50. This Is but one
OF several striking examples OF the
| lower nit-profit on pr0ducIlon
which is characteristic OF this
season.
Sxchange Values Upset.
When the countries of Europe
were on a gold basis, the relative
values of their currencies could
easily be ascertained by computing
the amount of gold represented Dy
Zach outstanding note, plus the
actual cost of transferring this
oold from one country, If neces-
sary. Thus IL the cost of exchange
on any country was too tar from
narity. 1t was a simple matter Tor
an importer to ship gold to mis-
creditor instead of buying exchange.
But with currencies jumbled and
inflated by heavy emissions rom
the printing presses, and internal
economic conditions Of most Euro
pean countries chaotic, 1t is dill
cult to arrive at any fair basis OF
relative exchange values, and many
of the posted quotations are NOM
inal. Some of the prominent inter-
national economists have proposed
a plan known as the Purchasing
Power Parity of currencies, to
measure the accepted ratio Of values
1 of currencies of leading countries.
The plan would necessitate the
charting of the purchasing power
of each unit of currency, and its
comparison with the relative stand.
| ing of currencies of other countries.
Obviously, the, great obstacle to
it's adoption lies in the instability
and wide daily fluctuations of the
actual values OF currencies which
have wandered farthest from the
gold standard.
Charting Business.
An ingenious method Of charting
the course of business prosperity
was suggested by Prof David Fri
day. OF the school of social re-
search. Since buying power is the
basis of prosperity and wages are
the source of the largest share Of
buying power, he proposes that
| the government secure an official
| report from all business corpora
tons and partnerships, by the fifth
| of each month of the total wages
paid in the preceding month; the
aggregate of such payments to be
published by the department of
commerce, in the same manner as
crop reports or exports.
| The professor calculates the total
wage payments this year at thirty
| five billion dollars, against forty
/ billions in the hectic silk shirt
prosperity" Of 1920 and thirty-one
billions in the mild depression of
| 1921.