The Bingham County news. [volume] (Blackfoot, Idaho) 1918-1930, 1923-01-19
Idaho Economic Bulletin
Low Retail sales
Low raw material prices
Interpretation


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
biggest 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
year, largely he had observed a strik.
ing drop in the price of raw silk
early that summer. Now silk is an
article entering largely in the manu-
facture of luXuries and it is luxuries
that people quit buying first when
hard times appear. So the merchant
or seller finds these lines among the
| first to feel the approaching trouble.
| Next appears general curtailment
of manufacturing. Not only the con-
Germs engaged in producing luxur-
les, but all manufacturing enterpris-
es begin to slacken.
Buyers have overbought and can
collation. of orders begins to pour in.
The story Is told of an eastern manu-
facturer who informed a friend who
thought he was looking a little off
color, that he was suffering from
"cancellitis, all his customers were
cancelling their orders.
Then the farmer feels it, and he
feels 1t hard. His productive pro-
cesses are not subject to the same
degree of control and regulation as
are those Of the manufacturing con.
Germ. He is a six months, nine months
even year or three year PROPOSE
ton. He too, has tended to overpro-
duce and now not only does he suf-
fer from that fact, but also from the
decline in manufacturing which has
lessened the purchasing power of
labor, Businesses that have a large |
farm trade, mail order houses for ex-
ample, are hard hit in consequence. |
So is the local merchant and banker
Real estate and building activities |
drop next The building material |
and house furnishing lines suffer at |
this stage. The hardware business |
feels the pinch acutely.
Then retail sales in general fall off. |
Business is reaching the trough of |
the wave. Pessimism prevails. Sales |
men and merchants alike are skepti- |
cal of recovery. Bank and business |
failures multiply. We are in the dol |
drums. All raw materials drop
wheat, hay, lead copper, iron, hides,
wool, and the rest of them.
But the seeds of regeneration are |
to be found in this very condition.
The prevalent depression accompan-
led by the psychology of pessimism
has led to underproduction. There is
a positive shortage in many lines
which tend to stimulate cautious |
of manufacturing. But |
this in turn reveals a shortage of raw
which sends the price of
such goods upward. At the present +
writing lead is quoted at IN cents. A
year ago it was At cents. Hay in
South Idaho'is selling for $500 in the
stack; a year ago it was alleged to
be $500, though precious little was
sold even at that figure.
The resumption Of building activity
follows and with it better outlook
for house furnishing, building mater
Ial and hardware lines. Retail bust
ness in general begins to feel the inn
provement Leaving out Of consider I
alton the Christmas trade, we find, c
or example, that the four largest re-
all stores. in Salt Lake City in Octo-
yer, 1922, made net sales 1877 percent
n excess Of October, 1891, while their
stocks of goods actually decreased Ia
percent under October, 1921, another II