The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1926-12-31
POSSIBILITIES FOR 1927
BY George Woodruff
vce.charman The National Bank Of the Repub Of Chicago

In 1920 we suffered q great decline
in the value Of all sorts Of CONNER.
cial and industrial stocks of goods,
but this liquidation did not extend to
basic costs which had been greatly
increased during the years OF the
war. In 1922 it looked as though we
were going to reduce our basic costs
and that in this reduction program
transportation and fuel would lead
the way. However, the settlement of
the coal and railroad strikes on
basis of the then existing scales was
forced by the grant of increased pay
to common labor that had become
scarce because of the effect Of the
then new immigration law.
In view of what has happened since
1922, it was perhaps just Is we'll that
the readjustment of basic costs did
not then take place, for since that
time the nations of Europe have
shown q somewhat surprising slow
ness in getting back to q producing
basis that would make possible any
serious competition with US. We have
consequently been able to develop
q period Of great prosperity, even
though our activities have been car
ried on. under wartime costs.
Causes Of Our Prosperity
! The period of great prosperity has
been based primarily upon our stock
Of gold that has made possible q
huge supply of credit at extremely
ported by good government, an un-
vArnr In n tad hr;1Ainw hno,vn mnnA nrUu.
that have sold at fair prices, q large
i has been helped along by in
resulted from installment buying, and
the placing Of orders for "visible
requirements" only and good railroad
service, both of which have assisted
in maintaining q steady flow Of goods.
II has furthermore been stimulated
by comparative freedom from Europ-
can competition and BY the fact that
each favorable development in con-
nection with our economic activities
has helped to produce favorable
developments in other lines.
Three Ways Prosperity Might End
Many people have recently talked
Of possible business reverse and in
this connection let US consider in
what ways our present prosperity
might be brought to an end. First
of all, we might experience q great
period Of initiation. followed by the
collapse that always comes along be-
hind. Second, we might be called
upon to meet quite ruinous COMPETE
ton from Central Europe. This
would cut our export Of goods to
foreign shores and in spite Of our
tariff wall would gradually bring
down selling prices in America to d
point. where industrial readjustments
would be forced. Third, we might
suffer from such domestic disturb.
ances ~ crop failures or q long and
wide spread strike. This would upset
our present evenly balanced produc.
ti0n program, resulting in business
confusion that would spread to many
lines and that would bring an i'm.
portant change in our present mode
Of business life.
lnflatiOn
In connection with the danger Of
| initiation, we must recognize the fac
that such condition has been threat
cncd both In 1926 and 1926. Never
theless, VIC have been fortunate II
having ! vast number Of sound, con
sentative business leaders who have
withstood the temptation to embarl
upon IN inflationary course. Il IL
true that certain lines have wander
| ed from the path Of prudence. and VI
have seen examples Of local infla
tion, % the Florida land boom AM
the high prices Of stocks. However
these local missionary boomlets hav,
flsttsned out from time 10 time with
ont seriously disturbing the genera
trend and the general commodit,
price index I has remained extremel,
steady. Even. though hank clearing
and car loadings have proved tina
business volume has Smsde stead,
gains, still the commodity price indie,
has shown that business men hav'
not enthused 20 greatly % 20, bid III
the price Of everything TO poin
where value would have become In
flated and the inevitable day O
reckoning would have snsusd.
However, eveu though conservative
action In the past carries with Il som
guarantee 81 conservative Aetion i
the. future, NJ. must not forget tia
every period Of greaE prosperity hs
alwsyv culm1n6ted in inflstion end
business revetue. A Threat Of short
aee Of fright cars or the fear 0
shortage Of coal might quickly brin,
business men to abandon buyin
from 1ahand. 20 mouth" and y sub
stitnts the old method Of "stockin
up" Commodity prices would the
be sure TO rise and unless our pres
ent economically sound minded gov
eminent heads end the offieers Of th
Fsderel Reserve could put on tn
brakes, ~ might find ourselves head
Cd towards one q the most spseta:yI
The .nsvitable eorollary Of . businss
crash.
/ DureDean Csnpetitlea
II We should not fail 20 realise tha
EMpepean composition Il slowly gain
ing and that wht1e II can hnedly hi
lustAsSd in 1897, ~ will Doubtless b
the factor that will ultimately brin
!. l al Ass~ AwAnk Unv4AA - Aeaa