Evening star., 1932-08-14

factories, took advantage Of the depreS-
sion and sent men about the country
to buy I'D the leftover supplies on the
shelves of merchants. Because of un-
employment, people were holding off
new purchases as long as possible. Re
tail merchants were often in distress
because they could not move their
stocks. They were glad to sell out
whole lots at low prices to buyers repre-
senting large companies.
The same situation obtained in otEer
lines Some sections of the country suf-
fered more during certain months than
others. Sales at retail would slow up
seasonally and speed up somewhere else.
BY buying these stocks from dealers
not infrequently at bankrupt sales for
few cents on the original price paid
wholesalers could job around, redis-
tribute and manage to supply the more
active markets at a small profit.
The main point is that such pro-
cedure kept on diminishing the total
stock Of goods in the country week by
week, with very little new production to
I'LL in the spaces created.
Supply Unequal to Demand.
1t will be noted that Dr. Wells says
"the commercial world again suddenly
realizes that the condition of affairs
has been reversed and that now the
supply has become unequal to the de-
mand." 1t might seem that the COM
mercial world would be so well organ
lied that the word suddenly" could not
be properly used; that an adequate flow Of
information would be supplied to pre-
vent the market being taken by sur
prise. After all, the world of business
4 rkA l. lAw@N INNS~ AlA
ment, and 1t Is the story Of the world
that people are forever being taken by
surprise by the most recurrent events.
1t took centuries for mankind to get
over being surprised daily at the sun
rise.
The fact remains that even with all
| the trade and market information
there is on hand. supplied by the Gov
ernment and by trade organizations,
realiZations of change in the tenn
| per Of the market continue to be
| sudden" So it was with a certain
surprise that the boot and shoe men,
| that the inventories of boots and shoes
| in the country were practically nom
existent. The retailers, fearing to lose
sales by not having goods in stock. be-
| gan ordering from wholesalers and the
wholesalers began ordering from fac
tories. Already situation is Develop
ing in the country where orders a1s
| being placed at two or three factories
to insure early deliveries and additional
| goods are being contracted for future
! deliveries. This Is termed forward
! buying and spells boom.
This type of ordering is stimulated by
fear that prices, at the next order,
will be much higher and every one
rushes for the bargains. When every
one rushes at once, bargains disap-
| pear speedily. In a great many lines
of merchandise and manufactured
goods prices are on their way up right
now The wholesale price indexes are
rising daily All this means men by
the thousands are being brought back
and machines set in motion. Pay rolls
are being resumed and those who have
been waiting so long for resumption
are wondering what they have been
waiting for, wondering why they didn't
manufacture in anticipation Of the de-
mand If they had all done that, the
demand would not have developed:
there would have been no discovery of
shortage and the depression would
have lasted on and on.
Change is what makes business and.
in spite Of all the learned findings Of
the economists, the world may come to
the conclusion that the business cycle
Is indispensable to business.