University of South Carolina Libraries
TIT ESP AY, AUGUST 26, 1919. PRICES COi (By Paul Clay, In Forbes Magazine.) pool or It has been generally believed that supply commodity and goods prices were nev- So it is er coming down. This belief has been that is, taken so seriously, even by those who have all exercise intelligence in most matters, If, tl that it is worthy of examination. ' amount It is easy to see how the idea came the Uni to prevail. Producers and merchants one of have been praching the doctrine of commoc permanent high prices in order to in- come d< duce the public to buy, and they have or powc for evermore, and a continued bull able to market in which i> will always be easy| of copp to make money. A student of finance market thus summarized the opinion of the about 1 4 street: | Soft i "Prices have become acclimated to have ai the present level, and they are going' than 5i to stay here or go higher. You will are pre never live to see them come down.] 400,001 The money and wage inflation will mines 1 not let them down. Indeed, 1 would 5b0,00( not say that prices have gone up, but' ?'tly ab rather that the value of the dollarj mi has gone down. You pay twice as enough much for anything you buy, but every cotton one is getting $2 of income where he ducing used to get $1, so that it Is an even hue bal thing. Stock prices are about the tion of only ones that haven't doubled; but tween stocks are earning double what they parity; were before the war, and they have %vas ub got to double their dividends. Stocks cent be that used to pay 5 per cent must pay llelie 10 per cent, and when this becomes price It the rule stock prices will double " | ure out Kverywhere the wish is father toj plant cj the thought and serious examinations to he k of the question whether prices actu-'show t ally will come down or not are con-! would spicuously lacking. Let us do the, idle; b unusual and unconventional thing man w namely, a bit of sober thinking upon tail pri the subject. Thinking In regard to|that he prices is unusual because nine people output out of ten take their opinions ready- cotton made from the captains of industry tail acr and finance; and it is unconventional ceeded because under existing conditions It about 1 is to the Interest of both organized Hut inuur aim organized capital that plant c prices should stay up. Roth can that th make more money if they stay up, 000 an and enough more to live higher than now se before the war. do not Rut we cannot see Into the future and llo by looking at the wishes of various hardly interests. There are definite business where i influences or economic forces which tain th govern prices, and through an honest begin 1 look at these some rather broad, but Qf aim reliable, conclusions can be reached will b< at the outset. prices. Perhaps the best known of these is The the law of supply and demand. This Up is t< law. or rule, is merely an expression an,j j,n of the experiences of all ages and only wi peoples. It means simply that when soi, the supply of a given article exceeds n js the demand for It. prices will goj jnfr t.V( down, and vice versa. There have (ju, wo been trusts and monopolies and cor- to lit t nors ever since Joseph went down profitet into Kgvpt to buy corn: but while the Howi rule that supply and demand governs 0f supj prices can be temporarily interfered statisti< with. It always cornea back and exer- were tc rises its dominating force. have e The biggest single factor in deter- ?' 1 mining supply is plant capacity - a reus< and go meaning the extent of the plants or . , Price h factories built and equipped for the nu production of a given article. Wheth- wheels er or not a plant is idle at the mo- though inent is almost immaterial in consid- though ering future supply, because there is ment 1 always such a strong inducement to withou kl (>li uriwl net ni? nlunla ,,n much as possible. When they ar?J < nn ro idle (he owner rcIs no return on the| \s p money invested in them, and besides .more ci this they deteriorate physically at the! and dii rate of 2 to 7 per cent per annum.'a tuple, liven where there are agreements to a supp restrict production in order to main- require tain prices, producers individually lo meet are always tempted to break awav bides g front these agreements and produce fen at the full capacity of their plants past y? in order to get the profit on the larger almost volume of business. Thus idle pro- and to during capacity is always tin Indira- down h lion that supply will increase: and borrow but fot short and exceptional periods either < of time. It is a reliable indication, amount Trust agreements for keeping produc- bank or tion down, or gentleman's under- Hut the standings for the same purpose, work and th< very well so long as there is business to advj enough to go around. But whenever, everyor because of reduced consumption or tail sin monetary troubles, there is a dearth more c of business, some of the producers his trar are sure to break away from the Wtij agreement or understanding and be- Durli gin cutting prices as a matter of self- have g preservation. Then the monopoly, require uiuiirih io meir assistance a great] in lo< army of advertisers, writers and so- one, it i called economists, whose opinions are1 idle pro for sale. Hcsides this, some few econ- We 1 >mlsts of the best intentions have been to prod over-awed by the apparent strength of lumb of prices, and have come to accept turning honestly the theory. 000 fee Wall Street, too, simply devours the our ste theory that prices are to remain at tons ye the present level, for if this be true ;tt the ! it means immense industrial nrotits' tons. THE LANCA 000 of additional workln M/JT? \17\T carry on the business of YEJCt f #1 m |r|f can people. The mone supplies of raw material .... . .. , ? furnished goods on hand, trust falls, and the rule of ... .. cost of labor that it took and demand reasserts itself. . . . . , A. . . , finished goods. Otherwis that successful monopolies?- . , . , , ? . , in order to keep this bul effective control of prices? , ... . . . * i, i in commodity and goods vays been short-lived. ? , . A. , forward, our business ir hen, there is now a large ... . ... , , , able to borrow somewlu of idle producing caoaeitv in , - ~ ". . . V tional $500.(too,(too eac ted States or the world, it is .. . .. . . 4. t thereabouts, the surest indications that , . This is why interest r lity and goods prices will . , , . , , ,, coming so high. It is t jwu, regardless of the wishes , ...? w , . and more difficult to hot >r of any man or organization. , , . . . , . . . large aggregate amounts, jking at our industries one by , , , , , , , , . supplv of loanable funds s observed that the amount of , , ... , , short. Capital is nothing ducing capacity is immense. . ? , but accumulated savings lave a capacity, for example, .. ,, .... ? . ...... a..,, r . ,h<! savers, through then uce about 4 4,000,000,000 feet ... , ... banks, have loaned all t er per annum, whereas we are ... . ^ or capital the borrowers out only about .10,000,000.. row any more until more t. I he aggregate capacity ot ? . . , , ot personal incomes. el plants is about 4 2,000,000 .... , , What. then, happens t< ally, while we are producing ... . prices when the supplv of rate ot only about 27,000,000 , . , , . short as it is doing now Our mines and smelters are turn out 1 , 1 . . , , , leather trade. The retail er annually, but tor lack ot a . ,. . , gets in from the manufa they are turning out only , , , , consignment of shoes at ,2(?o,ooo.ooo pounds. . ... .... prices be ever paid. 11? coal mines 111 the I lilted states . bank with a renuest for i :i annual capacity ot not less , , ... ...... ...... , . $5,000 lean, and gets tb lb,000,000 tons, whereas they ... money is tight and he e; xlucing at the rate ot about ... . ? .. $2,000. When money is 1.000 tons. Our anthracite , , , , , business Is affected by it, lave a yearly capacity ot 09,efforts to borrow the l tons, and are turning out , . , , . . o- ...... . where result in either fa out 8a,000,000 tons. Our cot- , .in paving an excessive r lis can produce cotton ?rnoH? ..... .. ... . . - est. To relieve the to uso up o7U,000 bales of . pushes the sab' of shoe: per month, but they are pro- . , , ? , priees; and because of th only enough to use up 1 i 5,....... , ness of money other m< es. 1 he worlds lb 18 produc- , , manufacturers push the s grain and vegetables was be- ... , , , .... , , thing else by shading p -0 and Jo per cent below ca- , ... have to do it, because th and its production of sugar ... ... . Ital or hank deposits are out a,000,000 tons, or 2;> per , , , to the limit, and becaur low capacity. , . cannot lend them the am vers in the notion that present , , ov needed. ivels are permanent must tig- ... , , The relationship is ex in some way that all this idle , .... pie. Rising priees abso lpacity and a lot more is going , . .. . more capital; and whet ept idle. It is easy enough to , , . supply becomes exliau hat producers In many lines . . ., prices must necessarily make money by keeping it , producers and merchants ut the ditlicultv is that every . their goods to proven ants the other fellow to cur- r . . . , from becoming insolvent. iduction and put prices up, so ' everv period of tight mo , himself can turn out his full iaMy fo?owed by ? and get big profits on it. The perio(, of fa,|jnK pr|o<,s planters this year tried to cur- ,ustrate this fact from eage by 30 per cent and sue- ence Qf any aj?e Qr na(|o, in cutting it down to only aa recorded financial hisi V4 per cent. Tight money or high i the surest indication that this do nQt ocour exopp( as apacity cannot be kept idle is of 9carcity of capi(al e world has between 15,000.- f?nds; and experience sh d 20,000,000 troops who are monfty market is one of eking re-employment. If they indioe8 t(, the flIture v,r obtain it there will be rioting In recent times in (h,. ( lshevism the world over, and )ho ()n,y four perl<H|8 of a ministry oi government any- we j,ave bad began in cun stand. Rut if they do oh- ipo2. December. 1005, / e employment, idle plants will atwj t.iW- into IC^JI unning again, and the supply course, tight money is ost every conceivable article ately followed by a sh so increased as to reduce modify prices; for merch ducers first finance tlieini only way prices can he kept rowing all they can fron ? keep the plants and lactones they know, and also froii oductng capacity idle, and the (talista. and do not cut ay this can he done is to keep us ia8f resort. This, ho' iliers out of jobs. a delay of only a few wee a pretty good-sized undertak- between the beginning n for those who think that money period and the co rid is going to he made over of the slump in prices. he bull market or to suit the in the 1902 instance ;rs. prices began in Decent! ever, even if there were no law ried Hradstreet's index i tly and demand, or if all the from 8.1413 to 7,6318, rs of idle producing rapacity was reached the follow tally erroneous, we would still 1905 the boom here wa vidence enough in the action means of heavy borr money market to prove beyond rope, so that the slump mable doubt that commodity not begin until March. 1 ods prices are coming down, than a year thereafter it rvels are as closely related to street's index down fro >ney market as one's car 7.7227. Perhaps even i: are to the motor; and al- is the fact that in 1914 the two are not usually resulted in a slump in i f*of together, the hull move th? certainty of a big n goods prices cannot go on * 1 tor goods, from August I the help of the money mary more than the automobile " without its engine. 1\ * | 'Q 1 rices go up it takes more and * ipitu 1 to finance the production ? strihution or goods. For ex- ro do mice, once they eat the tanner must keep on hand And they leave no odor b Iv of hides to meet his own take our word for it ti /'.Oo ....i - * - . .. r i .1 . x ui>i rtliil U?>KM WOI1 I I CM infiiis anci :i supplv of lciitloT .. , pass up all food to ^rot those of his customers. When Three sizes > up from :? > cents a pound to 2."?c. size (I rake) eno ts. as they have during the try, Kitchen or Cellar. tar, his stock of hides costs ,, >**' s'/r t?s cakes) Mouse, coops, or small bit twice as much as formerly. 00 sj/|. (5 rakrs) on pay Tor it he must either draw farm an(j out-bulldings. s is deposits at the hank or else ings, or factory buildings the money from the hank. In Sold and Guaranteed l ? . , . , ii> ... Drug Co. and W. S. Stewi use tie thereby diminishes the ^ of money or capital which his in loan to other business men. - nn/\nnnL<i/iv a r . . ... . , PROFESSIONAL rise In hides puts leather up, ? rise In leather causes shoes inee, and so it happens that DH. J. KRWK FUND le from the tanner to the re- Dental Hurgeo ae dealer is using more and Office Hours: apital <n the management of 8:30 to 12:30 A. le. 2:00 to 6:00 P. S y Interest Itntcs Are Iflgli. And by Appolntir ig the past four months prices Office Phone 160 one up so much that it now Residence Phon s probably about $2,000,000,- Office orer Lancaster ,STER NEWS, LANCASTER. S. C. ig capital to No vein Iter 1, ltradstreet's index v the Aineri-i down from 9.849FV to 8.8620. y goes into rule never fails, because the busit Is, stocks of I man who cannot borrow money n and into the sell goods, to make the Decline Inevitable, e expressed, Illustrations might be multlp 11 movement | from either our Civil war experie prices going or j^e Napoleonic period. I'e< ten must be, have become convinced that li tre an addi- pr|ct!S are permanent merely beca h month or fhoy j,aVe held and rallied since I war ended. The rally, however ates are b?>- imsed upon urgent buying to sat jetting more, j,,,mediate needs, and is nothing ir row in such than has occurred after previ because the'KJ.<ia( wars; and any permanent f< * is running Nation under this high price leve in the world aK iackinfr now as it was then, i; and when previous experiences have shown agents, the Hamf> money inllation, ami a sint heir savings rjsl, wages, and yet prices cannot bor-! come down, is saved out 1 : Admittedly the general aver price level may never get back \vl > commoditv . , ? , it was before the war; but few hid capital runs , | are the thoughtful men who do . . , expect prices to go half-wav I I he shoe and ... ... . . , , within a reasonable tune. I shoe dealer icturer a big Instant response to these econn the highest: factors eannot be expected. The goes to his world is not a movie shov in additional which 'he whole performance is < ie reply that 'n an hour; and the high price le in havw only ,nay eantinue for a few weeks tight everv months, depending upon mono and thus his IU' trade developments. Howe $2,000 else- 'he main points are that the ilure or else ainount of ''lie producing capacit ate of inter- s,,r? Pfoof that there will he a g situation lie' inrro?s" 'he total supply of go. 5 by shading' an<? ",;it the tightness of the mr e same tijght-l n,ar*<?*t equally demonstrates that ?rchants and ',IIU* is no' rar nff when produ aje of every- an<1 merchants w ill he shading pi irices They' hecause of inability to finance th eir own cap-! solves otherwise, drawn down Fn ,iriof- ,h<> ??,ion 'hat the e: ?e the hanks illK I'1'''" level will lie permnnet POISON OAK ... . Wash with weak sotution of blue irtone or W lime water, dry thoristed. goods oughly. follow with light appli- J^ij fall because cation ot" < VICRS YAPORUBi t themselves ~YOUR BODYGUARD** -30*. 60'. * So it is that ney is invar- " considerable ?IRR|H2flIBHBBg One can 11the expert- [0c; i as far back or loanable iows that the QJcj good prices. yS tniteel Slates ?3D] tight money an] September. *3^] t kugust, 1 : 1 4. 0^ j&B actively. Of QJ^ immedl-j iveve'r, causes ye ks or months of the tight gg V?J r M' mmenccmcnt ah] B ^ . __ _ if r or 1 the slump in ^ A A A Iter and oar- (US lumber down ye which figure ing July. In s kept going an] owing in Ku-igS in prices did |f& !M?7. In less [DS carried Brad- 0= m 9.1293 to ? I he owner-prestige w nore striking'? Lexington is due not air tight money an) but also because it has iriees in face tin! war cieman.i The efficiency of the ir?. i; 14, to ^ii ?* a never-to-be-doubte< -IHFii forniance. I ti congest t Pv ? wp through mud or sandy Lft ILi never need worry about ^ Lexington to come t h HAT-SNAI>. ^ Colors. ?*himl. Don't (uk1 y a package. Lexington stiHicic ich it. Hats ?jf.j ., HAT-snap [ijp than its excellence I j[P Equal to all road demur ugh f<?i I an- .jp] ajso adequately fulfills t jr-J f??r chi< ken frjq can he required of a m< ifhling*. Spj o?Kh for all Bjrj) The Lexington has a torage build?.?n] dant speed within reasoi by I .a master kfo usual flexibility, sturd man K Co. t (Ul, . .... , ... . _ rinj addition it has sutncien 4 cjj]| roominess, luxurious < CARDS ap] smart appearance, rich > + 4 bb KKItl Itli. c EVANS , tent. nrp e 62. ^ " (7^'fr7nrpn,T;ri^F'nrp(irpp^[i^rF^.^ Pharmacy. 15J / 1 nt sheer nonsense. There is not a scrr, The of evidence in tin* business situath toss *o sustain it. and it is contrary to a tust the principles of economics, and I all tiie teachings of past experieno Jt is a belief which immediately di lied appear* upon attaining the slighte ,nct, knowledge of the subject. >ple VHMBA1ILK8 s.\ll> TO POH8E8S liKh MKDK'IN'Ab PltOPKItTIi Watercress is an excellent blot purifier. | o ' Lettuce lias a soothing effect t i s f v the nerves and is excellent for suite ,<,r' ers from insomnia, ions Tomatoes itre good for a torpid li l"n" er Itn 1 should bo avoiileit in ' IS People. u> Celery is a fine ihtvp tonic; onioi also art- a tonio for tho nerves. '?ar Spinaoh has greu taperient until tins, anil is far better than medit 1 foi sufforors from constipation 11 ^? Heel root it fattening and good I? teto people who want to put on tlesh leetl Parsnips possess the same virtu* not ilv sarsaparilla. >ack ('ranherrios correct the liver. Asparagus stimulates the kidneys title Itannnas are beneficial to stiff"re lius- from chest complaints. r in Celery eontains su'phiit and hel tver to ward oft rhemnatisni. vels llom y is a pood substitute for c< i or liver oil. tarv The juice of a lemon is excelle ver. for sore tiiroat. It should not vast | swallowed but used as a gargle, y is [ Carrots are excellent for gout. . i iM'iirfi imin .inn lust we-e-k." , v "What is ho doing?" tho I "Learning a now job." <?rs! "'Setting cm all right?" s "Hroke an arm last wo. k. lie to tern- n,? " "Whew 1" "Week he-fore- he- sprain, el an . "Well:" j "One- day 1m- nearly 1.?st an eye- " "1 never did believe in too inn 1 at hlet ie s " ^ "This is different." Wk "In what way?" IW "I ask. <1 Jim w hat he meant 'that kind of c-oneluc-t. anil he- -aid Ok he- holds out long enough he s : o i '-20 |() i,(. a moving picture actor." 2^ MINUTE MAN SIX V5^ ' *r hose Wh Liveable ( on and held hv the is fittingly i ?ne to its efficiency, pleasingly s ; sufficiency. meets all de Lexington consists Economy 1 certainty of per- . . , ... crease ot h< 'd traffic, on hills, roads/ river the MooT? : the ability of the noying s<|in rough with living by the consi 100 separat ncy reaches forth- greater stre of performance. of control i> ids, the Lexington ing, one fin itnt'f niirmvc<? * ?? > v . I rial I I 1.11 >tor car. '' |v ' *'e many other mple power, abun- thatconstiti i, easy control, un- the Lexinjrt ly endurance. In t size, with ample Carload > comfort, refinedly See us and j appoinments. It your car. 'I i & WILSOl LANCASTER, S. ir;|i 1 rapp". rqi =p.rauE(u it. i ? iici Jcjtki' otnwnlai^ntnltriltrOtn pa(;e three ipj A returned soldier tin<1 scare. iy ?n[ pncifd friend wife after his return II from France when she asked eagerly: to "And, dearie, did you bring me a lot e of souvenirs?" s- "Only this little bullet tho doctor st took out of tny side," he answered gravely. "Aw, gee," sighed wifey, "I wisli it had been a German helmet." IS id ' "Hut-Snap Iteats the llest Trap Kvcr III Made," Mrs. laiii'y Shaw Says. r"My husband bought $2 trap I v bought a 50c box of HAT-SNAP The traji only caught rats but HAT'yjSNAP killed 12 in a week. I'm never I without HAT-SNA I*. Reckon 1 tjc' couldn't raise chicks without it." 'RAT-SNAP comes In cakes. Three i sizes. L'ac, 50c, $1.00. Sold and guar!" anteed l?y Lancaster I >rug Co. and \V. te s. Stew man Co. t I t ' DR. W. R. REGISTER Specialist in f Chronic and Nervous . i1 Diseases i of Men and Women. he Piles and Rupture Cured Without Operation or ,, Loss of Time nnil I ntler (itinra ntee. r-h "I 1206 1-2 Main Street >y ne! Columbia, S. C. R^MamagBeag^lsl iQsP^P^ i> i ! afi p.- -i r ? ^ 8 1 0 Want 1 r>? l8 ^ar s llfi correct for all social needs and ^ uitahle in any environment. It [Ug mands at all times. aoj 2ril of fuel and proportionate in- ^ ng >rsepo\ver are eflected through sq) Multiple Exhaust System. An- IfjQl isiks and rattles are banished rue z;\i 1 ruction of the frame, in which PJf-j e parts are eliminated to Rive nn' mirth and lighter weight. Ease ^rJ ? ^ promoieci ?y the* positive act- pjr"! ger emergency brake. am sum of these features with [iHi ffWV s. all in harmonious relation, iarfl P rr-? ute the sutlicienry which makes sni on a trulv liveable car. !Hhl hipped from factory August 1. blj ret a demonstration, and select [^ni 'hey won't stay with us long. j=p Dealers I p phi