MAY 4, 1921

page 40

WHY ARE PRICES STILL
SO HIGH?

yo most of us, at any time, the prin- The Announcement of
cipal problem of life is the cost of
living. Most of us, therefore, will

the Prize Winners in take particular interest in reading the

The Outlook's Second just published reports of the Federal Trade Commission and of the Depart.

Prize Contest is on ment of Labor concerning this matter.

From these reports we note that the retail cost of food and other necessities has not declined as much as has the wholesale price. For instance, comparing wholesale prices with those of a year so as to eliminate undesirable comago, we find that food has declined 39 binations.

Protection of the farmers by exper cent, but the percentage decrease in

tending Federal assistance in giving the retail prices on food was 22 per

more adequate and timely informacent. Thus retail prices have not come tion concerning market conditions down in proper ratio to the decrease in and in affording better market and

storage facilities for the conservation the wholesale prices of raw materials.

of perishable products. With regard to other necessities, we find that clothing has decreased 46 per

We note the absence of any reference cent and farm products nearly 48 per

to the tariff as a panacea for all ills, cent. On the other hand, fuel and light

which is welcome; but we think it ing materials are about 8 per cent higher strange that no emphasis is laid upon than they were a year ago.

the chief of all the causes for the high The causes of the high cost of living,

cost of living—inflation, according to the Federal Trade Commission, are unfair methods of competition; important elements of transportation

MR. LAUCK'S CHARGES and credit; and especially the excessive

CCORDING to the newspapers, Mr. W. price of coal, which also vitally affects the cost of other commodities, to say

railway labor unions, has charged that nothing of the effect upon the health

a "capital combine” has inaugurated a and comfort of the people; moreover,

policy of Nation-wide shut-downs. Mr. the existence of typical corporate mo

Lauck, so it is reported, named about nopolies; open-price associations, tend

one hundred men who, through intering to maintain unduly high prices;

locking directorships, have centered in a interference with the channels of trade

dozen institutions the control of our by distributer and trade associations;

wealth in basic raw materials and in and, finally, conditions with respect to

railways. He is quoted as follows: "This foreign combinations in the international interrelated capital group deliberately markets.

deflated the farms and then undertook, The Commission suggests the follow- by precipitating industrial stagnation, to ing remedies:

deflate labor. The dozen financial insti. Legislation to meet judicial objec

tutions-all of them New York institutions to the Commission's authority

tions-are: to continue its efforts in obtaining and publishing information respect

"The Guaranty Trust Company. ing the ownership, production, distrib

The Mutual Life Insurance Company. uting, cost, sales, and profits in the

The First National Bank. basic industries.

The Equitable Trust Company. Prosecutions under the Anti-Trust

J. P. Morgan & Co. Laws with a view to strengthen them

The Equitable Life Assurance Comto meet present conditions.

pany. Encouragement of co-operative as

The American Surety Company. sociations of agricultural producers

The National Surety Company. and of co-operative organizations of

The Mechanics and Metals National consumers.

Bank. Legislation to eliminate unnecessary

The National City Bank. reconsignments and brokerage opera

The New York Trust Company. tions, including "gambling in futures."

The Chase National Bank." A conference of official representatives of the trading nations to con

Mr. Lauck's summary of the situation, sider the question of clearing the

according to the newspaper reports, was channels of international commerce

to the effect that this "capital combine"

molds our economic destiny; that it has the power to adjust or to misadjust relative prices in a manner to stimulate or to suppress industrial activity; that this "focal capitalist group” has deliberately maintained high prices of steel; cotton, cement, and other basic materia is;” that “the railways, financed by the same interests, have refused to place orders for plant maintenance, or even the orders necessary to prevent plant and equipment deterioration;" finally, that the greater factors in American industry “are all closely bound together by intercapitalist relations and interlocking directorates coming to focus in the house of Morgan." While the railways are pleading poverty, the banks, we read, “are making unprecedented profits and declaring unprecedented dividends, and the same applies to steel, coal, and railway equipment concerns." Finally, the “capital combine,” in preparing to precipitate unemployment, adopted, it is alleged, the policy that the railways "should do it first."

With regard to these statements, The Outlook wrote to the dozen concerns in Mr. Lauck's list. The replies brought were, as might have been expected, denials of the allegations that a combination existed to deflate industry. For instance, Mr. Alvin W. Krech, President of the Equitable Trust Company, says:

The notion that there may exist in this country a league of banking interests to break down the industrial life of the Nation is too silly to discuss, and therefore unnecessary to deny. So far as I know, the large banking interests of the country, and particularly my own company, are doing their utmost in a very difficult situation to maintain and support the Nation's activity. If a denial of the ridiculous charges said to be made ... is necessary, you may make it as emphatic as the English language can frame it. ... The charge probably developed from the loose talk originating with Senator La Follette.

Another President, Mr. Charles H. Sabin, of the Guaranty Trust Company, said:

So far as the Guaranty Trust Company is concerned, the statement reported ... is absolutely and unqualifiedly false. ...

Neither I nor any of my associates ever heard of such an alleged combination. Mr. Lauck's statement that New York banks have combined to cause the spread of unemployment is also utterly false.

Any observer of the general economic situation must be aware that the existing industrial depression ...

and wool trusts; that the amount of the Government has entered into in many
import taxes will be added to the price years.
the consumer pays—according to the With the Colombian Treaty the Gov-
Democratic minority, some $2,000,000,000 ernment hopes to buy the unpurchas-
would thus be added to the cost of liv- able commodity of good will. There
ing; and finally that, if we want to help are Senators, too, who hope to secure
Europe to settle her debts to us, we must from the payment of this money certain
be prepared to buy from her; and, as commercial advantages for America
Europe can pay only in goods, we can- which are unspecified in the treaty. We
not be paid unless we welcome the com- are paying twenty-five million dollars in
modities which we need and which Eu- the hope that the Government to which
rope is prepared to send to us; and it is paid may endure long enough to de-
therefore we should avoid any possible liver goods which it has not promised
display of sectional or National selfish- to deliver. As a guaranty of the fulfill-
ness.

ment of this lively expectation of favors The Fordney Tariff is frankly experi. to come we are relying upon the faith mental and temporary. It has the merit of a Government which has proved faith.

less in the past. The chance is one
which would hardly interest even a mod-
erately cautious gambler.

6

is due to post-war, world-wide con-
ditions, and that if capital went on
a "strike" against society it would
be striking against itself. . . . Capitale
which is composed of the savings of:
all classes, would have more. to lose
than would labor. .

No institutions or organizations in this country have struggled harder against difficulties to preserve the financial, industrial, and commercial stability of the country throughout this period of world-wide reaction and economic readjustment than have the banking Institutions of New York. ... The burden of the situation has fallen far more heavily upon capital than upon labor. The values of securities and commodities have been deflated ... far more than have wages.

Mr. Lauck, it would appear, has charged the financial interests with biting off their nose to spite their facea surgical operation which they are not in the habit of performing.

and wool trusts; that the amount of the
import taxes will be added to the price
the consumer pays—according to the
Democratic minority, some $2,000,000,000
would thus be added to the cost of liv-
ing; and finally that, if we want to help
Europe to settle her debts to us, we must
be prepared to buy from her; and, as
Europe can pay only in goods, we can-
not be paid unless we welcome the com-
modities which we need and which Eu-
rope is prepared to send to us; and
therefore we should avoid any possible
display of sectional or National selfish-
ness.

The Fordney Tariff is frankly experi.
mental and temporary. It has the merit

Government has
years.

With the Colom
ernment hopes to
able commodity 0
are Senators, too,
from the payment
commercial adva
which are unspeci
are paying twenty.
the hope that the
it is paid may endi eng enough to de-
liver goods which it has not promised
to deliver. As a guaranty of the fulfill-
ment of this lively expectation of favors
to come we are relying upon the faith
of a Government which has proved faith.
less in the past. The chance is one
which would hardly interest even a mod-
erately cautious gambler.

H

F

SEASON

IS THIS MAKESHIFT
LEGISLATION ?

HE House of Representatives has

repassed the Fordney Emergency Tariff Bill. All tariff bills are given the name of the Chairman of the Ways and Means Committee in the House of Representatives—as, for instance, the Ding. ley Tariff, the Payne Tariff, and now the Fordney Tariff.

From the quick and emphatic Republi. can vote which the Emergency Tariff Bill received in the House one might expect that it would go through the Senate International with proportionate speed. The tendency there, however, to pass makeshift measures is not as great as it is in the House. Doubtless most of the proponents of

of recognizing the claims of one great the measure believe that the addition of body of producers who have been genimport duties on agricultural products erally overlooked in protective tariff will check the importation of those prod- legislation, and who, in the interest of

the whole country, should not be ignored. ucts at a time when their prices have been declining rapidly; that an emergency law, operating three months (the OIL BEFORE HONOR—AND NO period provided for by the present bill), ASSURANCE OF THE OIL will help the farmer by relieving the

passed the Colombian Treaty on the general situation. Certainly no April 20 by a vote of 69 to 19. group was harder hit by the recent Senators who voted against the treaty sharp decline in wholesale foodstuffs included 15 Republicans and 4 Demoprices than that of the farmers. The crats. The Republican Senators were Fordney Tariff, moreover, provides Borah, Capper, Johnson, Jones of Washagainst the practice of "dumping”—that ington, Kellogg, Kenyon, La Follette, is, selling foreign goods cheaper than Lenroot, McNary, Nelson, Norbeck, Northey are sold in the country of their ris, Poindexter, Townsend, and Wadsorigin, and prevents scaling of present worth. The Democrats were Senators tariff duties by valuations made in the Dial, Reed, Simmons, and Watson of depreciated currencies of Europe. Georgia. Senator Cummins, Republican,

The opponents of the bill, on the other and Senator Tramwell, a Democrat, hand, who are strong in the Senate, were paired against the treaty. believe that it has been drawn for its We publish these names as a roll of political rather than for its economic

honor. effect; that it will benefit chiefly the This list of names may also be said to speculators who are holding large quan- constitute not only a roll of honor, but a tities of farming products which they roll of intelligence, for these Senators

+ before the decline in prices; that were the only ones who voted against

The interest of the sugar, meat, the poorest bargain which the American

BASEBALL PUT ON TRIAL

HE opening of the professional base.

ball season has shown by the crowded grand stands and the full-page newspaper reports that the American lovers of the game (rooters and fans, in the language of the bleachers) have not lost their interest because of the scandals and crookedness of last year. Baseball has been given a chance to establish itself in public confidence as clean sport. "In a very real sense,” says the New York “Tribune," "baseball is starting fresh, with a new lease of life and a revival of good will and old-time zest and applause."

All the more, therefore, serious responsibility rests on managers and on Judge Landis, now the supreme arbitrator in baseball law and ethics. If baseball is to remain truly the National game, it must not be allowed to be used by gambling syndicates and bribe-givers.

At the opening of the season Judge Landis issued a statement to the players. He told them frankly that every player who makes an error in a game or who fails to play up to the standard expected of him will fall under suspicion. There are charges even now circulating that baseball players are planning to make money out of their own misplays. Hugh S. Fullerton in the New York "Evening Mail” recounts some of these charges. One, for instance, is that the team to win this year's pennant is already decided upon. Another is that a pitcher is to get money for home runs made off his pitching. Certain of these stories Mr. Fullerton has himself disproved. The chances are that none of them are true at all. The fact that they are circulating, however, is an indication of the state of mind of the people who patronize ball games.

There is a strong feeling that the ex. posures of last year were not followed by sufficiently severe and drastic punish

HE

pinch, and, indeed, will help to steady T passSenate

, after a bitter debate,

The

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