MAY 4, 1921 WHY ARE PRICES STILL SO HIGH? T O most of us, at any time, the principal problem of life is the cost of living. Most of us, therefore, will take particular interest in reading the just published reports of the Federal Trade Commission and of the Department 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 ago, we find that food has declined 39 per cent, but the percentage decrease in the retail prices on food was 22 per cent. Thus retail prices have not come down in proper ratio to the decrease in the wholesale prices of raw materials. With regard to other necessities, we find that clothing has decreased 46 per cent and farm products nearly 48 per cent. On the other hand, fuel and lighting materials are about 8 per cent higher than they were a year ago. The causes of the high cost of living, according to the Federal Trade Commission, are unfair methods of competition; important elements of transportation and credit; and especially the excessive price of coal, which also vitally affects the cost of other commodities, to say nothing of the effect upon the health and comfort of the people; moreover, the existence of typical corporate monopolies; open-price associations, tending to maintain unduly high prices; interference with the channels of trade by distributer and trade associations; and, finally, conditions with respect to foreign combinations in the international markets. The Commission suggests the following remedies: Legislation to meet judicial objections to the Commission's authority to continue its efforts in obtaining and publishing information respecting the ownership, production, distributing, cost, sales, and profits in the basic industries. Prosecutions under the Anti-Trust Laws with a view to strengthen them to meet present conditions. Encouragement of co-operative associations of agricultural producers and of co-operative organizations of consumers. Legislation to eliminate unnecessary reconsignments and brokerage operations, including "gambling in futures." A conference of official representatives of the trading nations to consider the question of clearing the channels of international commerce The Announcement of the Prize Winners in The Outlook's Second Prize Contest is on page 40 so as to eliminate undesirable combinations. Protection of the farmers by extending Federal assistance in giving more adequate and timely information concerning market conditions and in affording better market and storage facilities for the conservation of perishable products. We note the absence of any reference to the tariff as a panacea for all ills, which is welcome; but we think it strange that no emphasis is laid upon the chief of all the causes for the high cost of living-inflation. MR. LAUCK'S CHARGES A CCORDING to the newspapers, Mr. W. Jett Lauck, the "economist" for the railway labor unions, has charged that a "capital combine" has inaugurated a policy of Nation-wide shut-downs. Mr. Lauck, so it is reported, named about one hundred men who, through interlocking directorships, have centered in a dozen institutions the control of our wealth in basic raw materials and in railways. He is quoted as follows: "This interrelated capital group deliberately deflated the farms and then undertook, by precipitating industrial stagnation, to deflate labor. The dozen financial institutions-all of them New York institutions-are: "The Guaranty Trust Company. The Equitable Trust Company. The Equitable Life Assurance Company. The American Surety Company. The National City Bank. Mr. Lauck's summary of the situation, according to the newspaper reports, was 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 materiais;" 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 . . . 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. IS THIS MAKESHIFT HE House of Representatives has Trepassed 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 Dingley Tariff, the Payne Tariff, and now the Fordney Tariff. From the quick and emphatic Republican vote which the Emergency Tariff Bill received in the House one might expect that it would go through the Senate 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 the measure believe that the addition of import duties on agricultural products will check the importation of those products at a time when their prices have been declining rapidly; that an emergency law, operating three months (the period provided for by the present bill), pinch, and, indeed, will help to steady the general situation. Certainly no group was harder hit by the recent sharp decline in wholesale foodstuffs prices than that of the farmers. The Fordney Tariff, moreover, provides against the practice of "dumping"-that is, selling foreign goods cheaper than they are sold in the country of their origin, and prevents scaling of present tariff duties by valuations made in the depreciated currencies of Europe. The opponents of the bill, on the other hand, who are strong in the Senate, believe that it has been drawn for its political rather than for its economic effect; that it will benefit chiefly the speculators who are holding large quantities of farming products which they bought before the decline in prices; that it is in the interest of the sugar, meat, 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 Iwould thus be added to the cost of living; 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 cannot be paid unless we welcome the commodities which we need and which Europe 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 experimental and temporary. It has the merit International JUDGE LANDIS OPENS THE BASEBALL SEASON of recognizing the claims of one great body of producers who have been generally overlooked in protective tariff legislation, and who, in the interest of the whole country, should not be ignored. OIL BEFORE HONOR-AND NO HE at, after a bitter debate, passed the Colombian Treaty on April 20 by a vote of 69 to 19. The Senators who voted against the treaty included 15 Republicans and 4 Democrats. The Republican Senators were Borah, Capper, Johnson, Jones of Washington, Kellogg, Kenyon, La Follette, Lenroot, McNary, Nelson, Norbeck, Norris, Poindexter, Townsend, and Wadsworth. The Democrats were Senators Dial, Reed, Simmons, and Watson of Georgia. Senator Cummins, Republican, and Senator Tramwell, a Democrat, were paired against the treaty. We publish these names as a roll of honor. This list of names may also be said to constitute not only a roll of honor, but a roll of intelligence, for these Senators were the only ones who voted against the poorest bargain which the American Government has entered into in many years. With the Colombian Treaty the Government hopes to buy the unpurchasable commodity of good will. There are Senators, too, who hope to secure from the payment of this money certain commercial advantages for America which are unspecified in the treaty. We are paying twenty-five million dollars in the hope that the Government to which it is paid may endure long enough to deliver goods which it has not promised to deliver. As a guaranty of the fulfillment of this lively expectation of favors to come we are relying upon the faith of a Government which has proved faithless in the past. The chance is one which would hardly interest even a moderately cautious gambler. BASEBALL PUT ON TRIAL HE opening of the professional base Tua pension of the whole tio er wasd 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 exposures of last year were not followed by sufficiently severe and drastic punish 6 is due to post-war, world-wide conditions, and that if capital went on a "strike" against society it would be striking against itself. . . . Capital 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 I 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. IS THIS MAKESHIFT HE House of Representatives has Trepassed 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 Dingley Tariff, the Payne Tariff, and now the Fordney Tariff. From the quick and emphatic Republican vote which the Emergency Tariff Bill received in the House one might expect that it would go through the Senate 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 the measure believe that the addition of import duties on agricultural products will check the importation of those products at a time when their prices have been declining rapidly; that an emergency law, operating three months (the period provided for by the present bill), will help the farmer by relieving the 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 living; 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 cannot be paid unless we welcome the commodities which we need and which Europe 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 experimental and temporary. It has the merit International JUDGE LANDIS OPENS THE BASEBALL SEASON of recognizing the claims of one great body of producers who have been generally overlooked in protective tariff legislation, and who, in the interest of the whole country, should not be ignored. OIL BEFORE HONOR-AND NO HE Senate, after bitter debate, pinch, and, indeed, will help to steady passed the colombian Treaty, the general situation. Certainly no group was harder hit by the recent sharp decline in wholesale foodstuffs prices than that of the farmers. The Fordney Tariff, moreover, provides against the practice of "dumping"-that is, selling foreign goods cheaper than they are sold in the country of their origin, and prevents scaling of present tariff duties by valuations made in the depreciated currencies of Europe. The opponents of the bill, on the other hand, who are strong in the Senate, believe that it has been drawn for its political rather than for its economic effect; that it will benefit chiefly the speculators who are holding large quantities of farming products which they before the decline in prices; that he interest of the sugar, meat, April 20 by a vote of 69 to 19. The Senators who voted against the treaty included 15 Republicans and 4 Democrats. The Republican Senators were Borah, Capper, Johnson, Jones of Washington, Kellogg, Kenyon, La Follette, Lenroot, McNary, Nelson, Norbeck, Norris, Poindexter, Townsend, and Wadsworth. The Democrats were Senators Dial, Reed, Simmons, and Watson of Georgia. Senator Cummins, Republican, and Senator Tramwell, a Democrat, were paired against the treaty. We publish these names as a roll of honor. This list of names may also be said to constitute not only a roll of honor, but a roll of intelligence, for these Senators were the only ones who voted against the poorest bargain which the American BASEBALL PUT ON TRIAL HE opening of the professional base 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 |