Evening Republican, Volume 23, Number 131, Rensselaer, Jasper County, 31 May 1920 — PROSPECT FOR LOWER PRICES NOT APPARENT [ARTICLE]

PROSPECT FOR LOWER PRICES NOT APPARENT

Washington, May 30.—Despite recent reductions in prices, little relief from the general reign of high prices is seen by the federal reserve . .board in its analysis of May business conditions, made public tonight. The board expressed the view that there has been qo change in the underlying conditions responsible for the high cost of living. Asserting that while “store sales” and a tendency to lower prices bear witness to the presence of “disturbing factors” which suggest , the advent of wide alteration in price levels, the board declares it cannot accept the situation as a whole for its face value. The explanation is added that there has been only a slight increase in production and there is no greater disposition on the part of the public to economize and invest than, had' ruled heretofore. “The changes that have taken place therefore,” the board’s analysis says, “cannot be looked upon as indicating a modification of underlying conditions. They may, however, afford a basis for changes in business relationships that may broaden into more far reaching alteration of the essential price structures.” Business in every section of the country has suffered considerably from the freight jam which has prevented normal movement of products to markets. Effects of the tieup are noticed in the agricultural districts as much as the industrial areas and that farms are not the smallest class which has sought more bank help in the way of credit as a result. Results of the board’s action in the direction of restricted loans already has begun to be evident, according to reports of the various reserve banks. In addition to a general reduction in the value as well as volume of securities traded in the financial centers, there has been a general revision of interest rates affecting both commercial paper and call money, it is stated. The labor situation during the month has been one of the outstanding elements of “doubt and difficulty,” and is one of the larger problems with which the country is expected to have to deal with the rest 6f the summer. In addition to intense shortage of labor on farms and at other points of primary production, notably the textile industry indicating in the board’s view continued unrest. "Wages apparently have fallen behind tne advance in prices and the cost of living” the statement continues. '"The movement of labor from farm to city is continuing. Various demands tor higher wages have been taken under advisement for the purpose of bringing about) compromise adjustments. General' complaint of low efficiency or small I output per unit of labor is prevalent! anu the difficulty of getting skilled labor in some of the more highly developed lines of manufacture is now very considerable.”