Hammond Times, Volume 15, Number 21, Hammond, Lake County, 15 July 1921 — Page 9

Friday, J ul v'lo, 1D21 .

THE TIMES. Page Nine

JimmmmliMgtJmaffe to Imrki mmuims lit

By FANCIS H. SISSON, li'ice President Guaranty Trutt Company of New York. THE fact that we Amerh-aus have not awakened to the complete meaning of our new place in world nfTnirs nd of th reactions here of International economic forces Is made evident on everr hand. Only very recently, for instanre, farmer organizations petitioned the President ind the Interstate Commerce Commission to readjust railroad rates to pre-war basis and they have brought pressare to bear on Congress to pass ati emergency tariff. The. farmers

have also sought the President's aid , disaster to the railroads and eventfor a eeneral decrease in Federal ' "ally to the commerce of the

Reserve Bank rediscount rates based n farm commodities and a lare increase in Federal Reserve notes. A bill has been Introduced In the house of representatives proposing to limit the interest chargeable by the Federal Ite-serve banks. Organized labor is seeking to maintain war-inllated wajes and special privileges, seemingly unconscious of the fact that the international po- j litical and economic forces which ! made those waxes and privileges I possible have been replaced by equally irresistible forces of deflation. While we have made many important readjustments since the peak f inflation in May of last year, we ver

Spept for Co

ifcnve not ncoomplheil the mo !m i portant of all ni.'Mul re;nljust

ment to the stuM.orn and incscapa-1 m?mmW

ble facts in the case. Itail rates are unquestionably too hUh 1" instances, not only for the welfare of business generally, but also for the best interests of the railroads themselves. There they should be reduced. But the farmers and business men who are olamorir.i; for a jrer.eral readjustment of these rates t a prewar basis should realize that they are demand'.nir drastic acting on the part of the Interstate Commerce Commission which would mean financial country. It should be evident to all that to reduce rates without first reducing railroad operatlni; costs would lie calamitous. Operating costs, however, cannot bo greatly lowered so long as ti". per cent of railroad revenue is absorbed in waxes, as contrasted with only 4:5 per cent in UH7. So. in tlie final analysis the farmers' quarrel is not with the railroad managements but ih

Kail rates are unquestionably too 111 ! PoosPEorrv

ganized railroad labor, whicji isop-ivanie

posui? a reduction in the largest item of opruting cost and therebv t penalizing the farmer and all other producing interests in the. country. At the level established by the in-J

for the building and reconstruction of our new , plant on Summer Boulevard this year.

or-r i

was spent right here in the Calumet District with material dealers, contractors and union labor the people who patronized and helped us.

of Marland high-grade gasoline sold the first six months this year twice as much as sold in the same period last year when we sold Texaco products. There's a reason ! v

rHMIM2,. If

creased wae award of l!)'r railro;id waes represfiited an increase 'of l.'tO per cent over l'Jlo. while tl;e j cost of livlnx. as estimated by tiie I National Industrial Conference Board, was only '.xi per cent, above the cost of Hvinx licure for 1!U.". The annual return on railroad lnveslment for the last eleven years proves that the railroads did not profiteer durinx the war and l after-war periods. On the contrary, ! their return steadily declined, while ' the earnings of railroad employees were uiountin.x by no less M.un two biilion dollars in three years. This hurt use in payroll was t compeiiI sate for the increase in the cost j livinx. But the railroad investor

or-;V.as not only compensated in the

depreciated dollar that the i w -rkinxman found to be wor'h only! fifty cents in purchasing power, but ; the investor received fewer dollars. ! Bailroad dividends declined from nn aggrexate of thiee hundred and twenty million dollars in 1917 to

g Sm?irXW iJ

SiSIFUCOOH

rths or this

I mi Dy.ueiiig 3 4 Si? 3 Stor:

ffl AHrlOND, INDIANA

two hundred and sttfu'.T elr.t million dollars in 120. lhirinx that period railroad waxes, however, increased from one billion seven hundred and thirty-nine million dollars to three billion sixty million dollars. The throwinx up of tarilT harriers for which the farmers plead v.iil, in the end, hot only fail to accomplish its purpose the hetterinx of the farmers' condition hut will do the it opposite. And the crux of tills misconception lies in the failuie of the advocates of the l.'meruency Tariff Bill to realize that this country has' been transformed frm a debtor to the leadinx creditor nation of the world. Actual relief of the present condition can come only through the

creation of new markets and outlets for the products of the farmer and not by artificially niereasinx the prices (1f goods entering into domestic consumption. Tins result can he accomplished best by opening up our foreign markets to take mm ivs so

m 25 X2 L3. XjE

1775 B

But

You b

nt ppojdupox each

over our surplus supplies. The future prosperity of the country depends largely upon our activities in foreign fields of commerce, and a policy so archaic and provincial as to shut off our commercial intercom se with the world cannot remedy the unfavorable conditions against which we are now fighting. A systematic campaign to bring about lower Federal lleserve discount rates and to increase the volume of our currency has been launched. The specilic objectives sought are a general decrease in rediscount rates based on farm commodities from 7 to 0 per cent and an increase of one and three-quarter billion dollars In Federal1 Reserve Notes. There has also been referred to the Ilousy Committee on Banking a bill which would limit the interest chargeable by the Federal Uesene Banks to 5 per cent per annum. WlnH!.v aside from the question of whether paper based ou farm arre

Is of Moorhe

sold to date this year as against 936 barrels sold in the same period in 1920. . o a Mile Out of My W ay to Get MarGas and Moorhead Oils that is a familiar phrase heard every day from people who use our products.

You Don't Have to for practically every garage owner, automobile dealer and supply man that you care to stop at is a Marland-Moorhead filling station.

Them a BOOST and Us Too

commodities merits 8 preferential rediscount rate, the fundamental mistake lies in the effort to bring political pressure to bear on the Federal Reserre Board, which should be as free from such considerations as tie United States Supreme Court. The policies of the Federal Reserve Board must be determined by the economic factors alone. The passage of the bill which proposes to limit Interest rates of the Federal Reserve Banks would automatically revive currency inflation and deprive the Federal Reserve Banks of all power they -now possess for controlling Inflation, The inevitable result would be to recreate conditions which could precipitate money panics, one of the cnief things th Federal Reserve System was designed to prevent. After passing through the throes of monetary inflation, and Its resultant vicious circle of ever soaring prices and costs the country's actual circulating medium was decreased only one hundred and twenty rive million two hundred and ninety-two thousand dollars retween April 1, IV-O. and the corresponding date of this year. To add one und three-quarter billion dollars to Federal Reserve Notes would not relieve the financial condition of the farmer or business man. but, on the contrary, would Jeopardize it even more through reviving currency inflation and M its attendant evils. Mere productivity

ad Oils

and more thrift, not more Inflation, are demanded In this country today. We must not teke a backward step. We must go on -lth the necessury readjustments ivntll they have heen completed. We cannot have stabilized conditions otherwise. Our farmers must reyiember that, while they have borne the brunt of deflated prices so far and the average price paid to the producers of the principal crops In this country on April 1 was 55 per cent lower than a year ago the forthcoming crop will be raised cheaper than the last by about 113 per cent. The supply of farm labor In Aprii was t3 ir cent normal as compared with 72 per cent In April, 1020, and S4 per cent In April, 1919, and wages are from 25 to 35 per cent less than last year. In the end the farmer will profit most by not seeking to increase the price of his products by artificial means and economically unsound devices, but by exerting his powers to effect a readjustment of commodlty'prices and production costs to a fair, stabilized basis. Hi trouble today chiefly maladjustment, and the solution of the problem is balanced readjustment. The farmer has most to gain finally by producing as much primary wealth us his tend will yield. I'rosperity is essentially based on production. And if the period of deflation through which we are passing hai taught our business men anything It should have impressed upon them the absolute necessity for adequate financial reserve to take care of the "lean" years that follow the 'fat" years. Many business interests have depended too much on the banks in the last year to meet exceptional situations because those interests did not have foresight to create sufficient surplus for just such exigencies as occurred and were long foreshadowed. We musf also understand the necessity that rests upon all of us f work out our salvation on a basis of values. Our principal difficulty Is that all of us hare not visualised that cardinal fact. "" But. after all, the enactment of emergency tariff legislation, the changing of taxes, the return to inflation, the reduction of railroad rates and other similar measures advocated today us panaceas of our economic ills cannot solve our problem. They could not materially bet. ter domestic conditions even were all of them sound and safe which they are not because the real reason for our present depression lie In international economic paralysis. Our task, therefore. Is to help speed world stabilization, and the sooner we appreciate the duty as well as opportunity the quicker we dissipate the deprvs.Mon that retards business activities In this country. We must aid far more than we have In putting Europe buck to work.