162 UNIVERSITY OF ILLINOIS 



on reduced schedules; and the total wage fund perhaps is reduced 

 fully as much as is the farmer's income. 



I cannot, in this brief paper, take the time to enter upon a dis- 

 cussion of what seem to be the chief causes of this contradictory state 

 of affairs in our industrial life. It is significant, however, to note that 

 practically all classes of men seem now to agree that before we can 

 have anything like a return to normal business conditions, prices of 

 all important commodities must at least approximate a common level. 



Whether this leveling of prices is to be brought about by raising 

 the price of farm products, copper, rubber, sugar and other essential 

 commodities which are substantially below the level of general prices ; 

 or whether it is to be brought about by scaling down the price of other 

 products to the price level of the products mentioned, depends largely 

 upon whose opinion is sought. The farmer wants higher prices and, 

 for once, nearly everyone seems to be agreed that he should have what 

 he wants. All seem to be in favor of the plan. Except for the fact 

 that it does not work it seems to be entirely satisfactory. 



The farmer would no doubt, as a matter of first choice, have his 

 prices boosted to the level of industrial prices and wages. If he can- 

 not have this, he wants lower prices for the things which he desires 

 to buy. In this, however, he seems as yet to have enlisted only partial 

 cooperation from manufacturers, merchandisers and wage earners. 

 Meanwhile he sits tight, reduces his expenditures to the minimum, in 

 the main because he has little to spend after paying interest, rent, 

 taxes, wages and meeting other necessary expenses. He waits, because 

 he must, for the steady but unrelenting economic pressure in the situa- 

 tion to teach other industries that only normal production of goods 

 made on wages and sold at prices that will move them into consump- 

 tion can bring general prosperity, and that much-to-be-desired state 

 which President Harding calls normalcy. 



If we agree that prices must reach a common level before we can 

 have general prosperity, a doctrine which seems now to be somewhat 

 generally accepted, it is highly important that we try to estimate as 

 accurately as possible whether farm prices will go up, whether other 

 prices will come down, or whether these two sets of prices will meet 

 at some point between their present levels. 



In attempting to predict what will probably happen to prices, I 

 can take the time to set down only a few of what seem to be the more 

 important facts bearing on the problem. We know, for example, 

 that the production of the cereal grains in the United States has been 

 considerably above normal during the past three years. Three sue- 



