Show I What It Means Il I Ili i i A FALLING off in U. U S S. S exports to Europe a gra gradual u l p piling up of f surplus of exportable goods in the United States a move move- to reduce these abnormal stocks stocks lower lower prices to American consumers s mers i These are the results that may logically be expected ted to follow r he e- e ea a abnormal I drops in all European exchange rates ate I Beginning ing Jr l with i h Great t Britain virtual embargoes ma may be expected by many b countries of of Europe on Imports from the United States At abnormally abnor- abnor mally l low w exchange ange rates the flow of goods from A America erica to toi i l Europe is bound to be reduced radically lly The drop in exchange simply f mp y meaDs means that Europe's credit with America has reached the vanishing Shi g p point int Europe cannot pay fo for goods good in gold in se securities uri uri- ties J In in goods and now she cannot pay in m credit any longer The l limit t ha has about been been reached J y The The result will be diminished exports from America At the ti 1 i ir iC nf rates of production in America this exportable surplus surplus' is is o nao 1 d. d pile up on on the shelves of of the manufacturer the whole- whole ff the he j jobber b and t the e. e retailer Then will ill come the inevitable break l. l break ak in m prices es in the United States Certain factors may may delay delay or f. f d' d impede ede this break in prices European nations like Belgium and Ji Great Britain may recover production ability sooner than expected d. d b begin gip to wipe wipe out indebtedness indebtedness' ind with goods strikes strikes and industrial indus indus- trial disturbances in In America may keep production down so that 1 the surplus will not pile up so fast exports may be increased to 11 1 the Uie O Orient and South America but America but in the long run the stoppage of exports to Europe is bound to result in a break in in- prices in the United St States ies TI The cost cost cost of living will go down But there is danger here Tile The sudden drop in the price curve will have a tendency to close dose t factories ries s and mi mills s in America American labor may suffer from J unemployment just as it is getting relief from high prices 3 This Thi is is' the sequence of of economic events which h ou ought ht rea reasonably reason reason- on t ably to follow foIl from the abnormal exchange and export situation Whether it will will follow depends la largely gely the upon go good sense of nY z American merican manufacturers and American labor The United Stat States s Z t is is-in is in a rather frail craft on a rather stormy economic sea and it behooves I everybody to sit tight and not rock the bo boat t. t |