1920 TO BE A YEAR OF GREAT PROSPERITY, STATES CARVEN

A year of prosperity is ahead of us, according to T. N. Carver, Professor of Political Economy at the University. "There is no reason why 1920 should not be a very prosperous year," Professor Carver states. "A panic is very unlikely and undoubtedly will not take place unless some gross mistake is made with the national financial resources; and such a possibility is extremely unlikely.

"Due to the suspension of much of the European industry during the war, our foreign trade has been greatly augmented consequently taxing our industries to the limit. Europe will snatch up our products so fast there will be no opportunity for a slump."

When asked by a CRIMSON reporter whether there would probably be a tendency toward the lowering of the present high wages and high prices, Professor Caryer replied, "For the immediate future probably not. The high prices at present are due to the fact that the demand fax exceeds the supply. As fast as articles are produced they are bought up by eager consumers who are willing to pay extravagant prices in order to get the products.

Greater Production Threat to H. C. of L.

"Until European production speeds up enough to take away the great demand for our products, and until our own production is increased sufficiently to meet a part, at least, of the enormous demand, the high prices will prevail. Even then, however, they will decline very gradually and there is no prospect of an early lowering in prices. When Europe can take care of her own demand, she will then be able to underbid us in our markets and furnish goods at a lower price, for in Europe there are no such exorbitantly high wages paid as there are here."

In speaking of the return of European production to normal conditions, the economist said, "The effects of the great war will be noticeable in Europe for as much as a hundred years, and until their great national debts are paid off, their industries will probably not come fully back to normal; and this may mean fifty years. I don't mean to say, however, that their industries will be severely crippled for fifty years. They will be bearing a burden which gradually they will throw off."

Professor Carver stated that there is considerable danger of a great flood of emigration to this country due to the prevailing high wages here and the low wages abroad. "Of course we have our literacy restrictions," he commented, "but unless some other measures are taken American immigration will pass all bounds, and I think it very probable that such steps will be taken to prevent a flood of foreigners coming to this country.

"Periodic Crisis" Theory Untenable

"Some people think that a commercial crisis is due this yea on the grounds of the periodic theory, as we have not had a crisis for ten to twenty years. There is little reason for seriously considering this theory. For according to it a crisis was due several years ago. Conditions are constantly changing especially during the last few years and it is absurd to believe in a theory as old and as much ridiculed as the periodic theory."

Professor Carver commented on the economic results of the year 1919 as follows: "1919 has been a very peculiar year, and in many ways it has been a very prosperous year. Following, as it did, directly on the great war, there were conditions to be met and problems to be solved which had never been confronted before. Prices and wages both soared-to the advantage of some; to the detriment of others. Those who were most prosperous during the past year were the producing class, the heads of great industries. These men reaped enormous profits, charging practically any price for their goods that they close, in spite of the fact that they had to pay out great wages. The wage earners constituted the second group that benefited financially last year. These could afford to pay the soaring prices for their wages in most cases kept stride with or even ahead of the cost of commodities.

"Those that suffered during 1919 were the salaried people and those who lived on the income from fixed investments. Salaries, for most people living in this way rose but little, while those deriving their source of living from investments saw the cost of living jump upward while their income remained the same.

"This exaggerated condition will not continue for long, I expect," concluded Professor Carver. "With the increase in European production and the equalizing of demand and supply we will gradually reach the normal conditions which existed before the war."