"Boot and shoe production for civilian use was unfavorably affected by the war and has likewise undergone extreme curtailment since the signing of the armistice.
HOUSING PROBLEM
"6. Housing facilities developed acute shortage through curtailment of building during the war and, due to curtailment, for many months following the armistice, of the production of building material and of building construction, housing is still far below normal. Rents continue to rise.
PROVISION OF NEW CAPITAL
"7. The first half of 1919 shows diminished production of raw materials and subnormal construction of new capital, and thus indicates failure to utilize an adequate proportion of our productive forces in the preliminary processes of provision to meet future requirements. In fact, due to business uncertainty and hesitation and tendencies to disagreement between productive groups, retailers, wholesalers, manufacturers, labor, etc., there ensued after the armistice a disuse of a large proportion of America's productive capacity. Unless this slump in production is atoned for by consistent future activity, and unless production is constantly maintained on an adequate scale, reduced standards of living will become inescapable, regardless of prices, whether they rise or fall.
"8. The very fact that prices of finished commodities, consumption goods, so called, have risen to an extent out of proportion to the rise in prices of raw materials and perhaps out of proportion to the rise in general wages, indicates that production and distribution carried on under these conditions is, in general, yielding profits abnormally high."
In corroboration of the preceding analysis, the report cites statistical data gathered from various sources. The relation of currency and credit to prices is admirably epitomized in the following extract:
CURRENCY AND CREDIT
"The manner in which the volume of circulating credit and currency is related to the war-time rise in prices is about as follows:
"The outbreak of the war brought to America urgent government orders for munitions and supplies. Inasmuch as the belligerent governments could not brook delay they were obliged to pay the increased prices which American producers found it possible to demand, and thus the wave of war prices was started in America. When America entered the war it required, in order to perform its part, almost boundless quantities of equipment and man power. Producers naturally took advantage of the extremely urgent character of these demands in order to increase their prices, and, as a natural sequence, wages began to advance. These increased prices and wages of course necessitated larger expenditures by the government.