CONFLICT AND RECONSTRUCTION 
67 
THE INDUSTRIAL BREAKDOWN OF 1920-1921 
Irrespective of these decisions, however, industrial 
unrest grew in intensity and in extent. The primary cause 
was the skyrocketing of prices. Altho real wages rapidly 
declined, employers and public officials declared that high 
wages were the fundamental cause of high prices. Wage 
earners in turn contended that there was no relation be- 
tween wages and prices. In the course of wage contro- 
versies, the unions also disseminated data to show that 
producers and distributors were exploiting consumers and 
unjustly putting the stigma on labor. 
Finally, the consumers rebelled. They refused to buy 
longer at the high prices, and this determination, as 
popularly expressed in “the buyers’ strike,” led in large 
part to a nation-wide commercial and industrial collapse 
in the latter part of 1920. Manufacturing plants, includ- 
ing the basic industries, suspended operations, and indus- 
trial workers were thrown out of employment. Orders for 
commodities were cancelled. Surplus stocks were liqui- 
dated at ruinous prices, and widespread failures occurred 
in the retail and wholesale trades. The extent of the 
breakdown was further aggravated by the inability of 
foreign markets to buy American products, and by the 
abrupt falling of prices for farm products, accompanied 
simultaneously by a collapse of agricultural values and 
purchasing power. 
DEFLATION OF WAGES TEMPORARILY ADOPTED 
These adverse conditions produced immediately two 
warring sets of views as to the policies to be pursued for 
the rehabilitation of trade and industry. Manufacturing, 
transportation, and business interests, considered as a 
whole, claimed that there must be a drastic cutting down