RE ADJUSTMENT IN U.S.A.

Press, Volume LVII, Issue 17109, 2 April 1921, Page 14

RE ADJUSTMENT IN U.S.A.

PRICES STILL FALLING

(from otm ovrs cormspondzxt.)

SAN FRANCISCO, February 1-5

Prices are still falling rapidly in North America, but many preventives exist causing the actual consumer to be denied the advantages such as should accrue from this deflation ten-dency;-and the general public have tfoi overlooked the opportunity to angrily voice their opinions on the vexatious subject.

The outstanding facts in the downward trend of pricey is the conscienceless resistance the retail dealer makes against an admitted situation, and its inevitable outcome. When the slump Iwgau the farmer, being a producer of food and raw material, was naturally the first to be hit by the movement. The manufacturer in some cases shut down his mills ii'ud proceeded to liquidate on his high-priced stocks of madeup!, goods, but all the time facing the inevitable fact that lie would have to sell Lhcm at what he could obtain for them, regardless of the cost of production.- The jobber, tpo, saw the difficulty of the position, and proceeded to "get from under" as easily and as .quick!}' as possible. The retail dealer was the slowest to act, to bring his bminess in line with the price adjustment'necessary in the return, to what President Harding is pleased to designate "normalcy." In many cases this self-same retailor is yet holding out for high prices, and he U being denounced 'n no unmeasured terms throughout the country by the for retarding th? wheels of readjustment and a return to normal" times. The- . retailer claims that ho is "entitled to dispose of his stock on hand before' offering goods at lower price levels. Frankly, he is not willing to take his medicine if he can avoid it, although only recently it was his class who filled the daily' Press with flaming advertisements talking of 'returning to- pre-war prices, and was the class who first referred to taking the "medicine."

Preying upon the Consumer,

AVholesale prices of -wheat, corn, beef, cotton, sugar, coffee, wool, leather, rubber, copper, lead, steel, and other commodities have come down, but the consumer is still paying more for flour than he did last year: coffee follows the same example, and in the ca'se of sugar, cotton goods, woollens, shoes, rubbers, and household-utensils, the re-diiction-3 do not in general reflect faithfully the'cuts which producers, manufacturers,, and wholesalers have accepted. • Thi-J state of• affairs has : resulted in ah attitude on the'part of the buying public that corresponds to the .efforts of the retail merchant to save himself with the result.that the ultimate consumeps aro buying at this, time as little as possible. Tho self-stint 'is -almost equal to that of war times when tho people were glad to wear patches on their apparel and did without sugar and bacon that the soldiers and Allies might be cared for. _, ' '•_'- The present conservative buying" :s a vivid illustration of how America's usual volume of business is made up largely of the.things people do not actually need. The old question as to what aro luxuries and what are necessities is now a very debatable one, but in his zeal to swat the profiteer for past injuries, the consumer is shedding a lot. of • illumination upon the controversy, with the consequence that * the list or luxuries gets larger, and the necessities smaller.

•; Everybody recognises the foibles of the cuuning;retauer>'\s:ho, in daily advertising, has been-"emphatically asserting that he .has reduced, his stock' to "pre-war prices," but the wary. prbß-_ poctive. purchaser 'has been, speedily "wised up,'' as Americans epigramatically term it. The consumer has quickly discovered that the ..prices were at least -50 per cent, above., "pre-war prices," and he has refused to purchase. ' Furthermore, there is a "'sneaking" belief that nruch of this class of foods displayed in "clearance sales" aa been specially manufactured, and is of shoddy quality, especially in drapery, and clothing emporiums. In these alluTine advertisements such terms as "all wcpl," ''pure linen," 'imported direct frpm England,'' have been bristling, but."' tho general • public recently has become sufficiently educated to discern between the real article and the inferior substitute, and, as already stated* sales have been extremely slow, despite all the, clever schemes concocted by .the retailer in most of the big. centres of population from New York to San Francisco.

Wages Reduced. That great class of the American publio—the worker—has been caught both ways through the refusal of the contumacious retailer to deflate his prices, and also oa account of the general tendency of the employer to reduce, the! wages ofr his workers. The consequent effect has been that the weekly wages has not been sufficient to cope with the piesent cost of living, the proportion being about 15 per cent; reduction in wages as compared with but 3 to 7 per cent deflation in the price of necessities of '.''.'"'..'"." Prices of certain staples have actually increased, such as by-products of agriculture, and coal is still excessively high in West, despite the fact that the miners have been given a smart cut ih wages. Theibugbear of the whole situation is the' ever-growing unemployment Hordes of idle men are seen pacmg the streets of all the big cities of the American Union. In Portland the ranks of the workless is twice the normal figure at this time of the year| whilst Spokane is oven worse. AVage rcductio»s of' from ten to twenty per cent, have occurred in the logging industry;, and the same has occurred in the automobile" factories, many of which are only' working half-time with depleted ranks. So great has been the msh foi positions, that in one of the Eastern cities the other day, five- men uere advertised for and over 600 men deluded the vicinity of the office. A not "call had to bo 1 sent in to restore order among the eager applicants far the live positions," which were of menial character, and, .niode#tely low wage. Unemployment'™ New York is increasing everv week, and in the Philadelphia district it has reached big proportions, rnemplovment in San Francisco district is reaoijjhd officially ns "abnormally KreiitT," jltiousK this was undoubtedly the last American city to experience the changed conditions brought about by readjustment.

Slump Not at an Enfi. . As far back as the middle of last December optimists .in the Eastern States' were preaching the'end of deflation, but as the weeks *have passed it has been seen predictipns of immediate better times were unfounded, and curtailment/in many directions of industry has 'been recorded.- Instead of relief, there Jbas been a further slump, which is far from an end yet. It is expected that prices are far from the Bottom as yet, and the downward tendency will have to continue before confidence is restored among the purchasing public, "Confidence 'is the wnftchwordnow being flaunted Bbtore the people in the commercial pages of many of the big American daily newspapers. That magic word heads the columns of alternate commercial news "stones. * Mr John H. Defreea,. president of the United States Chamber of Commerce, in an interview in Washington; said: "When we talk about returning to nor. m'al conditions, we mean a return to conditions in.which things are balanced and.in proper relations to each other.' He said many concerns had. been

squeezed out of existence by the economic pressure, and now labour was feeling the pinch of a necessary reduction in wages. Expressing the opinion that still further wage reductions we're inevitable, President Defrees added: turn primarily upon what is a fair and balanced distribution of the fruits of industry, to which labour, management and capital all contribute. If a man is not earning enough to permit him to live in substantial comfort and save, he is not earning enough. Before the war most of us received sufficient out of the common put to save something. The .war upset conditions. While some classes are more advantageously placed than before the war, many are not, particularly the so-called white-collar worker, the man paid a salary. He has had an extremely hard time. Some industries are taking heavy losses, which will bo shared by the stockholders and workers alike. The farmer is taking his loss, the manufacturer his, and the worker inevitably will have to accept his share. Lack of demand rather than over-prcduction is primarily responsible fpr the business inertia."

Fruit Prices Fall. Countries which have imported California's luscious fruit are fully aware that last season saw the prices terribly steep, but there is now some prospect of importations next season being considerably cheaper, according to an announcement made in San Francisco by Mr R. G. Spencer, manager of the California Co-operative Canneries. He says the future of that immense organisation is anything but bright, as the way is being paved for lower prices. The cannery warehouses are filled with unsold fruit, packed during 1920 with fruit which was purchased from the growers at the highest prices ever paid, and packed in syrup made from sugar costing as high as Is Oid a pound. Labour costs were higher than in previous years, and practically every item of cost was at the highest peak heretofore known.

At tli'ij beginning of last year, prospects were for another highly successful year, for both the canner and the grower. In the late summer, however, conditions changed almost overnight, prices of various commodities commenced to tumble and credits were sharply restricted. Foreign markets were" closed by the unfavourable rate of exchange and marked economic depression in the war-torn nations of Europe. "The prices of canned fruits and vegetables weakened and added to the lack of confidence on the part of the buyers,"' pointed out Mr Spencer. "Finally buying practically stopped, and For the past several months the energies of the cannery sales forces have been largely devoted to the problem of accomplishing delivery on orders laready secured. Buyers cancelled orders or rejected shipments without compunction. ■

"As a result of tiiese chaotic conditions, estimates of the surpluses of unsold stocks vary from 5,000,000 to 5,500,000 cases', equal to a whole season's output beforo the war. One fact is •patently clear, however: prices cannot be maintained and the goods moved. People of America have stopped buying peaches at 2s 6d a can. Canners who have not moved the bulk of their product must take their losses on the highpriced fruit packed with h'igh-priced labour in high-priced sugar." Following closely on the heels of this statement was an announcement from San Jose, California's centre of the prune industry, that the price of prune's had been cut nearly 50 per cent, by the California Prune and Apricot Growers' Association. The basis price, previously eleven cents (ssd) per pound, was cut to six and a half cents (BJd) for the 1920 crop. Sftiall demand, plus the fact that the United States Government recently threw on the market a quantity of prunes purchased during the war;~but not used, thus flooding the market, was given as the reason for the price reduction. Dried-peaches are expected Jfco fall considerably shortly, and "the raisin in-/ dustry, which exports to all part% of the world from California, is also'promising to register some fall in prices,for it is pointed but by Mr Wylie N. Giffin, president of the California Associated Kaißin Company, that new acreage is constantly being' planted, ,and that instead of 200,000 tons regarded as' the normal production to-day, packers will have to reckon with perhaps twice this amount' this season. There has been prodigious •profiteering in this raisin industry, in California, and the time is ripe for'a recession in prices.