Hokitika Guardian & Evening Star THURSDAY, AUGUST 26th, 1920. DEFLATION.

Hokitika Guardian, 26 August 1920, Page 2

Hokitika Guardian & Evening Star THURSDAY, AUGUST 26th, 1920. DEFLATION.

A substantial drop in prices in the United States was reported in June last affecting particularly boots and clothing and reports to hand indicate that in many of the large stores for which America is famous, deflation in prices went on all round. The cause of this was mainly overstocking as a result of loss of export trade, caused chiefly by high rate of exchange. A correspondent tells the story very graphically in respect to a huge sale of shoes. He says this was a special sale in New York in a special building usually for exhibitions. There some 1,500,000 pairs of shoes were placed on sale at prices said to be below wholesale cost. 'Hie reason for this gigantic sale is, of course, not a philanthropic one merely to save the consumer from higli prices. It is purely a business attempt “to get from under.” It reflects the failure of war devastated Europe to come up to American expectations in demand and ability to pay for needed American products. This is probably the real fact in the matter. The selling company is neither a manufacturer nor ordinarily a retailer of shoes or anything else, it is said. In the present case it had shoes manufactured for it in various factories and in immense quantities on the speculative chance that after war Europe would provide a greedy and almost unlimited market for them. The thing did not work out as expected. Badly as Europe needed shoes it could not afford to pay the fancy prices asked for them. They were high for the American market. They were made doubly high for the European market by the adverse exchange rates on the United States. So the great stock of around 1,500,000 pairs were thrown, on the market here which the accumulation of the stock helped largely to inflate. This operated all over the continent with the result that the deflation of boot prices became general. Something similar happened in regard to clothing. The United States speculative markets were going wild a year ago over the riches that Europe was .going to provide them after the war for rehabilitation purposes. Now they find out that Europe cannot pay these fancy prices and that the .people here are not going to do so. Forced sales on a large scale are bringing about the consequent result of a tendency to deflation. As evidence of this comes the announcement, now of another tremendous sale to take place at Madisonsquare Garden, one of the largest build- 1 ings of the kind in this city, of men’s ‘ suits amounting in value to some £3,000,000 and 4.000,000 dollars worth of goods. Tliesc goods are to be sold at a price under wholesale cost. They are | placed on the market by a number of wholesalers who have been caught ; overstocked because the for,sumer re- c

fuses to buy at cent- nrioes. Out of this the boom in American ship building has come to an end.'which means that cheaper freights will soon obtain. Thus is the swing of the >•,»,,1-:b>m working towards a central deflation in prices to reflect themselves all round the world. wynmnniinrwi w—m wmmam

pcnditure iu the country, and the pro- j vision for a second doctor in Hokitika. In arriving at this conclusion the Board does not wait to weigh the cost, but is prepared to rush in to the expendi- j ture and leave it to the local bodies I concerned to go on levying on the ratepayors to foot the bill. Already this year there has been u substantial increase in the levy for hospital maintenance. The two principal bodies, the Westland County and Hokitika Borough, have each had to increase their rates to discharge the claims made upon them. There is no sign from the present rate of proposed expenditure, that the levies will he decreased in the near future—and consequently the ratepayers will be asked to go on paying the increased charges. With the demand for additional medical attention, and the Board’s readiness to at--1 tempt to supply it, it would appear that the present volume of expenditure is not equal to the calls, 'but before readi- ' ly granting the additional requests the , Hoard should consider the financial ■ position. The bulk of the expenditure falls on the County Council, and when i the new valuation is made shortly, that quota will ho increased substantially i and the boroughs will carry a smaller proportion of the burden. Wc have [ just turned itp the 1918-19 figures, and find that nearly 63 per cent of the j County rates went in hospital and charitI able aid expenditure. In the Hokitika Borough some 30 per cent of j the rates collected went to satisfy the ! hospital levies. The figures this year j promises to be substantially larger and 1 if tlvero is a still further rise we shall be approaching breaking point. This is a matter which could be controfled by the County representatives on the Board, and seeing that a period for an election of members is at band any extra expense should be deferred for the new Board. If the ratepayers care to express an opinion on the matter they may do so at the ballot box, and that would be the time for a fair test as to this rising expenditure.

In regarding to hospital expenditure the bulk°of the local money is found by tire country residents. This applies not only to rates but also donations. In the latter respect the Boroughs do not do their share, yet being the centres they get full value for their rate contributions. The country people, and specially those in remote places, get little or no direct benefit and it is due to them certainly for the Board to continue come means by which more direct 'benefit will be their portion. 'As fax* as we can see the Board is not justified at this juncture in going in for a large building expenditure in the country districts. The central institution should be made as complete as possible, and for the country districts there should be facilities for first aid. When the south rivers are bridged to the AVaiho, that locality will be within five hours’ journey of Hokitika where there will be a wellequipped institution and expert medical and nursing attention. Experience has shown that a resident nurse in the south is not called upon very much, but in tho interests of humanity it is a reasonable request to see a. nurse retained in the district, but we doubt the wisdom of a cottage hospital which would cost many hundreds of pounds and be a white elephant. It would bo better in our opinion for the Board to assist with the transport of deserving patients to the public hospital here. The back-block residents have a claim for assistance in that respect seeing that they are impelled to contribute a greater sum than town residents who get the major benefits. The Board requires to review any additional expenditure just now very carefully In less than three months, a new Board will be elected and according to the interest the public* who pay, take in the event, so the members elected may inter-pi-et their mandate. But it is clear that the cost is going to mount up more and more unless some set policy is quickly determined, and the County ratepayers must find the bulk of the money.