Hokitika Guardian & Evening Star THURSDAY, NOVEMBER 18, 1920

Hokitika Guardian, 18 November 1920, Page 2

Hokitika Guardian & Evening Star THURSDAY, NOVEMBER 18, 1920

INDUSTRY AND PRICES. There is naturally considerable concern and interest regarding the possibility of prices for goods falling at a near date. The position is governed; to some* extent by the industrial side—that is in relation to the supply of goods to meet the demand. The financial side threatens however to be the main factor deciding prices in the immediate future. In reviewing the trading situation at Home where so much of the world’s consumption is governed J as to price, a commercial journal of late September writes in reference to the situation as follows: While the state of the labour world-is most unsettled, there are unmistakable indications that the near future will see a substantial reduction in the volume of trade. In the opinion of many the reduction lias already come, and there are some who describe the movement as a slump. An ultimate effect of this will probably be a substantial fall in prices of commodities, which may not come suddenly, but gradually: The depression in trade which is in prospect is likely to be severe, because it will come at a time when big manufacturers and traders are loaded with immense stocks of goods which they have not been able to dispose of at the prices lately ruling, and the sale of which now would involve a loss, even if the buyers, could be found. Until lately there was no necessity to consider a reduction in prices, because a keen Continental demand took all the surplus that wo could produce, especially in the matter of wool, cotton and other textiles. This demand kill exists, but traders now recognise that the purchasers can only pay in a depreciated currency, jmd it is understood that many firms have money on the Continent which it does not pay 1 hem to remit to this country owing to r,he heavy loss involved in exchange. There is also the fact that prices of commodities had reached a level which the existing volume of credit or buying power was unable to maintain. A slackening | I of the demand, therefore, is almost certain, and the prospect that as a result [ prices may give way materially is, peri haps, the best feature of ’Hie present complex process. In the process somebody may suffer, but it is imperative that prices should be so adjusted is to encourage a. fresh demand for goods. The banks are frequently blamed for the setback in trade because, it is .alleged they have refused to supply the necessary credit facilities. There is no doubt that some time ago those institutions effected a considerable reduction in th total of their loans to traders, etc., but the policy was perfectly justifiable, and, indeed, was demanded by the circumstances of the moment. The great rise in the price of the commodities was assisted by operations of a

distinctly speculative character, the continuance of which threatened difficulties if not disaster; and it was the duty of the banks to curb this speculation as far as they could. Such a policy was called for in their own interests, because the balance-sheets of the great banks made up to June 30th last showed instead of a reduction in the important item of loans outstanding, in most cases a further increase, with the result that the proportion of cash held to liabilities was reduced. To have extended credit facilities further in these circumstances would have been dangerous.

prosperity,' which is reflected over all the community. The Progress League has decided to invite the General Manager of the Railways to visit Hokitika. This is a proper course, for the blatter is essentially one for business. Here is a large freight offering, and it will be good business for the Railways to earn the revenue which is so much ' extra in the way of receipts, for the plant, etaff and trains arc in existence, and are there ready to be used without any extra cost to earn the increased revenue. It is well therefore | to bring the business proposition pro- j ininently before the head of the De- | partment. Another useful step the Progress League took at its meeting on Tuesday night was the action to urge the expenditure of important bridge works in Westland. The votes are on the Estimates, and it is for the people to see that the money is spent—for the bridges are most urgently required. The Resident Engineer as the local officer representing tlie Government is to be consulted. This is a practical move for Mr Gillies has the best knowledge in re-' gard to the matters affected, and securing his interest in reference to specific work's will be a special lever in the direction of attaining the object in view,, the erection of very urgently required bridges. Besides the very important structures in South Westland, there are the small bridges on the Christchurch whicli are important and will become more so with the increasing volume of motor traffic. This is a class of traffic which will grow gene rally, and particularly with the completion of the tunnel, when, with a' daily service there will be improved facilities for motor traffic into Westland from the East Coast. As regards the bridges those of paramount importance include the principal structures on the highway into South Westland. No doubt if tenders were called for the works, offers would' be forthcoming. There was good competition for the Little Waitaha bridge, and the same interest would be shown if contracts were to be let for Little Wanganui and Waitangi bridges. The community lias made up its mind, that these conveniences to assured traffic south are so urgently required, that Government action in regard to speeding up the erec tion of the bridges would be hailed with general delight. It is well therefore, fbr tlije public bodies to keen the pressing necessity for the bridges prominently before the Government, and not rest, now that the money is voted, till the work of erection is in band.