RISE IN PRICES

Hokitika Guardian, 19 July 1933, Page 6

RISE IN PRICES

EFFECT OF U.S. MONEY POLICY

bank review of position.

,;l)nited Pres* Association—By Ele >tric Telegraph— Copyright.)

LONDpN, July 18

The Westminster Bank Review, dieCussing the .matter of recovery iin comipodity prices says: “It is only half true to call the rises an “inflation boom.”’ Though j/he American monetary policy has been largely responsible for tihesp incirp/ees, there has •bepn no actual .inflation. Even if the arises of the past few weeks should he. ifqllpwed by >a setback there are grounds for confidence that this will be only a .partial setback, as compared with the previous falls. ‘‘Ericeg have only risen moderately. ■Former .drops have been counteracted .by optimists engendered by recent events. Consequently, rising prices, instead of. checking demand, have encouraged it. The greatest danger of the present situation is that the suppliers .fchonld. seek to fpree the prices up too high, and thus check " the demand, or thet the rise should cause an over-rapid 'breakdown, in the marketing and production restriction schemes.

‘The goonor that the free marketing of production is resumed, thee bet;er ; but jit must cpnie in an orderly fashion. If these dangerg are avoided, there .is reason to .believe that though there difficult 'times .ahead, the recovery of commodity values marks a definite turning of the corner.”