DEFLATION IN AMERICA

Manawatu Herald, Volume XLIII, Issue 2236, 8 February 1921, Page 4

DEFLATION IN AMERICA

“Back to Normalcy,” the watchword of the victorious Republican Party, coined by the President-el-ect, is echoing through all discussions on the high cost of living, says the New York correspondent of the London Times. If the advertisements which are appearing in the leading newspapers are any criterion, it might he supposed that Americans arc determined to bring pri-

ces back to pre-war figures overnight. Of course, nothing of the kind can occur, but it is a sign of the times that retail businesses everywhere arc announcing sales at less than cost price. Already, according to the'Federal Reserve Board, the decline in prices has gone considerably farther in the United States than in England. Although no panic is anticipated, there, is a widespread conviction that the near future-will be marked by a spectacular succession) of business failures. The downfall of the mushroom establishments which were started, with little or no capital, with (he object of making quick fortunes from the fantastically high prices which prevailed earlier in the year, is regarded as inevitable. Wall Street, in these circumstances, presents a picture of unrelieved gloom. Tens of thousands of people who started gambling in securities are now ruined. From the low levels reached during the war they saw stocks climb with giddy rapidity to incredible heights —only to fall again with a sickening regularity. The majority of stocks are now far below where they were in the midst of the miseries of the