ECONOMY AND PRICES.

Otaki Mail, Volume XXVIII, 9 August 1920, Page 4

ECONOMY AND PRICES.

REDUCTIONS IN AMERICA. The causes and extent of the recent ~ • fall in prices of certain commodities in „ | the "United States are discussed at . J length in commercial bulletins received s ' by last mail. , Writing from New York on June ", B Messrs .lohn Dunn, Son and Co. refer . to "a wave of price-cutting by the ~ retail trade that has extended to al ° most all parts of the country." The ~ 'Jinn states: —"The reductions are most " noticeable in high-priced goods Vhcre , ■ profits were largest, but all sorts of household furnishings, shoes, clothing and dry goods are decidedly lower in price. Food supplies are as yet but little, if at all. affected, while rents and wages continue to rise. Several causes have combined to- promote this I movement, foremost among which pro- . bably is the grooving resistance of the people to the prevailing exorbitant juices. This changed attitude on the part of the buying public has resulted in a declining demand in the retail trade greatly accentuated by the unseasonable weather. Then, too, credit restrictions and high interest rates have made borrowing difficult and I { costly. furs, silk, jewellery, leather, clothing and wool are lower, furs and silks particularly having fallen very considerably. Iron and steel products, I cotton, cotton goods, lumber and all , building materials have been affected but little or not at all. A second conclusion to be drawn is that the public will,* if sufficiently aroused, assert its control over prices. The present situation shows that a great body of the people have been bringing to bear their ability to economise. They have simply refused to buy anything they could possibly do without, and the fact that one of the chief reasons, but by no menus the only one. thai prices havu tumbled ithe inability of merchants to clear ih.ii shelves.j.rovcs the wisdom of the advice that salvation lies in more saving and greater production. In so far as prices tire affected by tin; volume of bank credit, the high tacked by the bunkers. Every banking institution hus been urged to reduce its outstanding loans, and this ' liquidation is being 'directed againsl those who are disposed to profiteer or speculate on borrowed funds.