SLUMP IN PRICES

Southland Times, Issue 18835, 31 May 1920, Page 5

SLUMP IN PRICES

BANK OF NEW ZEALAND CHAIRMAN ON POSITION. | DEAR MONEY THE CHIEF CAUSE. i Mr Harold Beauchamp (chairman of the I Bank of New Zealand), interviewed by a \ New Zealand Times representative, made an interesting and important statement with reference to the recent remarkable slump in prices which has taken place in America, the ; United Kingdom, and the Far East —a : slump which Mr Beauchamp had predicted some two or three months ago.

"I am not at all surprised,” said Mr Beauchamp, “to notice this slump which has already occurred in the value of certain commodities in both the United States, Japan, and Great Britain. It was, indeed, only to be expected in view of the restrictive policy that has been pursued by banking institutions as a whole and the high rate of exchange, couplet! with the fact that in a.c important industries arc now so largely increasing their output. I think that these three factors are, to a very great extent, the cause of the slump; but no doubt dear money is the chief cause of the fall in prices in tne uir.erent countries I have mentioned.

“So far as this country is concerned, after the luting of tne commandeei, 1 fancy that we shall also see a substantial drop in many of the primary commodities in which we are interested ; and this will doubtless assist the people who at the present time are feeling the pinch in respect of the high cost of living. Of course we are all waiting with interest to know what the position will bo with regard to frozen meat after June 30, the date when the commandeer comes to an end. That question is giving rise to a great deal of anxiety on the part of tho freezing companies; and I have no doubt that some solution will be found by which the producers in this country will suffer to no very great extent. But it is quite obvious that they will have to look for very much lower prices in regard to stock—stock on the hoof, I mean—than thoso ruling during the past few years. “As to wool, I am not surprised also to note the drop that has occurred in America and elsewhere; but that will apply principally to coarse crossbreds, of which largo stocks were held by the Imperial Government, that being the quality of wool so largely used during the war for military clothing. Of course, there is a very large quantity of woo! yst to be got rid of. I don’t know what the quantity is; but herd will be some 1,200,000 bales in Australia and New Zealand, in addition to this, there are large stocks in England, but a portion of these stocks bate been transferred to New York and Antwerp, wdiere at recent sales there has been a fail in prices, as tha cables have indicated.”