COMMERCIAL.

Southland Times, Issue 18855, 22 June 1920, Page 2

COMMERCIAL.

AMERICAN MARKETS. THE DROP IN PRICES. Prices fell all over New York on. May 9 as a result of the sensational announcement that the great Wanamaker’s stores in New York and Philadelphia would knock 20 per cent, off the price of every article in stock as a deliberate attack on the present inflated values, says the American correspondent of the Wellington Post. There was such a rush to cancel clothing orders that some of the smaller woollen mills report cancellations amounting to more than 90 per cent. All stores dealing in clothing reported an extraordinary drop in patronage. The people stopped buying clothes, or, at least, postponed doing so, in the expectation of a drop in prices. The drop was regarded as certain to come, if for no other reason, because the British Government expected to release an enormous amount of Australian wool on July 1. It is claimed that the overall movement had nothing to do with the fall in prices. That campaign was confined to notoriety seekers, and resulted only in making overalls higher for those who had to wear them. They are still in use in the west, however, though not to the extent that formerly prevailed. The most sensational drop was in furs, which registered a decline from 15 to 50 per cent. The fur trade is forced to the conclusion that the craze is over. There is no evidence of rents coming down in New York, but uneasiness is manifested all through the real estate market. It is thought this summer will see the last of the extortionate prices. It is regarded by influential financial men as certain that hard times are coming and that they will arrive this autumn with a fall in prices and wages. In the past few' days reports have come from all parts of the United States announcing price reductions on practically all classes of goods, with the usual exception of foodstuffs, of from 20 to 50 per cent. Even dentists in Omaha reduced prices 25 per cent. Spectacular breaks also took place in the price of cotton, lumber and corn. MOVEMENT BACK TO NORMAL. The Guarantee Trust Company of New York in its report for May 14, says that there is a general feeling that the series •;f price reductions sporadically announced in various parts of the country indicate the imminence of a movement that will carry business back to normal conditions. Buying is being curtailed and merchants who are overstocked are beginning to unload at reductions ranging up to 30 per cent., many of them finding that a quick turnover results, and their net profits are maintained. The quick response of buyers to reduced prices is sufficient guarantee against any violent readjustment. The determination to economise is tempered by a gradually widening understanding of the causes of present price levels. The public is apparently tolerant of very high prices so long as there is convincing evidence of a bona fide attempt to reduce them. There is no discoverable antipathy to business as such, but the feeling against unconscionable profiteering and speculation in necessaries is deepening. These favourable factors in the situation are offset to a large extent by the continuing shortage of transportation facilities. There is congestion at all distribution centres and this is likely to continue until the spring movement of crops, for which cars are being allocated to the Southwest and Northwest, is completed.