SENSATIONAL SLUMP.

Taranaki Daily News, 28 May 1920, Page 6

SENSATIONAL SLUMP.

BANK CHAIRMAN'S VIEWS. DEAR MONEY THE CHIEF CAUSE. Mr. Harold Beauchamp (chairman o" the Bank of New Zealand), interviewed by a Wellington 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 in our columns 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 i institutions as a whole and the high rate of exchange, coupled with the fact that many important industries are 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 the different countries I have mentioned. AFTER COMMANDEER—SUBSTANTIAL DROP, "So far as this country is concerned, after the lifting of the commandeer, I fancy that we shall 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 to the high cost of living. Of course, we are all awaiting with interest the result of the conference that is to take place to-morrow between the representatives of the freezing companies and the Government in reference to what the position will be with regard to frozen meat after June 31st, the date when the commandeer comes to an end. That question is giyjng rise to a great deal of anxiety on .the part of the freezing companies; and 1 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 those 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 large 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 wool yet to be got rid of. 1 don't know what the quantity is; but there will be some 1,2r>0,000 bales in Australia and New Zealand In addition to this, there, are large stocks in England, but a portion of .these stocks have been transferred to New York and Antwerp, where at recent sales there has been a fall in prices, as the cables have indicated."