PRICES STILL FALLING.

Taranaki Daily News, 27 November 1920, Page 10 (Supplement)

PRICES STILL FALLING.

conditions in America : : MOTORS AT PRE-WAR COST/ Another sensational wave of price cutting has swept over the country, leaving many commodities substantially cheaper than a month ago, Messrs. John Dunn, Son and Company, of New York, 3tate in their market letter of October 4:—The inciting cause, apparently, was the action of the Ford Motor Company in reducing prices for their product to approximately the pre-war basis. Many other makers of automobiles have followed suit by reducing prices to some extent. The two large mail-order houses in Chicago immediately announced substantial cuts in prices of a great variety of goods, and retail dealers quite generally arc advertising special sales, under cover of which they are endeavouring to rid themselves of high-priced stocks with the least possible loss. ' ■"■ As each month passes it becomes clearer that ft veal period of deflation is under way. although the actual necessity of life, excepting perhaps clothing, are as yet scarcely affected/ Prices of food have changed, but little to the consumer, while fuel and rents continue rather to advance. All textile goods, cotton, wool, and silk have fallen very decidedly in value, as have hides and leather. Shoes are consequently somewhat cheaper, but still double What tliev were in 1910. There is no real lack of demand, but the public has j come to expect lower prices, and is delaying the making of purchases as long as possible—a very decided change from conditions prevailing six months ago, when eager spending was the rule. The reasons for the present lull in business may be summed up as a waiting attitude in combination with banking restrictions. LOWEST INDEX SINCIJ MAY, 1919. Another very heavy decline is recorded in Bradstreet's index' number of commodity prices in the United States for August. The figure for September 1, IT dollars 97.46 cents, shows a decline of 4.5 per cent, from that of August 1; the decline from the peak point of February 1, 1320, was 13.9 per cent., and the September 1 number was, in fact, the lowest recorded on the first of any month since May, 1919. It is still, however, 106 per cent, above August 1. 1914. Weakness in textiles, especially in cotton and cotton goods, and in the provisions group, with smaller declines in hides and leather, metals, vegetable oils, and naval stores, offset some strength in dried fruits, miscellaneous products, and coal and coke. The month saw a heavy break (10 cents) in cotton, resulting in lower prices for cotton manufacturers, and also saw weakness in groceries, prominent among the latter being sugar, coffee 2} cents., and rice 2 cents. A slight downward turn in building materials, due probably to the check to constructions, was an event of the month. Coal and coke were stronger, reaching, in fact, new high record levels, and a number of foods, notably dairy products, advanced, as did meats. No fewer than 10 out of 13 groups declined in August, and 40 individual commodities moved lower, while 28 advanced and 40 remained unchanged. A Reuter telegram from Manchester (New Hampshire), dated September 22, states that the Amoskeag Manufacturing Company had announced a reduction of 33| per cent, in the price of manufactured cotton goods. The present weekly production of the company, which employs 10,000 operatives, amounts to 4,000,000 yards. Explaining the reduction, the company states that it fears that the cotton market, which is already unsettled, owing to a heavy cancellation of orders, might reach a condition similar to that which compelled companies in the woollen line to close down. GRADUAL DECLINE EXPECTED. The market report of thee National Bank of Commerce states that wholesale prices continue to move downward in many important groups of raw products, and of semi-manufactured materials for use in further manufactures. Declines have been passed on to the finished product in some lines. Unless untoward socjal and political developments should take place in Europe, however, it now seems likely that in the case of most commodities the period of rapid price adjustment has passed, And that fiunctuations from now on will be through a gradually narrowing margin. Present price movements, how. ever, must be interpreted with the greatest care. Cases in point are those commodities the prices of which appear superficially stable, but in which as a matter of fact, almost no business is being done. In such cases, actual values jtfannot bo known until trading operaHtans are resumed. lATJERNATIONAL CONDITIONS, The cismdition now prevailing in the Jnited S#ses of declining prices and of consequent limitation on the part of the buyer whether\he be manufacturer or ultimate consumes, prevails in every important country tfif the world. The British textile industries have felt not only hj, slackened domestic demand, but the effects of curtailed', buying in distant markets, especially India. The boot, shoe and' leather industries of the United Kingdom are now '|n a state 6f stagnation. Ports as widely scattered as the Piraeus and Barra'uquilla are congested with goods bought in large quantities at the flood-tide of postwar prosperity. These goods must no\" lip handled on over-burdened railways, in : markets dis.po.sed to be critical' oi prices. The rest of the world has become accustomed to the absence of' the countries of Central and of Eastern Europe as producers and consumers of manufactured goods, but their continued inability to buy certain classes of raw materials is being increasingly felt. ° ' BANKS AND FALLINO PRICES. The Federal Reserve Board has declined to extend special financial aid to the cotton growers in their efforts to maintain prices. Governor Harding, who received a committee representing the American Cotton Association, told them it was contrary to the policy of the board to take action that would either sustain or depress the price of any particular commodity. He advised them to make the best possible use of available bßnk credit and facilities and to make their arrangements for marketing their crops through the accepted financial channels. He suggested further the formation of an export association of cotton growers for the development of markets abroad. Governor Harding pointed out that if the demand of the cotton growers for special accomodation were granted the resultant tying up of credit, would tend to offset measures now being' taken to reJ duce credit expansion, and would lead -N* lilghM ami «t >rodvietis4, ,