AMERICA'S TRADE.

Taranaki Daily News, 4 December 1920, Page 9 (Supplement)

AMERICA'S TRADE.

THE PRICE REDUCTIONS, WARNING TO WAGE-EARXERB PUBLIC I'UKSE TIUHTI-NKO. In view of recent ruble m<.«a"o, respecting lowered prices and increase unemployment in ~;„, \;,n,,,] Slates, the following report h v the \;,. lv y„',.|- c .', r , t ,. apomleni. of the London !iailv Telegraph 15 "I -I'Criai i.-n..;.,.-!. ii ; Vi is wl-iltei, at- (he end of Nepu.-iuber:--A "' f '" ml •*)>"*'» of price reduction is sweeping over the I'niied Stules and "mnntacfurers. v. holcalc and retail are -crumbling over Ihemseives in I heir l U is,,. (o announce decreases ranging from 10 to -J) per cent. ,„ cotton, clot h--1 "'£'• food, and motor-cars. The first price-cutting campaign la-u sprint was brought about by the "overalls ea.nipaign, which impressed upon the public the necessity of economy and discrimination in purchases if prices were to be k'ept liown. This second wave was started by Mr, Henry Ford, who a few days ago declared that all his motor-cars would be sold henceforth at pre-war P-ices. Although the overalls campaign 'ailed, the public has adhered to it« policy to buy as little-as possible, with' the result that all manner of goods are i Pilod up in the stores and warehouses, and the business of the country is I threatened with stagnation. Dnring the summer ',ho condition* reached a pass where manufacturers had to decide either to close their factories or sell at a lower figure. Except in one or two notable instances, such as clothe i"olo; -ai-s. and boots, there have been, 'lo radical price declines su far, although the retail stores everywhere are co'n- I ducting bargain sabs, „ mn , o| . ]p<s I genuine, in an effort to get rid of their high-priced stocks. Except in the case of coal and a few articles of food, how- ! ever, there have been no advances fori some months, and it is therefore =afr to assume that the peak of high prices he ' been reached and passed. Respite the lack of orders, the steel mills refuse to reduce their price's, but purchasers persist in the belief that they will be able to buy more cheaply before ! long, and Wall-street expects loivcr! prices in this basic industry soon. Mr ! Secretary Houston, of the United States ! Treasury, declares to-day that a sen-' era', reduction in prices 'is on the way i but he docs not arth-imitc stable coil-1 dntoiir. for some years, and is uncertain ! ■ fa', the pre-war price level will re- 1 tn-i: at all. j LOWER WAG riS INEVITABLE. I In all the industries where pric- re- : diictious have take* place there has I been no wage-cutting, hut with utietn- i ployment increasing and the cost of • living slowly declining, lower wipes' are inevitable in the near future. ! Europe is sending thousands of eini- I grants here daily, and the rec»ivin"' station in New 'Vork has been" s'o | congested that the steamship companies! have been notified that no more' eini- i grants can he accepted until the j,r«- ' sure is relieved. The flood of foreh-r. ] workers is already beginning to make I itseli felt in the American labor market ! and applicants for\jobs are beino- of- i fered wages on a downward scale." .Mr. I ■Secretary Houston reports that the i fiovernment expenses are steadily dr- j dining, and holds out some hope of I a reduction in taxation next year. ! Every effort is being made by fliei business and financial leaders here to avoid any precipitate decline, and the readjustment will be made, if possible, ' in graduated steps, from one level to i another. Even if this careful programme is successfully carried nut, the authorities -believe that unemployment here during the coming winter is 'bound to increase, and many Americans will leel the pinch for the first lime since the European War.' CONSERVATION UF CREDIT. Writing a few days later, the correspondent says:— _ The present wave of price reductions in the United States is merely the outward and visible sign of a' condition which was carefully planned by the financial leaders many months ago, when the Federal Reserve Board authorities initiated a policy of conserving the credit resources of the banks for .strictly essential purposes. It has been a long and stern fioht between the controllers of credit and the owners of large stocks of commodities wlncii have been withheld from the market with the object of forcing hi»her prices. The pinch of inM,(li.-i c .,it funds and the refusal of the public to pay even the prevailing prices is now resulting in a gradual and .-encral release of warehouse stocks of all "kinds in order to obtain much-needed money, and the. flood of goods poured upon 'a none too receptive market is resulting m depressed prices. The financial leaders have been purstung a radical policy which so far has f 'achieved ,ts object, and at (he same time has avoided the ever-present danSer of precipitating a panic. The weak-pmnt of their plan has been their neglect to provide a safeguard by fostering foreign trade relations. ' Tltev have permitted the .European enhances to decline to a point where buyers "on your side find it almost impossible to do business with America, and their reluctance to extend credits abroad with hat liberality which characterises Kn«and ,n her relations with' her ObnI menial neighbours has restricted the. commercial expansion which the Uniled Mates was i„ a » mijf|m> ,„,,),,„„ t „ develop. An unlimited market abroad, of course, would have largely neutralised the banking efforts here to briu<. about a readjustment of price levels, "it there are many who think that things have been carried to extremes, and that a golden opportunity has been permanently lost to Americans. The loiintrys steadily declining imports and exports tell a succinct story. A CHECK OX STRIKE". Although America has ponds and -hips to carry them abroad to waiting markets the world over. (hey im , Pep'l at home by the economic ' eondilinns. In_ the midst of (he shower o; falling prices no attempt has been jnnde so far to reduce wages. Unemployment here has not reached the >ta»o 'where the employers may dismiss men with the certainly of being able to 1111 their nlaccs. hut the conditions have altered to a point where strikes are undertaken with much less assurance of success. The walkouts of recent dale have usually ended quickly, the workers returning without improving their position.

I Labor is now lolcl frankly that the i present wage scale can only be mainJ lained in the lace of lower prices if, it will produce more and living its efli- 1 '•ifiiicy up to the pre-war standard. It is quite, on the cards that, labor will make one more concerted bid for an increase before it is convinced that the peak of wages lias been reached, and even passed, but it no longer holds the whip hand, and capital will resist with complete confidence in ultimate victory. Americans arc watching with keen interest the Uibor disturbances both in Great Britain and Italy, and the gen- I eral attitude here is one of criticism of the workers on your <'uh for what is regarded us au attempt by threats of dirct action Io ohsinict. your post-war recovery. In view of (he great progress made in hoiii counlries along ihe<e inn-, the demands of your miner* are regarded as particularly sinful lieeause liu-y have no higher aspiration than a hour-;, and grcnicr lattitude of action. The suggestion that there is-a serious desire in either England or Italy for Bolshevik rule is not taken seriously here, and (he workmen's demands when analysed, it is declared, reflect merely ;a selfish wish to appropriate to thpmI selves the entire "war gain" so called.