FALLING PRICES.

Taranaki Daily News, 31 December 1920, Page 6

FALLING PRICES.

POSITION IN BRITAIN, RESULT OF PUBLIC BOYCOTT. Chiefly owing to a boycott of highpriced goods by the public, wholesale prices of everyday commodities have declined considerably of late, say's a Ljudon paper. The "slump" is expected to continue and to shortly effect a corresponding drop in retail charges. Among the articles affected so far are cotton and cotton oil, copper, tin, terpentine, linseed and linseed oil, the cheaper varieties of tea and coffee, and wheat.

The upward movement in prices, which began early, in the war period and reached its zenith last spring, has outstripped purchasing power. The volume of the latter is unable to maintain the recent level of prices.

Orders from abroad have been much reduced owing to the fall m the sterling value of Continental, Indian, and Chinese exchanges. n At Home the cessation of well-paid wartime employment has diminished demand, but the rise in prices which has taken place since the armistice is a more potent factor in producing the present reaction because in the interval the supply of commodities has been steadily increasing, if slowly. With an increasing supply of commodities and a volume of purchasing power, reduced prices have naturally had to give way, especially as the public has refased to buy at recent high prices.

In the United States the decline has been more rapid than here, and this has no doubt influenced sellers of goods in this country to reduce their quotations. Tho fall in wheat- prices in North America is ascribed largely to the fact that the Royal Commission on Wheat Supplies recently has abstained from buying. It will not at once lower the price of bread in this country, as bread has risen to a greater degree in Canada than here.

The, Ministry of Food expects, however, that wheat will fall a good deal more by tho early spring, when there is likely to be a difference in the consumer's favor.

As regards other commodities, it has long been the opinion Of merchants that prices were being forced to an unhealthy height. "They have gone above the limit at which deqaand can keep pace with them, \yith the consequence that merchants must either keep their goods or bring them down to a level at which the public will buy," said a financial expert. "There must result eventually some relief for consumers."