WORST STAGE PASSED.

Taranaki Daily News, 5 March 1921, Page 9

WORST STAGE PASSED.

CONDITION’S IN AMERICA. MANY BUSINESSES FAIL. An improvement in the outlook for industry and commerce in t'he United States is described by Messrs. .Tohn Dunn. Son and Co., in their market review dated January 6. The firm states that there are many indications that ; the month of December marked the culmination of the acute stage of the worldwide readjustment of values. The situation at present is far from satisfactory, # but it is felt that the worst is now known, and that t'he future developments* can be successfully dealt with. The volume of commercial failures during December was greater than that of gny other month for many years, being no less than 50,000,000 dollars of liabilities, compared with only 31,000,000 dollars for the month previous, and 8,000,000 dollars for December, 1919. world-wide collapse of prices for commodities is, of course, the underlying cause. This has apparently about run its course in regard to such basic commodities as wool, cotton, copper, grain, silk, leather and rubber: These and many others of less importance seem now' at levels where commitments may be entered into involving only the usual business risks. Tn addition to the large number of actual failures, it is no secret l that many important manufacturing j concerns are now in the hands of their ; bankers, and will be carried through the i crisis and eventually either reorganised I or liquidated, as conditions may dictate. PURCHASING POWER CURTAILED. The falling-oil in the export demand for this country’s products will seriously . affect domestic prosperity. Unemploy- ; ment and smaller earnings ar e greatly j reducing the consuming ppwer of the J public and the farming classes in par- j ticular must curtail their purchases. , Mills and factories, Vollowing the usual custom, have very generally been closed ■ for the holidays for repairs and in- j ventories, and this closing period has in most cases been prolonged to reduce production. Since the first of the year many have resumed operations on part time, and in numerous instances wages i have been reduced. The textile mills, I both cotton and woollen, have quite generally cut wages 22J per cent., while, other lines of industry have made, reducti'ons of from 10 to .30 per cent. Basic conditions in this country are good; stocks of merchandise are not Targe, crops are abundant, gold is flowing in, savings banks are bursting with deposits, an enormous amount of building and reconstruction work is to be done, and only awaits loxver costs; the working classes are rapidly awakening to the fact that wages and the amount of work accomplished must bear some relation to each other, and speculation of the grosser sort is pretty well elim-

SHIPMENTS OF GOLD. I Taking the year as a whole to December 1, imports have increased some 45 per cent, over those of the same period in 1919, while experts for that time are only some 3| per cent, greater. The outflow of gold during November was 20.000,000 dollars in value, and practically all went to Japan, this being the only important country where t’he dollar has not for some time been at a premium. Imports of gold amounted to 57,000,000 dollars, 47,000,000 dollars of which was drawn from Great Britain. Goods on export orders were delivered in large volume during November, owing to the decreased domestic demand, and while export shipments for November are large, they largely reflect a windingup of old contracts. Dunn’s “index number”, which includes seven groups of commodities, embracing brea-dstuffs, meat, dairy and garden products, other food, clothing, metals and miscellaneous, now stands at 198,600, which compares with 211.628 on December 1. 1920, and with 247,394 on January 1, 1920. Money was in comparatively good supply through December, the rate for call money on Stock Exchange collateral standing at 7 per cent, throughout the month, with the exception of a few days on which six per cent, tfas the rule. This was considered most encouraging in view of the fact that the year-end settlements put a great strain on the money market, and the showing compares most favor- • ably with December, 1919, when the rate I for call money ran up to 25 per cent, i Time loans on the same security have ' ranged from seven and a quarter to ! seven and a half per cent, for 60 and 90 days.