SEEKING NEW LEVELS.

Taranaki Daily News, 26 March 1921, Page 9

SEEKING NEW LEVELS.

COMMERCE IN UNITED STATES. EASIER RATES FOR MONEY. MORE CONFIDENCE SHOWN. An interesting survey of economic conditions in the United States in December has been furnished by* the National Bank of Commerce in New York. The report states that the controlling and outstanding factor to-day is the relatively small movement of raw materials and manufactured goods even at reduced prices. This is because stocks of goods in the hands of retailers are sufficient to meet the needs of a somewhat lessened demand of the consuming public. Consumers are restricting their buying in part because of some curtailment of their purchasing power, but even more because of a willingness to wait until retail prices reflect the lower levels of primary prices. Improvement of business activity awaits adjustment of retail prices to a level satisfactory to the public. This necessary readjustment of prices to consumers is now under way and will be expected to make more rapid progress in the future. Its progress will, be hastened by the,, coming into the market of goods which are already being produced on lower cost levels for labor and material.

Sentiment respecting forward conditions, which until lately had been almost uniformly depressed, is now noticeably improving in many directions This better feeling does not go to th 6 point of optimism, but there is evident a degree of confidence which was previously lacking, in the ability of commerce and industry to meet the future successfully and to conduct business with reasonable profit. The peak of commercial borrowing may be said definitely to have passed, and from now on there should be a gradual and moderate reduction in the .volume of bank loans. The pressure for funds is already less/ general. Call money, which was from 9 to 10 per cent, during most of the preceding month, has during the current period ranged between 5 and 7 per cent., ruling at the latter figure, and closing at 6 per cent.

The downward price movement, in progress in the case of a few commodities a year ago, and for all important classes of raw materials for many months past, continued without interruption during the month from November 16 to December 15. Even in a period of generally falling prices, the future course of the price of each commodity is to be judged by the supply of and the demand for that commodity. At present every commodity must be considered also in relation to the prseent worldwide situation, the dominant feature of which is lack of purchasing power in Europe. Curtailment of employment has taken place in every industry. November official returns of the New York Industrial Commission show 200,000 workers in reporting factories of th'e State than in March Reports indicate large numbers of unemployed in the other principal industrial areas of the country. At the same time there has been an increasing influx of immigrants. Wage reductions have occurred in the textile industries, shge manufacturing, sugar refining and other lines in which declines have been conspicuous. Decreased purchasing power temporarily follows declines in wages, but decreased cost of production ultimately brings lower prices. In time these factors, together with increased efficiency of labor, will offset the temporary loss of buying power.