PRICES AND BUSINESS OUTLOOK.

Taranaki Daily News, 30 April 1921, Page 6

PRICES AND BUSINESS OUTLOOK.

(By

“Mac” in the Radiator.)

Buyers the whole world over seem to have made up their minds that the prices of goods of all descriptions are going to fall, and fall suddenly. This idea has been current ever since the Armistice, but what are the facts to-day in the light shed on the situation since the war ceased? the cost of living come down? No, decidedly no. It has gone up, and will continue to go up as long as labor as a whole continues its present policy of “go slow” and its continual cry for increased wages

Work, solid work, »s the only way to reduce the cost of living, and when the population of the whole world realises this, then, and then only, will prices begin to recede on sound economic lines and with any degree of permanency.

At the present time, in America and England, a great deal is being made of the small reductions which have occurred in prices (not the cost) of goods; but analyse the cause of these reductions, and it is found that the position is unsound.

It is admitted that profiteering has been rife and has been a curse. Large quantities of goods were held by speculators. The banks of America and England had advanced money to these speculators to purchase these gpods. Money became tight and the banks called up these overdrafts. The speculators had no money to pay, so were compelled to force their holdings on to the market to get the cash, and, of course, had to 1 sacrifice. This has been the cause of the recent drop in prices. What followed? Certain traders, without any knowledge of economics’, became scared, and thought prices were permanently down and would drop further, and immediately endeavored to force their stocks on to the market by making price reductions. Result: cleared their stocks of bread-and-butter lines, but not their luxury lines, which they were anxious to sell —with what result?

lines they must have, so they went to the manufacturers to replace their stocks, and found, in many instances, they had to pay more for the new stock than the price at which they had sold to the public. No reduction in the cost of living here. Manufacturing costs have now come down, and cannot until, as mentioned above, labor decides to do a fair day’s work. If every man and woman would do this, the cost of manufacturing would drop immediately, as the output would increase enormously, which would decrease overhead charges and so allow the goods to be sold at a lower figure. Look at this fair day’s work from the very bottom as far as the motor trade is concerned. Coal is practically the base. If this were cheapened, steel, iron and all metals would be cheapened . Transportation charges would be less, and as fully 80 per cent, of the cost of manufacturing metal goods is represented by labor, a substantial reduction in the cost would be possible immediately Is there any indication of labor recognising this fundamental truth? Not the slightest; so prices cannot drop to any degree. So don’t get the wind up and endeavor to force your goods on to the market at cut rates, as you are not only hurting yourself but your brother traders as well/ and supporting the unthinking general public in the belief that priflaa are coming down with a bump, when such is an impossibility. We all know that at the present moment New Zealand is overstocked with goods, owing to the abnormal importations during 1920; but it is not so generally known that it is at present practically impossible to byy goods in any part of the world for shipment to New Zealand, as our bankk, one and all, absolutely refuse to establish credits or buy the shippers’ drafts. What will be the result? In a few months’ time certain lines will be in short supply, as the stocks now held in New Zealand are going into consumption steadily, and it will be practically impossible to obtain fresh supplies, and the number of lines which will be short will rapidly increase, so why sacrifice our stocks? We traders are all feeling the pinch at the present time, but if you will all sit tight, keep cool, and definitely make up your minds not to become panic-stricken, it is absolutely certain that the motor trade will weather the storm without damage. Think it over carefully, and make up your minds now.