FALL IN PRICES

Auckland Star, Issue LI, 24 May 1920, Page 5

FALL IN PRICES

.RECORDED IN BRITAIN.

EFFECT ON COST OF LIVING,

NO APPRECIABLE CHANGE YET.

;(By Cable.-—rress Association.—Copyright.)

(Received 10 a.m.)

LONDON, ilay _3. As the cables have already indicated, there has been a considerable fall in industrial metals and wool. The fall is less in other commodities, but it is not considered likely to make a very appreciable change in the cost of living at present owing to forward orders booked at the highest rates. Food prices are showing only seasonal declines, while there is small chance of a drop in bread, sugar, or rice. Addressing shareholders of the Fine Cottonspinners' Association at Manchester, Sir Herbert Dixon (chairman) likened the recent speculative activity and recapitalisation of the spinning trade in Lancashire to the South Sea Bubble. A day of reckoning would come as surely as it did then. He held the view that a reduction in values was inevitable, leading to the enforced writing down of capital, with consequent serious loss to present buyers. The newspapers arc giving prominence

to a fall in prices of commodities follow ing the slump in America. Some predict a further general decline, and suggest that it is largely due to tho action of the banks in restricting credits, but so far the decline in most commodities has been very moderate, and the bankers' only effort has been to conserve resources for the use of traders as distinct from speculators. The chief decline is in Egyptian cotton, which has fallen 9d in a week, chiefly because the Egyptian banks pressed its customers to reduce loans, thus compelling numerous operators in Alexandria to Bell, and also to fa.vourable news regarding the prospects of the next crop.— (A. and N.Z. Cable.)