AMERICAN PRICE SLUMP.

Auckland Star, Issue LI, 24 May 1920, Page 8

AMERICAN PRICE SLUMP.

OVER SPECULATION THE CAUSE.

(By Telegraph.—JSpecial to "Star.")

WELLINGTON', this day.

Opinions collected here from leading traders and a lady recently returned •from America suggest that the price slump in clothing throughout the States is the result of panic due to aver speculation. At an instance of speculative buying' in the United States drapery trades, a lady, who was interviewed, stated that goods usually available for the trade in November and December were all absorbed by speculators in October lost, and when bona fide traders went to buy thoy found almost everything they wanted taken by speculators, from whom they would have to buy, of course at a premium. It was undUuted ■gambling, not fair trading. Supply and 'demand were factors that could not be ignored, but the manipulation of markets by speculators had a great influence upon prices of goods. It seemed anomalous but it was true, that manufacturers were sometimes only too eager to buy back their own goods from speculators at a (high premium. They had had to buy goods made in America and shipped to London to meet American demands.

Mr. S. Kirkcaldie, principal of one of the leafling drapery clothing establishments, corroborated this statement, declaring that goods often .passed through the hands of half a dozen speculators who never saw them and intruded their operations T-pon the legitimate circle of manufacturer, selling agent, jobber (or warehousemen) to the retailer. The textile and clothing trades have their speculators. It is evident from cable messages that they are frantic to sell, and that they have been caught.

It does Tiot follow at all that there has been a genuine fall in prices, or that the present collapse of the speculator heralds a general reduction. On the contrary, everything is against it, adds Mr. Kirkcaldie. We are advised from Manchester that raw cotton, which on March 7th was (od per pound, advanced on March 16th to 2»*d per pound. Scottish woollen manufacturers intimate that they axe already so booked up with orders that they cannot look at new business for 1931. Advices from the Nottingham hosiery manufacturers are to the same effect. Tho whole world is short of clothing, and until that shortage is relieved there /will be no moderation in prices. They may go higher. The British domestic demand itself is enormous, and at present is insatiable. There is a great insistent demand from 'the Continent, and during the past few months from the United States also.