WILL PRICES FALL?

Auckland Star, Volume LI, Issue 125, 26 May 1920, Page 5

WILL PRICES FALL?

FAVOURABLE INDICATIONS.

THE WORLD'S MARKETS.

■MANY CON'PLKrnNG INTERESTS.

(By Telegraph.—Special to "Star.")

[, thia day.

Reports that tie cost ef clothing has r dropped considerably on the 'Home s market have caused great interest in j Christchurch. 'Housewives are asking x whether a fall in prices can ibe expected \ locally. Drapers, on the etrength of < private information, predict that if any ] decrease takee place it will be purely temporary. A representative <nf a lead- ( ing retail establishment said that • managers of drapery concerns have a ] very interesting problem to eettle._ The \ public demand and seek lower prices, j Press cablegrams indicate that lower ] prices rule in Japan and America, and , during the past few daye even in Great 1 Britain itself. At the same time, busi- , ness cables have readied New Zealand , ■within the last eeven daye indicating still further advanc.3 in cotton goods, and within the last fourteen days similar advices liave been received regarding woollen goods. SHORT PERIODS OP UNiLOADING. No one can forecast definitely whether prices will fall to any extent (for at least the next two years. There may be short periods at unloading certain types of stock, which will be confined largely to fashionable attire, principally cloth- J ing and millinery. Stable products are | very difficult to get, and Shipments from ■ the Old Country are coming throughf very elowly. For instance, a £20,000 | order 'was eenfc to London quite recently l ( to buy Manchester cotton goods in the open market, paying the ruling prices. : Advice was immediately cabled back Ihere that the goods were unprocurable, J, and co far only £4,000 worth has been j obtained under cover of that order. Under these circumstances it Jβ not reasonable to expect an all-round decrease in the prices. Every drapery concern -would welcome a continual fall in prices* until the cost of merchandise has receded to a reasonable figure. There i» nothing surer than thai. TOO MUCH GAMBLING. "Prices ■win come back here before long. Indications already manifest this," said a local merchant to a "Sun" representative. " "There has undoubtedly been too much gambling in stocks, and the attitude the banks have taken up will soon affect the. During the past few year* of prosperity numbers of -men started: in business, largely as broken, who had not the necessary training or financial backing. The attitude of the banks at that time allowed these men to gamble, and the cost of goode to the consumer was thue added to." He gave an instance of a man •who lad contracted to buy Japanese goods through Australia. These goods had passed through several hande, and the New Zealand speculator so far has been unable to place them here. Unless he eucceeds—and ruling prices are against him—he will probably go under. That the trade is beginning to Tecognise that a dangerous position lies ahead is "borne out by the fact that many firme, ihis own included, are keeping stocks as low as possible. If this tendency is general in other importing countries the resulting slackening of orders will fee a big factor in the reducing of prices. Discussing the position in America and England, where prices have been cut down to meet a protest against the continued rise in the cost of living, thia merchant stated that if the rices were legitimate serious cuts could not be made. 'H they are being made, then the ■high level of prices was the result of profiteering. Rates under such conditions cannot keep up. The public could do a good deal by refusing to buy excessively dear goods. j CHEAP GERMAN GOODS. It was stated that, apart from the question of sentiment, Australasia lost a big chance of reducing the cost of living by refusing to trade with Germany immediately after peace wae declared. Goods bought then by America and England will shortly make their appeaTance, but at high prices. Yet they were originally purchased under the most favourable conditions of exchange and at bedrock prices. The exchange rate •with Germany ran from 300 to 400 marks to the pound sterling, instead of about 20. On January 28 the exchange rate was 367 marks. This meant fortunes to English and American buyers. America, had really "cleaned <up" Germany of goods, and had even bought large quantities of freehold. Whole blocks of (houses in Berlin had been purchased under favourable rates of exchange by American investors. Now the German exchange rate is down to about 150 marks, and the German Government has put on an export tax of 60 to 150 per cent to adjust exchanges. In addition, nothing can be exported from Germany now except under license. Even France joined in the ruah to trade with Germany. 'Many Trench" perfumes and soaps were bought originally in Germany and re-exported from France.