FINANCE AND COMMERCE.

Press, Volume LXVI, Issue 19983, 18 July 1930, Page 12

FINANCE AND COMMERCE.

DEPRESSION IN TKAL>E. REDUCED DEMAND FOR GOODS. CONDITIONS IN AMERICA. tCZOH 00* OWN COaK»dI'OSDJ).N X.! SAN FRANCISCO, June 19. The manner in which stock values have crashed almost daily on the New York Stock Exchange represents a glaring lack of confidence in the great corporations, factories, and industries, which those shares typify in America. It is ti'UH that many of these concerns have teen issuing monthly and quarterly reports that have chronicled depleted returns, but the extent of the stock crash has far outdistanced the lessened output from the American factories.

hi a word, as one converses, with the average citizen of the country, there is an entire absence of optimism that was present in carloads but a few weeks ago. Then it was advertised from the Atlantic to the Pacific that America was in store for one of the most prosperous times in the country's annals, rrom Washington everyone was told in . a gush of enthusiasm that "prosperity is around the corner." The so-called ''Hoover boom" was advertised daily in the news dispatches, and stock values Purged, but in the meantime parades of the unemployed were in progress in most of the 'arge centres of population, and organised Labour officials were regaling the country with staggering statistics of the enforced idleness in industrial circles. Gradually the "higherups" began to realise that all was not well with the economic condition of the country. Railway earnings fell off and factories reported that there was a reduced demand for their products. 'Furthermore, countries abroad did not appear to order to the extent formerly from the United States. Although countries overseas were rehabilitating themselves to a large extent, the story was circulated in America that these overseas lands were not able to make their purchases from the United States owing to "poverty." Meanwhile, Uncle Sam was wallowing in possession of the world's largest stove of gold. Tariff Causes Havoc. At last the American manufacturers began to realise that with the passing of Uncle Sam's boosted tariff schedule, effectually shutting out 1 the -world's products, outside lands were defending themselves by passing similar higher tariffs, and were trying to depend on their own goods as far as possible. It has now been discovered that the passing of the American tariff has increased the domestic prices of many .. articles and has not improved home trade or bettered the meagre wages paid to artisans. A new. movement h*as started where one State is organised against the to the extent that each State seeks to be self-supporting as far as possible. Instead of importing into a State building materials from outside ' States, a State now uses a substitute founa in that home State and furnishes employment- for the seasonal, idle. '-ISljtfW ■•M * Wb *« been in progress, every" "boss'> in the eountry has been practising retrenchment, jby discharging overy employee he possibly could do without, and frequently replacing the higher-paid employee by a junior or woman worker at a much lower scale of pay. The air has been surcharged with a foeling of something in the form of a ■panic industrially happening and there has been a "tendency to bay only the barest necessities, brnging about a new buyers' strike against luxuries. This has had a disastrous effect upon the largo department shops and the managment has had to endeavour to drum up business by glaring large full-page advertisements in the. daily press, calling for "Mid-Month Sales," "End-of-the Month Sales," "Bargain/Sales,' and a wore of other methods to intrigue the buyer into the shops. '' ooaunodity Pricea Fall. ■ Only when specially reduced prices were in evidence could the consumers be induced to make a purchase. Groceries have been cut down. in price and sugar is now at the lowest price withm UWng memory, selling for less than 2d a pound in many instances. There has been each a, tremendous fo'Cah; fornla's choicest canned fruit that it has been offered to the public at prices scarcely imaginable. The shopkeepers have been content to take the merest margin of profit in order to provide fundi to meet their creditors.. Even some of the banking institutions have felt the pinch of bad times, and in Florida several banks have been compelled to close their doors through 'the boom coming to an end. In the last week, there were 486 bankruptcies in the country, most of them attributed to the economic crisis existing in the States. . . ■ . _ Not only have prices of foodstuffs been reduced, but the amusement purveyors of the country, have noticed that the theatre-loving people pf America have refrained from general patronage of the amusement houses to the extent generally observed in the past. The patrons have sought something cheaper 'nnd they have tried the cinemas of the cheaper" class. The leading: theatres and vaudeville halls, as well as the hitherto expensive picture houses, have been compelled to cut their prices in half in order to get custom. This has had a disastrous effect on theatre stocks on the New York Stock Exchange and the values of those stocks have fallen immeasureably. Taxioab fares have been cut in, a large degree, and at the time of writing a gasoline war has been started with the prices of petrol reduced from 20 cents (10i) to 15 cents a gallon, with threats of further cutting the charge to 9 cents a gallon. The oil companies, with an enormous surplus of gasoline on hand, have determined to coax .the motorists to increase their travelling propensity in California. The "gas war" is spreading to several other ,' States.'and it is expected that it will > " cover the whole country, as the big companies are hacking it strongly.

' Democrats and Bepnblicans. . The situation has its crumbs of comfort for the Democrats, who are busy ''panning" the Republican administration, for periods of national industrial stress are only supposed to occur during the time the Democrats have the reins of office, in Washington. Now, with the "Hoover boom" exploded, the opposition, political party is daily criticising the powers that be, and one fiery Senator has even gone so far as to threaten to try to impeach the President, because of .the precarious condition of the country economically. President Hoover, however, has done his utmost to bring about (t prosperous condition in America, and to bring the American people back to equipoise, but,, , hfi is powerless to curb the insane njania of the people of the United States to indulge in eambliug on the New'Tork Stock. Exchange and .other HUf 'of spwcnlatife value's in tho coun- , try. During the present protracted stock trash, ktfwlwds of thoawnda of m»r-

ginul. speculators have been wiped out of the market, owing to being unable, to furnish a larger margin to their accounts owing to the depleted values during the spectacular crash in stocks. In consequence of ihe everlasting gambling nationally building construction has been inordinately slow, with real estate. values at low ebb. Everything possible lias'been done to urge speculators to indulge in building by the lowering of interest rates at_ the banks and other loaning institutions, but the stock gambling continues. Motor Trade Hit Badly.

On* of the worst hit industries in America to feel the bad times is that of .automobile manufacturing and its accessories. New models of the classiest design have been placet] on the market, but there were few buyers. Then the prices of motor-cars were lowered, with easy terms to prospective purchasers, but even then very few sales were recorded; in fact, some of last season's cars were still in the show rooms awaiting owners. The people's attitude of retrenchment first or all affected the motor-car business, for the people decided to jazz up their last season's motor and make shift until better times arrived. The result was a gigantie falling off in the sales of new cars.

Summing up, it may be said that Americans in the present economic phase Pre spending only for necessities, but will not refrain from plunging into the world of speculation on the stock expanses in various parts of the land.

Many have tired waiting for the much heralded prosperity era, and resolved to make or break themselves in wildest forms of gambling on fluc+uatin" stock Tt is h?>rd t-o----predict when a change of mind will occur and Americans will settle down to a ea?ier state of affairs*

TO IMPROVE TRADE. ADVERTISING A NECESSITY. Diagnosing the economic ills of Australia in an interview on the Makura shortly before she sailed from Wellington for San Francisco, Mr B. N. Fryer, of Sydney, expressed the conviction that the trouble across the Tasman was the outcome of a deceptive philosophy working in the body politic. He deplored the want of confidence in the country, and emphasised that propaganda in the hands of optimistic men could do much to build up industry. Mr Fryer, who is president of the Printing Industry Craftsmen of Australia, is on his way to attend the annual conference of the International Association of Printing House Craftsmen, which will open in Los Angeles on October 16th.

"Granting the premise that mind influences matter," said Mr Fryer, "can we not assume that printing, which circulates mind-stuff, if in sufficient quantity with the right mind-stuff, will affeet conditionst Can printing advocating ways to. better times hasten the economic cycle back to the mean; from depression back to normal?" History Repeating Itself.

The present Australian depression, deeper and' more permanent than elsewhere, was the outcome of a deceptive philosophy working in the body politic, said "MiWxjvt. It had, been all too Teadiiy assumed that .immediate comfort wa**pe'rnianeht security, and as onco before'in histArVi the peasantry of Europe embraced serfdom as an escape from individual responsibility, so was history repeating itself, in an industrial democracy that was declining, to embraee bureaucratic materialism, a form of" modified slavery. Beturn to normal might be made by the adoption of another sounder and freer philosophy of life. .■■..••.'■

Mr'-Fryer said that in a recital of long anl short-term factors in the making of conditions, Professor E. Ronald Walker, of the Faculty of Economics at Sydney University, brought in One in particular that was fundamental: "The severity of the present depression was owing, in a considerable degree, to the reaction and the pessimism that inevitably followed a period- of optimism and business expansion." That was, the growing confidence at a time when., everyone was tending to trade on credit approached cycle peak, toppled over, and gave place to want of confidence. That was a recurrent cycle in human operations regardless of place, period, political or economic system. Night and day followed one another with unfailing regularity regardless of the nostrums that were going to alter the whole scheme of things forty-eight hours before the day after to-morrow. To all this, the answer was propaganda. "Advertise or Bust." "And propaganda," said Mr Fryer, f'means printing. Propaganda in itself is neither beneficial nor malificent. It may be taken up, redirected, and used in public welfare. Propaganda may do much to build up industry in hands of.optimistic men.' A« it is, it is running around loose doing considerable damage. Printing is obviously the St. George of the situation:.' Advertise or Bust' is the slogan." The population was still on deck, and must be fed, clothed, and housed, added Mr Fryer. Transportation must still proceed. There was no use repining} that drained nerve power. There was no use listening to wildest instant action theories of regeneration; that was worse than racecourse speculation. To change Disraeli's aphorism, progress was a matter of nerve; it was peculiarly applicable to the present situation in Australia. Nerve lived on action, and business was called' upon to take the initiative from the political powers. Advertising and propaganda could do it. ....... Mr R.. Hay, who is vice-president of Printing Industry Craftsmen of Australia, is well-known among the printers of Wellington.

DAIRY PRODUCTION. AN AUCKLAND RECORD. [THE PBESB Special Senrice.] . AUCKLAND, July 17. The 1929-30 dairying year in the Auckland province which ended on June 30th gave not only a new record in the production of butter-fat but a margin sufficient to offset the lower range of prices on the London market and leave a small surplus. The season's yield was 229,300,0001b of butter-fat, an increase of over 19,000,0001b on the previous record year of 1928-29, when production just topped the 200,000,0001b mark. Based on an average pay-out of Is 4{d, the yield of the 1928-29 season was worth to the province approximately £7,697,000. The forecast earlier in the year that the average pay-out for the season which has just ended would be in the vicinity of Is 3d per lb is borne out by the annual reports of several representative dairy companies, and on this basis the output for 1929-30. will return approximately £8,081,000, or £384,000' more than the gross return tot 1928-29.