FALLING PRICES

Evening Post, Volume CVII, Issue 96, 27 April 1929, Page 14

FALLING PRICES

EFFECT ON LOCAL TRADE

POLITICAL ASPECT

(By Telegraph.) (Special to "The Evening Post.")

AUCKLAND, This Day,

Trade depression was discussed yesterday by an Auckland merchant. Ho pointed out several factors that contributed to dull trade conditions in the face of record exports, and a big'favourable trado balance. "Wo have experienced the most trying year since the war," he said. "We have had to hold large stocks against falling prices and a of those stocks has had continually to bo sold at a loss. This has all made for restricted proiits. Turnover has barely been maintained and proiits are decreasing. The lack of elasticity in awards has made it imposisblo to reduce overhead charges to meet the situation. .Recently 1 have studied ten balance-sheets, and in each case the proiit was lower than last year. On the one hand there is the effect of depression, the fall of prices, from which a trader has no escape, and on the other an overhead fixed largely by award wages." The merchant contended that there should be some elasticity in the awards to meet fluctuations in the volume and profit of business. The consequence of the present situation was that adult unemployment was increased. Merchants were often faced with a rise in wages j for a youth, for no other reason than that he had had a birthday. At certain ages increases were provided for in awards, and sometimes the only course was to discharge the young man j who might have been carried at a wage lower than the award for the meantime, and fill his place by a boy. "As a matter of fact," he said, "(and i am not a pessimist by nature), a number of city concerns are coiigratu-! la ting themselves if they have been | able'to conserve their capital without paying a dividend. "There is a political aspect to the matter. Unfortunately, the public have not gained sufficient confidence in the present Administration to make it loosen its money. One of the great mistakes of the Government has been to pay full wages for the relief of unemployment. The result is plain to those who are observant. With the knowledge that work will be found for them on public works' at full rates of pay, many men are not hustling for themselves, and some are leaving jobs to get relief work. Th.c whole of the lower stratum of'labour, has thus been disturbed, and the effect goes far in the trading world, "Yes, the country buying is good. It is better than it was this time last year, and accounts are being settlet' more promptly. It is the town trade that is causing trouble. There is no buoyancy in it whatever. Cities appear to be top-heavy for the productiveness uf the country. At present they cannot find occupation for all who want it. the cities there is a slow awakening to the fact that in the country there is a steady and a sure living, but many shrink from it because it involves the sacrifice of certain town luxuries to which they have become accustomed. Yet there is plenty of money in the banks. 'So much indeed that business men are little anxious that the banks may find employment for some of it outside the country." ':