COMMODITY PRICES.

Manawatu Standard, Volume LVIII, Issue 78, 1 March 1938, Page 6

COMMODITY PRICES.

According to a message from Washington President Roosevelt has expressed the opinion that the present price levels of commodities and raw materials are too low, and that they should make an upward movement. This vietv will receive the endorsement of everyone. But who or what is responsible for the present low levels? If anyone is responsible it is President Roosevelt and his Administration. During his first term of office his main aim was to increase the purchasing power of the consumer, and to provide cheap money to help industries, and in furtherance of the latter the gold content of the dollar was reduced by half, and the price of gold was advanced from 85s to 140 s. Those who possessed dollars suddenly found their money doubled —or what is the same thing the dollar would buy twice as much as it did. Huge public works schemes and similar undertakings provided work for millions, and gradually the economic conditions improved. But the Avelter of money forced up prices and the cost of living. However, all went well until August of last year, _ when there was a sudden break in prices on the New York Stock Exchange, which was quickly communicated to the industries of the country. The industries in their turn rapidly slowed down production, throwing thousands out of employment, and there was a sharp decline in consumer purchasing power. Now the President declares that the price levels of commodities are too low. When there is a sharp and rapid decline in tfie consumptive demand, and manufacturers curtail production, it is inevitable that prices of commodities and raw materials should fall. In addition to this aspect of the matter the President interfered with the relationship between employer and employed, with the result that the Wagner Wages and Hours Act was placed on the Statute Book. This gave to the workers the right of collective bargaining and brought into the field a new labour organisation known as the Committee of Industrial Organisation (C. 1.0. for short;. This organisation, under the leadership of Mr John L. Lewis, took up a militant attitude from the start, and it will be remembered that there were large-scale strikes in the iron and steel trades and the motor manufacturing industry. However, the C. 1.0. managed to get several agreements signed, and although these were made on several different dates, they were all timed to expire on February 28. Early in the year President Roosevelt called a conference of business leaders and about fifty attended. They were invited to co-operate with the Administration to revive general business. The leaders agreed to assist, but demanded a radical revision of the Wages and Hours Bill. In the meanwhile there has been no revival in business in the United States; on the contrary it seems to have receded further. During the past two or three weeks there has been dullness in all markets,, including the Stock Exchanges. This dullness can be attributed to the uncertainty of the position. The labour agreements, as stated above, are now expiring and the question is: How will both parties react to a new agreement ? Labour is bound to demand something more than it has already gained, and industry will resist not only granting further demands, but also will insist upon some reduction of the demands already granted.