THE COURSE OF PRICES.

New Zealand Herald, Volume LVII, Issue 17651, 11 December 1920, Page 9

THE COURSE OF PRICES.

OUTLOOK IN BRITAIN. VIEWS OF COMMISSIONER. NO REAL DEPRESSION. In a supplementary review of British trade and prices, Mr. R. W. Dal ton, British Trade Commissioner in New Zealand, says :— The official statement from the Department of Overseas Trade, recently published, says that " dull conditions are likely to prevail for a. few months without any sensational collapse and with a fair prospect of recovery next year." This was exactly my summary of the situation in my last letter. It should j be borne in mind that the slump reports appeared in New Zealand last June, that is nearly six months ago. I admit that at that time prices showed a slight decline, but the majority of prices were firm and some were rising. Five months after prices in the majority of cases show only small falls, and falls which are not at all inconsistent with those temporary periods of quietness which come almost every year in ordinary times. In boom periods of normal times there is always a certain quietness in the holiday season, that is from June to August, and I think' there was nothing in June of this year to I indicate more than a period of this kind. The quietness has become intensified since, of course, and there are unfortunate conditions prevailing in regard to unemployment, but even now there seems to be every chance of a recovery next year, with prices probably a little below the highest level they have reached. But it is quite easy to exaggerate such conditions. 1 shall endeavour to give a few instances of how such exaggerations have arisen. Employment and Solvency. There has been a good deal said about the increase of unemployment at Home. I have no figures for any "period since September, and I am quite prepared to accept the fact that there has been an increase in the past few months, but the following figures are certainly illuminating; they show the percentage of unemployment in the periods referred :—Average for 10 years prior to the war, 4.7 per cent.; July, 1914, 2.8 per cent.; September, 1919, 1.6 per cent.; December, 1919, 3.2 per cent.; average for 1919, 2.4 per cent.; January, 1920, 29 per cent. ; April, 1920, 0.9 per cent.; August, 1920, 1.6 per cent.; September, 1920, 2.2 per cent. Unemployment always increases in winter, of course. Now, as far as bankruptcies are cerned; something has been said in the last week to the effect that bankruptcies for the nine months ended September showed an increase over the previous year of about 100 per cent. This is true," but if a comparison -is made with years prior to the war it will be found that the bankruptcies in the nine months of this year were very much less than half what they were in boom years prior to the war. The figures are as follows: nine months of 1911 (boom developing), 2735; 1912 (boom year), 2657; 1913, 2565: 1920, 1032. . The smallness of the bankruptcy figures in the present. year, therefore, lends weight to the argument that the real depression has not yet come. Bank clearings for the period ended October 20 showed an increase over the same period in the previous year of 45.9 per cent. In the first six months of this year the increase, as compared with the same period of the previous year, was certainly greater (63.7 per cent.), but the bank clearings from July 1 to October 20 of this year were greater than they were in the same period of 1919, the actual figures being as follows:— July 1 to Oct. 26, 1920 f11.537.G9p.000 July 1 to Oct. 26. 1919 9.409.935.000 . Production and Prices! The figures of production of iron and steel also have an important bearing on the situation and in this connection it is to be noted that the production of all kinds of steel in August of this year was 709,000 tons, as compared with the production in July of 789.000 tons, and a monthly average in 1919 of 658,000 tons. The production of hematite and basic pig-iron in August of this year -was 518,000 tons as against 548,000 tons in July, 1920, and a monthly average of 430,000 tons in 1919. In < considering these figures it should be remembered that August is a holiday month and the total of working days was less than in July. Prices of metals are also a good index and the following figures of prices, as shown by cash quotations on the London metal exchange are therefore of interest: June 30 Sept. 30. £ £ Tin .. . . 346 268 Aluminium .. 165 *, 165 Copper .... 85 94 Antimony ..60 52 Spelter .... 41 41 Lead ... .. 35 56 Steel rails 23 25 Steel plates . . 23.50 24.50 Quicksilver 20 16 Hematite 13 13 ClevnUnd.. .. 11.25 11.75 Tinplates . . 3.50 2.80 As far as other prices are concerned it is very difficult to generalise," but careful investigations which I have made here, and information which I have received from Home, go to show that where .prices have fallen _ the fall has been relatively slight and »in many cases prices have actually risen. I know, of course, that Great Britain! is passing through a difficult time and I do not minimise the importance of these difficulties. I do think, however, that the difficulties which have been overcome in the past are greater than the difficulties which now exist and failing any important labour disturbance, I see no reason ,why the new year should not see a complete recovery. A real depression of; slump would be a nvitter of a year or even more and is a very different thing from a temporary dullness.