SEEKING NEW LEVELS.

New Zealand Herald, Volume LVIII, Issue 17696, 3 February 1921, Page 5

SEEKING NEW LEVELS.

COMMERCE IN UNITED STATES.

EASIER RATES FOR MONEY.

MORE CONFIDENCE SHOWN

An interesting survey of economic con- ! dition3 in the United States in December ' has been furnished by the National Bank of Commerce in New York. The report f states that the controlling and outstanding factor to-day is the relatively small movement of raw materials and manufactured goods even at reduced prices. This is j because stocks of goods in the hands of ! retailers are sufficient to meet the needs \ of a somewhat lessened demand of the | consuming public. Consumers are restricts ! ing their buying in part because of some ' curtailment of their purchasing power but j even more because of a willingness to wait j until retail prices reflect the lower levels i of primary prices.

Improvement of business activity awaits i adjustment of retail price* to a level | satisfactory to the public This necessary j readjustment of prices to consumers is now under way and will be expected to make more rapid progress in the future, j Its progress will be hastened by the com- ' ing into the market of goods which are j already being produced on lower cost ] levels for labour and material.

Sentiment respecting forward cordij tions, which until lately had been almost ! uniformly depressed, is now noticeably i improving in many directions. This better ; feeling does not go to the point of optim- '■ i ism, but there is evident a degree of con- , i fidence which was previously lacking, in j , the ability of commerce and industry to \ meeti the future successfully and to conduct business with reasonable profit. ; The peak of commercial borrowing may I Ibe said definitely to have passed, and ' from now on there should be a gradual I ! and moderate reduction in the volume of j bank loans. The pressure for funds is , | already less general. Call money, which , was from 9 to 10 per cent, during most i of tha, preceding month, has during the | current period ranged between 5 and 7 , per cent., ruling at the latter figure, and I : closing at 6 per cent.

The downward price movement, in progress in the case of a few commodities a year ago, and for all important classes J of raw materials for many months past, ' continued without interruption daring the month from November 16 to December 15. Even in a period of generally falling prices, the future course of the price of J each commodity is to be judged by the supply of and the demand for that com- ! modity. At present every commodity must , be considered also in relation to the pres- J ent world-wide situation, the dominant feature of which is lack of purchasing power in Europe.

Curtailment of employment has taken place in every industry. November official returns of the New York Industrial Commission 6how 200,000 fewer workers in reporting factories of the State than in March. Reports indicate large numbers unemployed in the other principal industrial areas of the country. At the same time there has been an increasing influx of immigrants. Wage reductions have occurred in the textile industries, shoe manufacturing, sugar refining' and other lines in which price declines have been conspicuous. Decreased purchasing power temporarily follows declines in wages, but decreased cost of production ultimately brings lower prices. In time these factors, together with increased efficiency of labour, will offset the temporary loss of buying power.