PRICES FALLING

Otago Witness, Issue 3455, 1 June 1920, Page 25

PRICES FALLING

(By Cable.)

GENERAL DECLINE PREDICTED

LONDON, May 22. There ia a wholesale fall in prices, beginning with foodstuffs and extending to clothing, concurring with the American slump. Many lines are already cheaper.

The newspapers are giving prominence to the fall in the prices of commodities following the slump in America. Some predict a further general decline and suggest that it is largely due to the action of the banks in restricting credits, but so far the • decline in most commodities has been very moderate and the bankers' only effort has been to conserve resources for the use of traders, as distinct from speculators. The chief decline is in Egyptian cotton, which has fallen 9d per lb in a week, chiefly because the Egyptian banks have pressed their customers to reduce their loans, thus compelling numerous operators in Alexandria to sell. Another reason for the fall is the favourable news regarding the prospect of the next cotton crop. As the cables have already indicated, there has been a considerable fall in industrial metals. The fall in wool is less than in other commodities, and it is not considered likely that it will make a very appreciable change in the oost of living at present, owing to forward orders having been booked at the highest rates. Food prices are showing only the usual declines, while there is a small chance of a cheapening of bread, sugar, and rice. Addressing the shareholders of the Fine Cotton Spinners' Association at Man-

Chester, Sir Herbert Dixon (the chairman) likened the recent speculative activity in the recapitalisation of the spinning trada in Lancashire t? the South Sea Bubble. He declared that the day of reckoning would come as surely as it did then. He held the view that a reduction of values was inevitable, leading to the enforced writing down of capital, with consequent serious los6 to present buyers'.

MOVEMENT TO ECONOMISE. LONDON, May 24. Whitsuntide holidays revealed a" strong movement to economise. There wera many fewer visits to the seaside than were expected, despite the beautiful' weather. The newspapers are eagerly di* cussing the fall in the prices of the necessaries of life, but there are no signs of a permanent fall. Indeed, bread and sugar are likely to go higher, and rents are increasing. Nevertheless there is a record slump in boots in Northamptonshire, whera the warehouses are so choked with supplies that a three days' working week is likely to come into operation. The cloth, ing trade in Leeds is also depressed, and factories „ are no longer working at high pressure owing to the orders stopping suddenly. It is evident that many people are unable to buy at the present prices. Tha slump may mean the discharge of many workers.