LOWER PRICES IN SIGHT

Otago Witness, Issue 3510, 21 June 1921, Page 50

LOWER PRICES IN SIGHT

MELBOURNE MERCHANT’S VIEW. That prices in the so*goods trade are now falling rapidly, and that this movement will be accentuated when the present slump in other parts of the world has had ■ time to make its effects felt here, was the opinion expressed in an interview with a Melbourne Argus representative by Mr Sydney Myer, head of the firm of Mver’s Pty. (Limited). He has been backwards and forwards between Australia and Europe and America since August, 1918, a.nd lias just returned from the United States. ” I was in America when everything was booming,” he said. “ Prices of shares were never higher, and those cf industrial stocks were quoted at premiums of 75 and 100 per cent. That wai in 1919, and up to April, 19-20, when everybody thought that one had only to be in business to make a fortune. When L was there again, prices had begun to drop. Everybody was nervous, and a slump came. Tlie movement commenced about Jinibx lust year, when ihe buying public ‘went on strike.’ It has not yet affected prices of goods for export to Australia, on account of the forward buying which has taken place. For the last six years buyers have been so eager to obtain the 'goods that they have placed theT orders six, 12. even 18 months ahead Merchandise which will come to Australia from next August, however, will be anything from 25 to 5!) per cent. low.r. Yet prices here are tumbling down now, and large Melbourne firms are standing the losses. In America =:m? firms had to lose as much as 10 and 20 million dollars. Largo concerns had to reorganise; many smaller ones went out o f business. The Stock Exchange has been falling Shares in a wellknown motor car industry fell from 59 to 11 dollars, those of another from 250 to 45 dollars. Cotton fell from GO cents a lb to 13 cents. The rale of exchange is going up, this movement being, of course, favourable to us. Nobody would be better pleased than Americans to see exchange "normal.” Mr Myer said that business was improving in America now. Prices were coming down; the workers had recognised the situation, and in many instances wages had been reduced by 20 to 25 per cent.. Everybody was concentrating on increased production .13 the only means of meeting present-day conditens, lowering the coat r.f living, maintaining the export trade, and keeping all mills and factoi i s going. Therein lay a lesson for Australia. People all over the world were becoming mere critical and more careful in spending, and unless merchandise came down .there would be no business at all America was anxious to do business with Australia, and there were lots of our raw materials that she needed Referring to the effect on Australia when German trade was permitted to be resumed, particularly in relation to the sale of v.ool, Mr Myer said that Germany would certainly obtain a fair share of Australian trade. “Of course she will be a tremendous buyer of our raw products. The best way to get rid of our 2,000,000 bales of wool is to sell it to Germany. She iias no cash to pay, but good short-term Government bonds—say, with a currency of three, four, or five years—would be a wonderful asset for Australia. If Germany is allowed to trade freely with the whole world, the mark, which is worth about Id to-day, ought to be worth 2d or 3d by tho time the bonds fall due. In addition, there will be the interest. That will so'vo the problem of our v.-001. There are millions of people in Germany and Austria who have been wearing paper suits for four or five years, and they need wool very badly.” Reverting to Australian conditions in the soitgoods trade, Mr Mver said that Melbourne people would reap the benefit of lower prices practically from now on. in anticipation cf cheaper supplies from England and America. Already the trade generally had placed largo orders at the lower prices.