READJUSTMENT OF VALUES.

Poverty Bay Herald, Volume XLVII, Issue 15466, 10 March 1921, Page 4

READJUSTMENT OF VALUES.

COMMERCIAL FAILURE IN THE UNITED STATES. ' Writing from New York on January 6 to a Palmerston North firm, one fif the largo export merchants of the United States, whp transacts considerable business with Australia and New Zealand business establishments says There are many indications that tho month of December marked the culmination of. the ■acute stage of the world wide readjustment- of values which has been proceeding for the last few: months. The situation at present is far from satisfactory, but it- is felt that the worst is now known and that the future developments can he successfully dealt with, t'he volume of commercial failures during the month was greater than that of any other month for. many years, being no less than 59,000,000 dollars of 1 «nl>ili- t ties compared with only 31,000,000 for the month previous and 8,000,000 for December 1919. The world-wide collapse of prices for commodities is, of course, tho underlying cause. This has apparently about run its.course in regard to such basic commodities as wool, cotton, copper, grain, silk, leather and rubber.. These, and many oilier of lesser importance, seem now at levels where commitments may bo entered into involving only the usual business, risks. In addition to tho large number of actual, failures, it is no secret that many important manufacturing concerns are now in tlio hands, of jlieir bankers.. and • after the crisis may bo reorganised or liquidated as conditions may dictate. Most of these companies have commodities of one sort and another to dispose of and are also heavy buyers of raw materials, ■of which they- are unable to accept delivery, and as tho same state of affairs exists in all parts of the world, commerce must be much restricted for some months to come, until an adjustment can be reached in these matters. Tlio falling off in the export demand lias caused unemployment and farmers are curtailing their purchases.' Since the first of the year many mills and factories have resumed operations on part time, and in numerous instances wages have been reduced. Tlio textile mills, both cotton and woollen,-have quite generally cut .-wages 22J) per cent., while other lines of industry bavo made reductions of from 10 to 30 per cent. The change that lias come about dining the past year in business conditions throughout the world is, indeed, remarkable, and has brought misfortune To many, yet it is '.recognised that something' of the sort was necessary- to bring about a return to sounder and more normal times.