RISING PRICES.

Putaruru Press, Volume XI, Issue 268, 7 September 1933, Page 5

RISING PRICES.

WHAT IS THE CAUSE ? Prominent Publicist’s Opinion. “ What is the cause of the present revival of prices ? ” That is the question shot at me through the post (says “Pro Bono Publico” in the Star). I can only answer that people need goods and are prepared to pay for them.

Take what has happened in regard to pelts as an illustration. At the beginning of the season no one wanted them and the price was almost nominal. In fact it is not so long since the value of a pelt was a bit below what it cost to take it away. To-day, apart from a few small lots, there are no pelts left in New Zealand. We have seen the price go from 6s 6d to 21s 6d and the market cleaned right out.

The story starts with the buying public. If they stop buying goods the retailers can’t clear their shelves, and if the goods don’t go over the counter there are no orders —or very small ones—reaching the manufacturer. The manufacturer stops making for stock and buys supplies only to keep a hand-to-mouth trade going. Buying orders cease to reach New Zealand and the freezing companies can scarcely give their pelts away.

We can’t do anything about it at this end, because our sales depend on a firm in Philadelphia, it may be, and,. its sales depend on people in Dexter, Maine and Memphis, Tennessee, and Seattle, Washington. But when the people in these and a thousand other cities begin to buy light leather goods again, then the orders go from the retailers to the manufacturers, from them to the tanners, and ultimately reach us in New Zealand, where the buyers begin to compete against one another for the pelts. I

To commence with, the revival of trade was due unquestionably to the fact that retailers’ stocks had run very’, low and it needed only a small stimulation of consumer buying to start the ball rolling. And this applies to practically all classes of goods. We at the raw material end do not actually get the full benefit of any revival until competition becomes keen. Just at present we are probably getting less than our share of the recovery, and if the trade revival continues, as we all hope, there will be a still better lift of prices before the end of the year. I base my own hopes on the belief that the present spurt is due in the main to personal and domestic expenditure, indicating a „ revival of personal confidence. If the nations don’t do anything to disturb the movement the price rise should be substantial in all countries that are Aaking steps to stimulate domestic trade, and by next year we should be seeing a revival of international trade.