U.S. SPENDING SPREE ENDING

Wanganui Chronicle, 17 January 1949, Page 4

U.S. SPENDING SPREE ENDING

Decline In Luxury Trade: Florida Reports a Slump

KTW vnprn>^ a v W ’ Reuter s Correspondent. ) NEV YORK (By Airmail).—A decline in luxury trade is providing the first strong evidence that, for the average American the spending spree, is ending. Florida, normally teem inf with a sbimn ndl T g hohda Y’ m T ake . rs . durin S tb.e northern winter, reports i £ ■ 11 ’ a PP e , rs 111 Louisiana, home of the nation’s fur trade shrug their shoulders and say: “The money, she-is gone Furni’ hire sales are lagging from coast to coast and, a few weeks before Christmas stores began holding “clearance sales.” These signs, say the experts, all point to one thing—the spending honeymoon is over. New York newspapers have for weeks been carrying pages of advertisments from hotels and pleasure resorts in Florida; but apparently all the pictures of bathing beauties, palm trees and yachts are not enticing Americans there in the usual numbers. A correspondent of the “Wall Street Journal” says in a report from Miami: “Florida, a pleasant place to measure how much extra money Americans have to spend, seems to be registering low pressure. Early indications are that there is less cash to finance Miami’s 1948-49 gay months than was devoted to the 1947-48 winter, which did not quite measure up to the lavishness of 194647.

“The horses have noticed the difference. The first five days of the racing season have drawn 33,437 people— compared with 43,375 in the same period last year. Wagering is down, too. The figure of those five days this year is 1,760,737 dollars compared with 2,535,868 dollars last year.”

Lighting companies in Florida report that they have had to hire more collectors because people are not paying their bills as promptly as they used to.

Night club managers are not signing up top-flight stars this year until they are satisfied that their clubs

will have enough patrons. Last year, big names like Frank Sinatra were signed up long before the season be-

Reports from Louisiana paint a picture of trappers becoming gloomier as prices of furs fall and demand declines. American women apparently are going to make the old fur coat last longer, or wear a woollen one instead. Half wav through this year’s fur season, some of the old trading houses in New Orleans still have almost a third of last season’s muskrats and minks left in their cold rooms. Many say that they have not seen a Now York fur buyer this season. In 1947, New Orleans dealers received 11/- for large top-grade muskrats and from '£2/10/0 to £5 a skin for mink. This season, mink Is bringing £l/5/0 to a skin. Muskrat is not selling at all. FEELING THE PINCH Furniture stores, too, are feeling the pinch. Some stores are throwing in free lamps with lounge suites. One

is even giving away orchids. Comments from all over the nation show the same trend. Here are typical remarks by executives of various companies: Kahn’s (Philadelphia): "Sales have dropped steadily in October, November and December. There’s no Sign of improvement.” Strand Furniture Company (Binghamton, New York): "Sales are off 15 per cent. We have to work just as hard now to sell a lamp as we used to to sell a living room suite.” A Kansas City retailer: “People used to come in to look and buy. Now they just look.” The clothing industry reveals a similar story. One chain of clothing stores has cut its prices by 20 per cent, and others have fallen into line. Even at the lower prices, shops are empty. Early in December, at a time when business usually raises its prices, many firms began to hold "clearance sales.” They were in most cases, genuine sales with 15/- shirts selling at 12/-, £62/10-0 washing machines at £53/5/0. Some shops began to bring their prices back to normal just before Christmas. Others went the whole hog and began charging real Christmas prices. The overall volume of trade, however, fell below that of the corresponding preChristmas ruAh in 1947. Reasons given for what seems to be a decided slump vary from the Democratic victory in the election to the high cost of living. Most firms fear that President Truman will try to impose an excess profits tax. Almost all believe that taxation on higher salaries and corporate profits will be more severe. For that reason, many firms are holding off until the Democrats make their plans clear. So far, however, there has been no major price break. Newspaper surveys show that prices of most goods are levelling off, with no appreciable dron. Several times since price controls were lifted, the American market has seemed to be faltering, only to pick up again and send prices surging further upward. Each time the economists explained it. as a “breath-gr.inlng” operation. This, time, the market seems to be taking its time to get its breath.