New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1900-02-28
HEALTHY YIELDING IN PRICES.

In three important branches of industry yield
ing of prices has begun. In iron and steel prod
ucts the highest average of prices reached
far back November 1, and it Is surprising
that the decline in nearly four months has aver
aged only per cent. In wool 1t has continued
behind unchanged quotations for about two
months IN private sales at various concessions,
but has grown more open and general within
the last fortnight, while the concessions in wool
len goods have yet been slight. In leather
the highest point was reached January 10 al
though hides at Chicago had been gradually
yielding ever since December 13, but the high
est average in boots and shoes was not reached
until the third week in January. In all the
yielding has been but slight-n boots and shoes
not yet 1 per cent; in leather, from the highest
point only per cent, and in hides only 81 per
cent In cotton goods a similar reaction has
been prevented thus far, 1t is probable, by the
strength of speculation in raw cotton.
This yielding of prices Is In all respects a
healthy change. 1t is necessary for the pros
perity of industry that the extreme prices which
were asked and obtained at times when the de-
mand greatly exceeded the supply, and when
for every product not covered by previous con-
tract there were several anxious bidders, should
not be allowed to retard indefinitely the de-
mand for consumption. There abundant
evidence that business was hindered materially
before the yielding In leather or In wool began
In spite Of very heavy orders for certain kinds
Of woOllen and worsted goods there a
doubtful market for some and a rapid increase
of cancellations which operated strongly to
hinder further buying until prices had been re-
vised. The wool operators held on nOminaly
without yielding until 1t was seen that the great
orders taken by many of the mills did not cause
h1,--
held on until large proportion of the boot and
shoe works were close to stOppage or Curtal-
ment of work because their orders had for
months fallen much below their producing ca
pacty.
The reaction In the iron industry would be
more healthy in appearance If it were extended
to all producers The fact that prices in some
lines have not yet been reduced a fraction from
the highest point yet touched, although others
have declined from II to 20 per cent, is in part
n result of legitimate and natural causes. The
rail mills, for instance have their entire output
sold for nearly or quite the whole year, and
have no occasion to accept lower prices for de-
livery many months ahead. To some extent this
is also true Of other products which have not
yet declined in price. No new competitors in
these particular lines have come forward TO seek
new business nor has a satisfactory percentage
or orders at current prices Deen guaranteed Dy
other works, as is reported in the case of one
new rail mill. But in other lines even the most
stringent compacts have not prevented such
| concessions as were found necessary to secure
business, although in the refined bar manufact-
ure there was reported a hot time at a recent
meeting. with much recriminatiOn. But new
works are being pushed to completion rapidly in
many branches and the decline in prices as yet
is very small in comparison with the enormous
rise last year.
The thing most important to be kept in mind
is that such reactions as these are not disaS-
! trous In character or tendency, but alto
gether healthful and for the best interests Of
the producers. Unnaturally high prices, such
as are caused by an unexpected and temporary
excess of demand over supply. are always main
tanned by some producers and dealers long
! below the normal quantity. 1t follows that
some works are forced to stop or to work part
! force at a loss, that some dealers have to sus-
tain losses in working against a slowly settling
| market, and that the reduction in earnings and
profits cuts down the purchasing power for
! some time. While the unnatural prices continue
| they draw others into business which prom
ises exceptional profit If the product can be Sold
and these presently spoil the business of those
! own investments Speedy return to normal con-
dtions and prices is. after all, the only remedy
available when such an upheaval as that of last
| year has occurred.