The sun. [volume] (New York [N.Y.]) 1916-1920, 1919-08-12
Runaway Market Created.

Runaway Market Created.
The situation Is not unlike that of
.917. Some of the publishers at that
line were stampeded by alArmist re-
ports into buying more paper than they
actually required, with the result that
shortage ensued and a runaway mar
set was created. to the general advan-
age OF nobody, except perhaps a few
If the smaller producers who depend
more or less upon taking advantage OF
exceptional conditions from which to de-
i've their profits. 1t turned out that
he scare was Ill founded No one was
obliged to go without paper. while prices
as a whole remained quite stable
Forecasting the paper market is al
best hazardous undertaking. as there
are plenty of instances. apart from the
one have mentioned, to prove. There
Is, for example, the classic example of
the American Newspaper Publishers As
sociation's special paper committees at
tempt throughout the fall OF 1917 and
the first six months of 1918, by a series
Of bearish bulletins. to persuade the pub
fishers that everything indicated a drop
In the price of paper. although manu-
featuring costs and the prices of raw
materials were ascending at a lively
rate throughout the period. The COM
mittee had to make complete volta
face in June, 1918, when II turned
around and urged publishers to buy
heavily" as prices were bound to in
crease.
The fact Is that the United States
market for news print is extremely
sensitive and Is subject 20 violent
fluctuations. A seemingly Threatened
shortage, predicating a strong market
for an indefinite period, has frequently
been turned overnight into a surplus,
with mills loaded up with unstable or
hard to move stock. BY contrast, there
have been instances when everything
pointed toward an early slump In the
market. leading some OF the mills to
drop their prices in the expectation of
an oversupply, only TO find that a sud-
den demand had sprung up unannounced,
resulting in general stiffening OF cur
rent market prices and a scramble
among buyers to &c. in supplies. rs'
Exports an Important Factor.
Just at present there are many fac
tors having bearing on the situation
Foreign exports constitute one of the
principal of these. II Is true that the
foreign trade Is looking up. and that Ca
madam and American producers are
eager to cultivate II; but this trade is In
volved in many difficulties. The ship
ping situation affords a very practical
difficulty, especially for Canadian pro-
ducers Then. too, the deprecated value
of sterling exchange Is another serious
factor. Formerly all South Americ{p i'm
ports were paid for with exchange drawn
on London. The present deprecated
value OF sterling exchange places a
handicap OF about IL per cent. against
the exporter II he accepts II in settle
ment OF his accounts; or, II he demands
payment In American dollars, the i'm
porter is saddled with the added burden
i'm either case adding to the difficulties
OF merchandising the products
On the other hand German and some
other European currencies are depreci-
uted below even that of Great Britain.
The result is that England can buy pa
per and other commodities in these coun-
tries at a discount of more than 20 per
cent. as compared with American and
prices. Sentiment 1t might
be urged would stand in the way OF any
such commerce, but we all know that SEN
timent does not go very far In d contest
with dollars where trade is concerned.
Even the grain situation affects the
paper export business to some extent,
while the Industrial situation is very
decided factor. Australia. for instance,
has much surplus wheat to sell. and is
trading part Of 1t for European news
print which she might otherwise buy
from Canada, as OF course we are In no
need Of Importing wheat These Things