The sun., 1919-02-04
TRADE HOLDING0FF
FOR LOWER PRICES
All Lines Of Business Show a
General Falling OFF and
Buying Declines.
DEMAND HAS SLACKENED
National City Bank Says There
Is No Cause for Surprise
in Situation.

The difference between war demand
and peace demand is just beginning TO
mako itself apparent In business. This
difference. says the National City Bank
IN It's monthly circular on economic con-
ditlons. made public yesterday. Is that
peace demands will wait II there is a
prospect Of lower prices. while war ie-
mands must be Immediately met, &C.
gardless of price conditions. Because Of
the general falling Off, jobbers and re-
tailers are going slowly IN buying, and
manufacturers are following a similar
course. Another peculiar feature OF
present conditions, the bank says, Is
that stock is coming on the market from
unexpected sources and with a slack de-
rand, The inevitable result is a de.
cline in prices.
There is no mystery in the situation
or cause for surprise over it," the bank
continues, ''On the contrary, develop
rnents are as might have been expected
No general change has occurred, except
that demand in nearly all lines has
'allen of and surely every one knew
that this would occur when the war
came TO an end. Business always hest
tates IN the face OF a fundamental
change 1t came nearly to a dead halt
Hence had shown that war invariably
causes great. industrial activity and
high prices. The transition period from
var TO peace Is inevitably one Of uncer-
tainty. Men wait to see what others do.
Prices are expected to fall how much
robodv can tell but the natural i'm
rulse is 70 delay purchases.
January Always Inactive.
January is not an active month in
trade at any time, but for clearing up
and taking stock Of goods and prospects.
Buyers are never indifferent very long
without making some sellers anxious.
end this was sure to be the case when
accompanied by the cancellation Of Gov
eminent contracts and enormous con-
traction OF war demands
THE Government had bought and held
IN It's warehouses great quantities OF
materials and goods which II would not
Use and which hung over the market
Nobody knew at first what policy the
Government would pursue. Such a stu
alton develops different opinions. and Of
course all parties are not in the same
position Buyers have the upper hand.
and those who want to sell must make
concessions. The announcement Of re-
duct!on of prices at first does little more
han unsetue the market. 1t merely
gives notice that The downward move
Inent has begun and perhaps makes
buyers more timid than before"
The necessity for a reduction OF prices
and labor is pointed out by the bank.
In this country" It says, "prices are
generally maintained and most employ
ers wish 10 maintain them, at least until
readjustment can be made with the
decline OF articles OF consumption. To a
locked, high prices being due to high
wages paid to producera II the pay OF
one group OF workers Is reduced and the
prices of their products decline. the con.
sumers Of these products are gamers at
the expense of that group OF workers.
The latter then have Just claim that
reductlons shall be made in the goods
which they have TO buy. Fairness re-
quires that all shall come down together.
The Crucial Question.
Tho reductions which will affect the
greatest number Of people at once are In
foodstuffs and clothing materials. The
PRODUCERS OF foodstuffs are 30 many ir
number and so widely scattered that any
general combination among them 4
maintain prices has always proved i'm
practicable. Their products respond
quickly to the conditions Of supply and
demand and are now falling, although
no world food situation Is not clear
Certainly they will decline largely by the
end OF another crop year. But as theii
products come down farmers will claim
--ductions in prices OF what they mus
hrv. and this probably will involve wage
reductions in other lines.
Tho crucial question in every indus
'-y is not theoretical or sentimental
one. but the practical one whether the
products OF the industry can be sold II
suflcient volume on given level o.
prices TO afford employment TO all tn
neople who are looking for work in thai
Industry Eventually there will be a dem
orstration, and It will he good policy fo'
both sides to conform to the results Tit
rubNc Is the mai employer, and 4
iossn't pay anybody to quarrel with tn
'uh'ic.
1.-THE labor organizations are Of III
rT'non that Il II better for them 20 pu
p with part time rather than reduce
wage rate established. II low pro
action ana high price. delay the gen
A-al recovery OF industry by causing {
-sduction OF consumption II Is we'll 4
-.member that the laboring people o
~. country are suffering on both side