Evening journal., 1919-02-05
TRADE Holding OFF
FOR Lower Prices
All Lines Show a Genera
Falling Off and Buy
ing Declines
DEMAND FOR GOODS
HAS SLA(KENED

NEW YORK. Feb. 5.-The difference
between war demand and peace demand
is just beginning to make itself appar-
ent In business. This difference, says
the National City Bank in its monthly
circular on economic conditions, made
public. is that peace demands will wait
II there Is a prospect OF lower prices,
while war demands must be immedi-
ately met, regardless Of price cOndl-
tions. Because OF the general falling or,
jobbers and retailers are going slowly
In buying, and manufacturers are fol-
lowing a similar course. Another pc
culiar feature OF present conditions, the
bank says, Is that stock is coming on
the market from unexpected sources
and with a slack demand. The inevita-
Bile result is a decline In prices.
There Is no mystery In the situation
or cause for surprise over it," the bank
continues. "On the contrary. Develop
ments are as might have been expected.
No general change has occurred, eX-
cept that demand In nearly all lines
has fallen OF and surely every one
knew that this would occur when the
war came to an end. Business always
hesitates In the face OF a fundamental
change. II came nearly to a dead halt
when the war broke out, although ex-
perlence had shown that war inyaria-
bly, causes great industrial activity and
high prices. The transition period from
war 10 peace is inevitably one Of un-
certainty. Men wait to see what others
do. Prices are expected 10 fall, how
much nobody can tell. but the natural
impulse Is 10 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 pros
poets. Buyers are never Indifferent very
long without making some sellers anx-
iOus, and this was sure TO be the case
when accompanied by the cancellation
Of government contracts and enormous
contraction OF war demands.
"The government had bought and
held in its warehouses great quantities
Of, materials and goods which II would
not use and which hung over the mar
ket. Nobody knew at FIRST what policy
the government would pursue. such
a situation develops different opinions,
and Of course all parties are not in the
same position. Buyers have the upper
hand, and those who want 10 sell must
make concessions. The announcement
Of reduction OF prices at flrst does little
more than unsettle the market II
merely gives notice that the downward
movement 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, nd most employ
ers wish 10 maintain them. at least
until & readjustment can be made with
the decline OF articles OF consumption.
To g great extent wages and prices are
interlocked, high prices being due to
high wages paid to producers. II the
pay Of one group Of workers Is reduced
and the prices Of their products de-
cline, the consumers OF these products
are gamers at the expense Of that group
OF workers. The later then have just
claim that reductions shall be made In
the goods which they have to buy.
Fairness requires that all shall come
down together.
The Crucial Question.
"The reduction which will affect the
greatest number Of people at once are
IN foodstuffs and clothing materials. The
producers OF foodstuffs are so many In
number and so widely scattered that
any general combination among them
TO maintain prices has always proved
impracticable Their products respond
quickly 10 the conditions OF supply and
demand and are now falling, although
the world food situation Is not clear.
Certainly they will decline largely by
the end OF another crop year. But as
their products come down farmers will
claim reductions in prices Of what they
must buy, and this probably will IN
volve wage reductions In other lines.
The crucial question In every indus
try Is not a theoritical or sentimental
one. but the practical one whether the
products Of the industry can be sold In
suflcient volume on a given letel Of
prices to afford employment to all the
people who are looking for work in that
Industry Eventually there will be a
demonstration. and Il will be good pol
icy for both sides TO conform to the
results. The public Is the final en-
ployer. and 1t doesn't pay anybody 70
quarrel with the public.
"The labor ORGANIZATIONS are OF the
opinion that II Is better for them to put
up with part time rather than reduce
wage rate established, II low pro-
duction and hieh prices delay the gen
eral recovery OF industry by causing a
reduction NJ consumptlon. u Is well 10
remember that the laborins people OF
the country are lffering on both sides
OF the deadlock"