The Covington leader. (Covington, Tenn.) 18??-current, 1920-09-02
DROP IN HIGH
PRICES SIGHTED
RESERVE BOARD THINKS LIV.
ING COST GOING DOWN
Speculation Checked-Labor More
NEUTRALITY-SUSPICIOUS. Called to De-
pressed Condition Of Leather, Cot
ton and Silk Markets.

Washington. August 27.-Markec
indications that living costs appar.
emily have started on their long
Il awaited fall was said by the federal
reserve board yesterday to be con-
tanned in its latest reports An i'm
portant downward tendency in prices
Of all commodities excepting food is
evidenced in all parts Of the country
the board stated, adding that a
sharp reduction in the price Of raw
products even-forecast lower food
prices.
The board, in commenting on the
price changes, said there had been a
pronounced checking" of specula-
ton as well as a definite, although
slight increase in general efficiency
and an equally positive yet. limited
eurtailment of extravagant expendi-
ture and Unnecessary borrowing"
There has been also a sustained ten
dency toward the paying off of loans
secured by government and other
bonds and securities. The boards re-
ports reveal that within the last two
months price changes have been
marked in all basic raw products. but
have been most noticeable in wool,
silk and leather. These reductions
are said to have been accompanied
generally by corresponding drop in
prices in the retail field on clothing
and shoes and several other staples.
The downward tendency Of
prices" the board said, "is not to be
explained >by reference to. any one
cause. but is the outcome of per
plexity of factors. In wool. the
termination of government control in
various parts of the world and the
steady marketing of the raw supply
held by the United States govern
ment has had an important effect.
A depressed situation" was said
to exist in the leather and shoe in
dustry. Shoe manufacturers are slow
in placing orders with leather deal
ers, with the result that prices on
raw material have suffered a heavy
decline, The dull season of late sum
mer was described as beginning
earlier and lasting longer" The
manufacturers, however, anticipate
heavy fall business, but this is not
expected by business experts to IN
crease the level of prices in these
lines.
Large stocks of leather and hides
which had accumulated. the board
asserted, coupled with a falling off
in consumption demand for leather
products resulting directly from the
very high retail prices which are be-
ing charged are currently regarded
as primarily responsible for the drop
in leather prices
The break in the silk market and
the subsequent falling off of retail
prices of that textile was attributed
to speculative activity in japan
where heavy losses have been sus-
tanned by dealers as a result of the I
refusal of the Americans to buv At |
exorbitant prices. Financial dSffi-
culties which developed in Japan last
spring also are showing effects and
are aiding in forcing a price reduct-1
ion on silk.
Lower prices on cotton and cotton
products were forecast because of
an expected heavy crop combined
with a slowing up of demand. The
mills were said to be approaching
completion of orders already in their
hands. Few new orders are being
placed. partly because of the late
ness of the season and because lob
bers and retailers confidently hope
for prevailing lower level of prices
when sales on cotton goods reopenl
next spring.
In addition the board foresees a
higher efficiency by labor in indus
trial production and improved trans
portation service. This combination
Is believed to mean that depleted
stocks would be restored to normal
in the near future.
ut remains true" the board said
that there is at the present time a
wide gap between the new level of
Jaw material values and the prevail
ing level of retail prices. During the
month of August it has been pointed
nut by the industrial leaders that the
high price of good. has been due onlv
n part to high costs of materials
md has in very large degree been
he outcome Of high capital charges
md very great advances in the wages
# labor
For these reasons consumers have
been discouraged from taking the
rev that shrinkage in retail values
vas Immediately to be expected as
result Of reductions in the whole
ale field. It is true. however. that
he savings afforded by manufac-
urers through lessened cost Of ma +
erials and increased efficiency Of
abor must eventually be reflected
b downward movement Of retail
rices.
For the coming autumn and win
ar seasons it is likely, However, that
his downward movement will be
vident in comparatively small de-
rees. In many lines higher retail
rices are predicted. due to the fact
rat purchases for the autumn and
inter trade had already been con
acted for at the old level Of prices
lie changes in the prices of materials
ba tsvao