The Chattanooga news. [volume] (Chattanooga, Tenn.) 1891-1939, 1920-12-10
Price Declines
NOWAre Hating
! Indications of Sterilization
of Conditions in Many
Markets.

The general price situation showed an
improving tendency In some respects
last week, There were some large cuts
in quotations OF Independent steel max
ers. and the general levd Of quotations
has now settled down to about the basis
maintained for nearly two years by the
United States Steel corporation, says
The Kansas city Star; Prices Of ee.
experienced the worst week In years,
with severe reductions in prices and
enormous loses to stockmen who mar
keted their cattle, but the hog market
and closed a little higher than a week
ago.
In the grain markets a distinct up
ward movement developed. Wheat raj
vanced 4 to 10 cents Minor cereal
prices improved. In the cotton market,
also, there was a substantial rally.
though II was not fully maintained.
Retail Prices Fall Slowly.
Apparently little progress was made
In extending to the consumer the bene-
ut OF the great declines that have oc.
cured In the raw material markets.
Retail dealers generally are still en-
deavorinE to save themselves from
losses on the disposition Of goods
bought before the great declines; In
lhe case OF foods, that move quickly to
the consumer, there is still a dispro-
portionately wide margin between the
price the producer receives and what
The consumer pays. Retail meat prices
generally have not come down proper
iionately to the decline in livestock and
lhe prices of bread has not followed the
downward course of the price Of wheat.
Readjustments to normal handling
Hargins are necessarily slow to come,
Out a general sterilization Of business
on new basis cannot be established
until these handling margins are read
justed. Service, like commodities adj
vanced unduly during and after the
war, and, like commodities, 1t must un-
dergo a process Of reimbursement and
Eeflation.
Paradoxes In Price Declines.
Curious anomalies exist in nearly all
the markets, making 1t difficult to ac-
count for recent price movements In
the wheat market for example, there
has been a decline OF more than
dollar a bushel in three months. and
the current market comment in that
period attributed the decline to poor
IN export demand and to Canadian wheat
under selling this country's crop; yet
the actual exports of wheat In the four
months ending with October were &C.,
100000 bushels larger this year than
last, out of a crop and carry over 100
100000 bushels less this year than last.
Similarly, In the cotton market, where
present prices are less s., than han half the
the statement has frequently been made
that the poverty OF Europe, and the low
rate Of exchange have restricted foreign
oefobe1 7ss e baes W were S 6
cent. larger than in the same month
last year.
1t has been declared repeatedly that
restriction Of credits has forced the
marketing Of farm products and that
this is a factor in the great slump In
prices; but the rediscounts OF the fed
eral reserve banks on commercial paper
are more than billion dollars larger
a fCf1 ding
eral reserve notes are ATS billion dol
lars more than year ago; and the
aggregate Of loans and discounts OF ma
tional banks on commodities probably |
Is l 1-2 billion dollars greater than
year ago, with possibly an equal ex-
pansion in loans of state banks and
trust companies.
Sc, Wien one seeks to compare sta
tistics. the reasons given for the great
slump in commodity prices are not con-
vincing; and 1t is necessary to fall
back on n changed attitude Of mind;
a widespread and growing realization
high: that they could not stay up; that
soon or late u moderate slump must
come and that part Of wisdom was to
Anticipate Thi and prepare Tor IT l,. :. wb.,
has unset the markets in the past Few
months. IT seems plain that the re-
action from high prices will go too far
and he followed by a rebound. There
pened in some instances. II Is difficult
to forecast the duration OF the present
unsettled state OF business: but II is
certain that the wealth. productive
capacity and consuming power OF the
United STATES II so great that the pres
ent arrangement NJ trade IL only tenn
porarv. and before long relative ana
actual prices will become stabilized m
a basis that will produce normal gen.
eraI profits for industry and trade.
Flrmer Tone In Stocks.
In the New York stock market there
was hroadcned trade last week. with
in the market though nrice move
ments were tr"epuIar and the AVERAGE
level of quotations Yesterday showed
small ret rains--nh0nt n roint--tn In
dns'riala and a slight decline In rail-
road stocke
The course ~ the stock market IN the
newt few wceta. according tn report =
from WAN straet 's lively To be af-
fected nv the .rovm"rts OF the fourth
instaln,ent ~ income and excess
nrofts tavcs due noe II Recent de-
cIfnee in rr'ces NJ securities and COM
rnodities win make ~ unu~ua|'v dthi- |
cult for manv concerns N mnke these !
navrNnts ard thern IL Hlee'V 70 he a
rood SeaI Of horrowirr from the banks
To get the nccnssarv funds While the
taxes rcnresent nr0fte and incorna made |
in 1919 this monev Is st''l nart Of the
WORKING oanital of husiress. and tho
losses incurred nv tho recArt fan in
prices make 1iA7cuIt situation for
many CORPORATIONS and individuals. |
Therefore a ner'od NJ rather acute |
rnonev e+rir~onov soArns HISe1v
tr,n~oved Rankin Po9N'on.
New YORK clearing house hanks last |
week able to ndd 10 their rerervns
and showed Sn~n'us NJ ~" nno Uon
vestorat V. con'nnred with aoNc't of
government withdrawals from the
banks