Norwich bulletin., 1920-05-29

In discussing high prices in relation to the consumer, at the hfty-third meet
 ing of the Economic club of New York,
 Thursday at the Hotel Astor, New York city, Francis H. Sission, vice president of
 the Guaranty Trust Company of New
 York, said in part as follows:
 "A wave of priee-cutting is sweeping
 over the country. It is the most inter-
 esting economic phenomenon of the day
 -an event long heralded and waited for
 byt the public. And yet. curiously enough,
 the public is only tardily awakenini1 to realization of the fact that it is not only the beneficiary but also the creator of. the movement. Merchants generally frankly explain that they are reducing the prices of certain commodities. be-
 cause the public is refusing to buy at
 high prices. In brief, the movement H
 largely psychological, rather than econ omic in character.
 And it will. be we'll to bear that l q tinction in mind in endeavoring to ana lyze and foresee the trend of commodity
 prices The reductions in prices that are being made today are not due to over production; for there is. in. faSt under production in many essent'S HAS which 1 is likely to continue for some time. Con- | sequently, it would seem advisable to avoid hasty conclusion that the pres
 ent movement forecasts a universal and
 drastic drop in commodity prices It | may be, and very probably is, merely | an oscillation of the economic pendulum 1 as it begins to swing from the height it l reached during and as result Of the war, although it seems certain that we have definitely passed the peak of high 1 prices.
 Our problem is not force of price re- l sessions as rapidly and as precipita tely I | a gradual readjustment with a view to l stabilization. There is quite as much l danger from too accelerated and extreme l price reduction as there is from too high 1 prices and all their attendant evils Above all, we should remember that a permanent lower price level can be ob- tained only as the resultant of many forces, some of which seemingly are un- 1 related but all, nevertheless. Working 1 directly or indirectly, toward a common l objective, namely, general economic re adjustment
 i '"The present recession in prices i!
 concentrating the attention of both tn, producers and the consumers upon tht ) probable effects upon themselves of sucl l, ? decline. The uature of the effect which may be fel5 will depend upon tn ] distribution of the declines throughou the whole range of commodities as wei
 IS upon the extent and the rapidity wit !, which the declines are brought about Our price level has attained it's un precedented height as a consrquence O 7 worldwide scarcity of goods and of eS
 traordin&ry extravaganza on the part 0 ! The American buying public.
 } Production under conditions of gen ) era1 shortage moves up uneyenly an 7 overtakes the demand, now in this li1t r now in that It is nat t.'ral that hig : priced goods, luYures in particular
 should soonest shoE a definite down f ward turn of prices. This is what W $ are apparently witnessing at presen t Furs and silk. for example. have re : gently declined to co.r . rably lowe ? levels The slgnlp in ra" silk prices V New York chiefly in consequence of til V big drop in Japanese prices, was preceG s ed by some months of gradual weaker : ing. Clothing and shoes are other e1 t aInpIes of goods for which there is n weakening demand at prevailing price
 an expression of the growing impatienc s with high living costs, The extraordir e ary demands of foro'~-' markets, lik - those at home. ar. 2lzen piece-mea n in accordance with varying fortune : of foreign producers in the resumptio s of normal activit'r- which means that u
 | export pr;cos will bn variously affecte, : "The tiGhteaipg of the purse strins I in the matter of credit and the accon , panying discrimination in some Iaeasul = between essential and non-essential line