Norwich bulletin., 1920-03-01
Early Ending of
 General Expansion
Forecasted in a Statement Is- sued by the Federal Reserve Board.

Washington, Feb. 29.-Early end ing of the general expansion which has characterized war and immediate postwar prices were forecasted in a statement summarizing February business conditions issued tonight by the federal reserve board The up- ward movement of prices so far as the board could ascertain generally had not met with any check.
 Financial and bank and authorities everywhere were asserted to be look ing more seriously at the general sit uation in credit and beginning to urge the adoption of conservative policies. While the review asserted that this could not be accepted as meaning that the "orgy of speculation had been absolutely checked, there was said to be the indisputable evidence that banks were exercising a greater degree of discrimination and judg- ment in complying with the demands of their customers.
 Throughout practically all of the reports of the federal reserve agents, J the statement said, there runs plainly recognition of the existence of an overstrained condition of credit and of some continued tendency to- ward speculative operations. High living costs and the upward move
 ment of prices have apparently not been checked although there is a de crease in prices in certain lines and a tendency toward restricted trade ir others. Interest rates are rising ir | most districts while banks are exer-
 cising a greater degree of discrimi- | nation and judgment in meeting th4 | demands of their customers
 l The increase in interest rates ha. l had the effect of lowering security | quotations, the board found, as ever l the best investment securities hay, l suffered in this respect. It also hai had the effect of forcing shrinkag' Tor contraction in the volume of trad I ing in all classes of securities, tht magnitude of which was regarded al l alarming by the board several month
 ago. In some federal reserve district l there were indications of a reduction | in the volume of speculation in com 1 modities.
 "The effects of the increase in dis i count rates" the statement contin 1 ued, made themselves evident in more conservative attitude on tn | part of member banks with respect t industrial expansion and in the cut ting of commitments on speculativ account.
 "Contraction of bank credit wa not, however, exactly general
 throughout the country, but the re 1 duction reported in the New Tor
 district was partially offset by an in 1 crease elsewhere A decline in ban | deposits, both in the financial cen
 ters and elsewhere, has occurred, i part being due to the withdrawal c
 government fun6s Very great diffi culty in placing both commercial an
 conservative investment securities 1
 satisfactory quantities is reported b
 dealers"
 General prospects at the close c February were for an active an
 prosperous spring season in all line
 the statement said. Agricultur;
 prospects were said to be "reassur Il ing" and the curtailment in export
 due to the exchange situation, whil
 undoubtedly beginning to make itse felt, were believed by many of th banking authorities soon to be ( benefit to the consumer here rathe
 than injurious. It was pointed out d , so that there was a tendency to re
 sist the advance in prices and tha . greater care was being exercised purchasing. all of which were regard ed as favorable symptoms"
 General manufacturing was repor- ed very active all over the country Wholesale trade conditions wei | said to be prosperous almost through out the country. Tn reporting ind
 vidual lines the statement remarke : that the demand for good grades shoes, regardless of price. seems continue, and shoe price lists for u new season are higher than ever. Some improvement was noted ; general labor conditions. There W; . a ''unfavorable aspect" however. , tendency reported from various di. , tricts toward a restriction of outpu , Even in those cases, it was show the opinion was occasionally express l ed that the effect of the restrictiI
 policy is beginning to be understoc by those practicing it as injurir l them as much as any other closs. The most serious situation in u t labor field is that of farm workers 3 genuine scarcity is noted which, u t board feared might result in a redu, 5 tion in farm acreage. This was sa : to be particularly true of the soutl , west and some apprehension was fe as to the solution of the problem Y i that region with the spring Seas son (