The Washington herald., 1920-07-05
TRADE REVIEW
AND OUTLOOK
Activities Reach Hallway
Mark With Opposite
Conditions Prevailing.
AFTERMATH OF WAR
Seasonal Restraints Partly
Responsible for Present
Lull in Activities.
AFTERMATH OF WAR

A year that opened with active
business and advancing prices
reached the halfway mark with op-
posite conditions prevailing, and
with more general recognition OF the
fact that economic readjustment is
in progress. The change has not
come suddenly. but for some time
past has been gradually developing.
and IL has long been anticipated la
some quarters as an inevitable after
math of the great boom of the
war period. Prices that had risen,
on the average, nearly 12o per cent
above the 1914 basis obviously could
not be maintained indefinitely once
the propelling forces behind the up
Nturn had been modified or eliminat-
ed. and competitive bidding for sup
plies replaced by competition in
selling, and the existing situation,
IL partly due to transportation diff
hculties and other special causes,
primarily reflects the operation of
natural elements. Allowance for
seasonal restraints would explain
some of the present lull in activities.
but would not account for buyers
continued caution in making distant
many sellers to reduce accumulated
stocks of merchandise. or for the
yielding of prices that is spreading
to various basic lines. IT is the price
question. more than any other sim
gle influence. that now dominates
business movements, and the fact
that the rising trend of most mar
kets has been halted, and that a
number of essential commodities
have declined appreciably from pre-
vtous extreme levels. cannot be re-
Carded as other than favorable in
its bearing on the future.
How far the price reaction will
carry, and to what extent it will
affect different trades and indus
tries. is not clear at the moment;
but it is evident that consumers
opposition to high prices has in
creased. rather than lessened, and
that the development of forward
business largely waits upon addi-
tional downward revisions.
Significant Changes In Business
Mortality.
Under pressure of credit restric-
tions and diminished consumption
of commodities. among other ele-
ments. the weak spots in the busi-
ness situation arc being brought to
the surface. This fact is made clear
by the half years insolvency record,
but more particularly so by the June
statement. which discloses more
failures I'm the United States than
in any month in a year and a half,
and the largest liabilities of all
months since April. 1915. The June
defaults. numbering 674. involved
about s33.0O0.00O. or the heaviest
amount for the period back to 1915.
and this swelled tho half-yearly in
debtedness to fully ss6,700.0 900. Com
pairing with the s6S.70O.000 of the
first six months of 1919. an increase
of IS per cent appears. whereas the
1852 failures of the half year just
ended are So per cent under the
34s3 reverses of 1919. The expla-
nation of the sharp rise in the June
liabilities without which the half
yearly exhibit would have been
more favorable. is found in the un-
usual number of large insolvencies.
steel Trade Hnndicnps Continue.
still another week has passed
without bringing decisive relief
from the handicaps which confront
the iron and steel Industry. The ex-
isting drawbacks are mainly those
of congestion i'm transportation. but
the weeks touch of hot weather has
been a reminder that inability to
obtain cars is not the only retarding
factor to be reckoned with. While
operations at steel works remain at
fairly high rate. mill shipments at
various points are greatly impeded,
and piling up of product has reached
large proportions in some instances.
In the Chicago district, for example.
the accumulation is estimated at
10000 tons. With such conditions
prevailing. sharp curtailment Of
output must inevitably follow IL i'm
provement in transportation is not
soon forthcoming. and the threat Of
a strike among the shopmen of one
of the leading railroads adds to the
seriousness of the outlook. The
price trend, meanwhile. is upward.
advances of from 81 to 50 a ton be-
ing named this week on different
grades OF pig iron, while OPEN
hearth billets, Pittsburg, are up IS.
Rufh'. C....k