The Madison daily leader. [volume] (Madison, S.D.) 1890-current, 1920-03-02
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Il
Washington, d. c., March Ear
ly ending Of the general expansion
which has characterized war and i'm
mediate post war periods was fore
cast in statement summarizing Feb
ruary business conditions issued to-
night by the federal reserve board.
The upward movement of prices, so
far as the board could ascertain, gen.
orally had not met with any check.
Financial and banking authorities ev-
erywhere were asserted to be looking
more seriously at the general situa-
tion 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 indisputable evidence that
banks were exercising greater de-
gree of discrimination and judgment
in complying with the demands of
their customers"
Throughout practically all of the
reports of federal reserve agents." the
statement said, there runs plainly a
recognition of the existence of an
overstrained condition of credit and
of some continued tendency toward
speculative operations. High living
costs and the upward movement of
prices have apparently not been
checked, although there is decrease
in prices in certain lines and ten
dency toward restricted trade in 9TH
ers. Interest rates are raising in most
districts, while banks are exercising
greater degree of discrimination
and judgment in meeting the de-
mands of their customers.
The increase in interest rates has
had the effect of lowering security
quotations, the board found, as even
the best investment securities have
suffered in this respect. 1t also has
had the effect of forcing a shrinkage
or contraction in the volume of trad
ing in all classes of securities, the
magnitude of which was regarded as
alarming by the board several months
ago. In some federal reserve dis
lHclS WClS vi u iC-
duction in the volume of speculation
in commodities.
1.-THE effects of the increase in dis
count rates." the statement contin-
ued, "made themselves evident in a
more conservative attitude on the
part of member banks with respect
to industrial expansion and in the
cutting of commitments on specula-
tive account.
Contraction of the bank credit
was not, however, exactly general
throughout the country, but the re-
duction reported in the New York dis
trict was partially. offset by an in
crease elsewhere. A decline in bank
deposits, both in the financial centers
and elsewhere, has occurred, part
being, due to the withdrawal of gov
ernment funds. Very great difficulty
in placing both commercial and con-
servative investment securities in sat-
isfactory quantities is reported by
dealers"
General prospects at the close oil
February were for an active and pros
porous spring season in all lines. the
statement said. Agricultural pros
poets were said to be "reassuring"
and the curtailment in exports, due to
the exchange situation, was undoubt-
edly beginning to make itself felt and
was believed by many of the banking
authorities soon to be Of benefit to|
the consumer here rather than inju-
rious. 1t was pointed out also that
there was a tendency to resist the ad-
vance in prices and that greater care
was being regarded as favorable
symptoms"
General manufacturing was report
ed very active all over the country.
Wholesale trade conditions were
said to be prosperous almost through
out the country. In reporting. indi-
vidual lines the statement remarked
that the demand for good grades Of
shoes, regardless of price, seems to
continue, and the price lists for the
new season are higher than ever.
Some improvement was noted in
general labor conditions. There was
an "unfavorable aspect" however, a
tendency reported from various dis
tricts toward restriction of output.
Even In those cases. it wat shown.
the opinion was occasionally express
ed that the effect of the restrictive
policy is beginning to be understood
by those participating in 1t as injuring
them as much az any other class.
The most serious situation in the
labor field is that of farm workers.
A genuine scarcity is noted, which,
the board feared, might result in q
reduction in farm acreage. This was
said to be particularly true of the
southwest, and some apprehension
was felt as to the solution of the
problem In that region with the
spring season coming on in many
communities.