The Washington times., 1920-09-01
BRIGHT PROSPECTS
tlOOM|NG UP AHEAD
AZ Transition Period PasJss
Federal Reserve Board Sees
Fine Business Conditions.

The transition period OF business 10
.nearing a halt" and general improve
msnt 10 noted in the general economic
situation. the Federal Reserve Bosrd
announced today. But the board. In
its monthly npsnciaI review. suggests
that there is stiil much to be done
before business, prices and Industry
can be regarded as having settles
down TO a stable basis.
The board, studying reports from
reserve bank csnters, concludes that
'.mors favorable financial conditions
are In sight" and that merchants and
manufacturers, while drawing heavily
upon the resources OF the banks. are
doing so primarily for productive
purposes and not for speculative or
non productive objects.
Dullness Of business. accompanied
by unusual reaction and hesitation
on the part OF middler/n and deal
ers. is a significant feature stressed
by reserve bank agents in msnufac-
turing districts
"This Is the result OF reaction among
consumers" the board said. '"who have
OF some tendency to under payment
in various directions, due to the let
ting down OF demand,
"In the Agricultural regions the
promising crop prospects have given .
much more hopeful turn to affairs
and have tended to minimize the
broader questions OF price adjustment
money rates and Industrial unrest
In those parts OF the country, the
paramount idea 10 production upon
larger scale, accompanied by improve
ment in transportation and better
labor conditions"
1t is the Arm view OF the board
Fundamental conditions of business
are slowly but surely improving.
Practically all reports are in accord
upon the idea that the business struc-
ture of the nation is sound
Steady reduction in retail prices on
q number of staple lines of goods
continues in evidence. with some lines
showing more rapid declines than
others. This recession is expected
to continue. although the drop in
prices may be slight on some classes
of goods From many centers ieTorts
showed that price reductions have
led to a revival OF buying activ.ty o,
the part OF retailers, this buying
In the South and Southwest.
On the whole, the volume OF sales
In the retail trade continues mod.r-
ately large. In all districts sales n
terms of money exceed those for the
same period las. year. it was stated.
The sales OF essential commodities.
in terms of physical amounts, are
fully as great in many districts, ana
in some districts actually exceed last
years record.
The public is buying less OF lux
uries and serni-luxuries. the board
said. This tendency by the public to
confine its purchase to more neces-
sary articles is pronounced in all
districts.
Downward tendencies in wholesale
prices are noted for groceries. dry
goods, and shoes. but no evidence OF
weakening Is found in the wholesale
hardware and furniture lines. Mer-
chants generally are observing an at
titude Of caution, apparently waiting
for prices to reach position Of
greater stability.
In finance general scarcity Of funds
and continued interest and discount
rates featured the past thirty-day
period. The reserve position OF the
Federal reserve banks were said to
have been well maintained The
boards agents note a general desire
on the part of the people to conserve
their funds to avoid borrowing at
high rates from banks.