Norwich bulletin., 1920-07-31
BUSINESS CONDITIONS IN NEW ENGLAND DISTRICT

That transportation difficulties con stitute one of the most important factors in the present credit and industrial sit uation in New England, is becoming more and more clear, writes Chairman F. H. Curtiss of the federal reserve bank of Boston in the monthly review of con ditions in the district. It is generally believed and conceded that speculation in commodities, which was unquestion- ably one of the prime factors in the rapid rise of prices during the past year. has been to very large degree eliminated from the channels of trade :; that the public is recovering from the disease of extravagant buying which afflicted it so acutely a year; that labor conditions. prompting it to more req is becoming more sensible of changing sonable spirit of cooperation in its at titude toward employers and the public i; and perhaps most important of all, that no legitimate, well-established business has suffered from lack of adequate banking accommodation as result of a more discriminating use of credit and the influence of high discount rates The pressure for loans upon member banks in this district has reeeded somewhat during the past few weeks, leaving bank reserves in a more satisfactory condi- tion to meet the demands of the crop moving season. : But while there need be no fear. that production will not speed up again au- tomatically the moment that the econ omic law of supply and demand gives the signal. production which cannot be marketed when needed will not solve the problems either Of tie retail dealer or the consumer It is the wheels of l transportation therefore. which now need acceieration and it is the transpor- tation problem which must be attack 1 ed more vigorously and earnestly than any other; and although this is appar- | ent the country over, the evidence Of merchants and manufacturers in this 1 territory indicates how acute the prob l lem is in New England, which produces no coal whatever and so few Of the raw materials upon which it's great indus i tries and the economic life Of its people are principally dependent.
 The great amount of commercial building and reconstruction work in progress throughout the country has made for continuing prosperity in Con necticut and Massachusetts industries | manufacturing builders hardware and i tools but transportation difficulties which have interfered with the placing | of goods with the retail trade have se- l riously embarrassed the latter as we'll as dealers in building materials gener~ ally, and the result is that men with courage to embark in building enter prises in the presence of existing high costs find themselves confronted with a shortage of supplies. not on account of | lack of production but because of ina bility to obtain materials which are ac- cumulating at factories and on railroad l sidings; and dealers whose energy, time and thought should be devoted to the in- l ternal problems of their own business must exhaust themselves in trying to se- l cure permits for cars, struggling to have embargoes lifted, and explaining l the situation to customers There are probably millions of dollars worth of l lumber awaiting shipment to New Eng 1 land points tied up either at the mills or in transit. Experts in this trade, in view of the fa-1' that there is supposed | to be a shortage of a million dwellings l alone in the country to say nothing of
 other buildings, together with grad 1 ually lessening supply of lumber, which l is also becoming more and more inac- { cessible, cannot see lowered building costs ahead: yet there are those who | feel that with enormous quantities of building supplies increasing at the
 sources of supply where there has as yet been no slowing down in produc- ton, certain amount of liquidation must come when and as soon as the rail
 road situation eases and that inNeased
 rates will not altogether offset the ten
 dency of prices to drop, at least tenn
 porarily, unGNr these conditions.
 1 Liquidvtion of consumable commodi-
 tias in ways pleasing to the ultimate
 user, which has been so marked during
 the past two months, continues, but as
 midsummer passes shows signs of short
 ly running it's course. In the textile
 and shoe and leather centres, factorie:
 have been altogether closed down ol
 running on short time with thousands O
 operatives out of employment, or living
 on reduced earnings even if at higher
 wage rates; purchasing power in these
 communities is therefore beginning tt
 show sigEs of diminishing though n'
 serious inroads have yet apparent.
 been made on savings deposits nor ar
 Liberty bonds being generally sacrifice
 by small holders and an interesting psy
 chologicaI corollary of this situation
 that certain amount of increasing ef
 ficiency on the part of workers sti
 kept employed and anxious so to remain
 has been noted, causing some manufac
 turersr to be more optimistic with re
 spect to being able to develop more satis
 factory work conditions for the future
 In other industrial centers not specihcall
 affected by cancellations resulting as ye
 in a slowing down of production, tn
 public is still spending freely in the sat
 isfaction of it's wants but it's tastes ar
 not along as extravagant lines as a yea
 ago and demand is gradually bein