The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1920-12-31
The Past Financial Year
MENT OF WORLDWIDE DEPRESSION
DEVELOF W[IVI UTI HOT1D~WDE UEINEOOIUN
Fall in Commodity Prces-Iiquidaion in Securities De-
S. probation of Foreign Exchanges and Currency In
~. flation-Crises in Far East and South
!. America-Good Year for Crops

4. rebounding to $406A by April S,
and closing the year around $3.50. The
relative steadiness OF sterling during
the latter part Of the year, when
many had predicted that the seasonal
decline would pull it down sharply. is
explained partly by the easing of mon
have been much lower than ordinary
this year. and her trade balance dur
ing November was in an unusually
strong position for that reason.
| Continental exchanges have moved
most of the time with sterling and
have weakened in relation to it. The
drop in Central European exchanges
and the Russian ruble, frequently al
most to the vanishing point, has of
course been an outstanding feature of
the year.
Argentina maintained a premium
hero during a part of the year, and
during the first six months got $780,
COX, 900 of gold from u.s. She lost her
premium during June, however, and
had fallen to a discount of about 20
percent by the end of the year. Brazil
ian exchange, hard hit by the drop in
coffee, broke its long level alta 20 per-
cent discount during July, and by the
| end of the year was at a SO percent
discount.
| The Japanese yen, although below
par in the spring. went to premium
in May and held it till near the end of
the year. when it dropped again to
slight discount. Next to Argentina,
Japan got more gold from us than any
other country. The whole Far East
ern crisis has weakened their ex-
changes greatly despite the strong po-
sition earlier in the year, and they
have been making new lows along
with the unprecedented drop in silver.
The Indian rupee dropped from 45
cents early in the year to 25 cents
near its close, or to about 20 percent
below the pre-war price. The Shang-
hal tael, which moves directly with
silver, stood at around $1.60 at the be-
| ginning of year, but slumped off with
no significant recoveries to below rs
cents by the end of the year. Silver,
after making high of s1.37 per ounce
on Jan. IL, had dropped to the low of
the year at 59A cents by Dec. 10.
| Canadian exchange opened the year
at a z percent discount and has held
at discount all year. By June her
discount was 1914 percent, but during
| the remainder of summer and until
November it held remarkably steady
around a 8 percent discount.
! The sharp downward turn in Ca
madam exchange at the end of the
year to a discount of is percent is ex-
planned by the cutting off of her wheat
shipments, navigation having closed
on Dec. -.
co The return of the railroads to
private control on March l, following
the passage of the Transportation Act
| ENoH Yfcfo nd n
The Railroad Labor Board on July 20
awarded wage increases amounting to
over $6O0,000,00O per year, but the
Commerce Commission on July 81 al
| lowed rate advances which were COM
puted to enlarge railroad revenues by
81 500 100000. Thus the outlook was
more hopeful than in some time; but
optimism was tempered by the some
what disappointing net earnings under
the new rates and the prospective fall
ing off in traffic.
% The stock market showed vio-
lent breaks and widespread democrat
zation during January and February.
A revival of speculation was attempt
ed in March, during which many i'm
portant issues recovered quickly much
of what they had lost in the decline
that began in November, 1919. After
carly hO"CfCI ShoSho so'N
ground heavily, except for few specu-
lative flurres, and December marked
the lowest level of the year and
brought prices back to where they
were at the start of 1919. Rails en-
joyed fair recovery during the last
half of the year, but suffered with the
industrials at the very end.
tS) The trend of bond prices was
distinctly downward during the first
five months just as it had been during
all of 1919: it then held level until
near the end of summer, when it NOV
ed upward strongly. Apparently the
long depression in bond prices had
finally ended. A reaction set in dur
ing October, however, and before the
end of the year prices had lost good
share of all their early fall recovery.
Fourth Az Liberty bonds, for example,
despite their unquestioned security,
made their high at SO early in the year,
but then fell to 50 and closed the year
near the lower level.
(9) The Federal Reserve system be-
gan the year with its reserve ratio
standing at 1875 and closed the year
at 455s. These figures represented,