The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1920-11-17
PRICES TREND
TO STABILITY
Signs Of Relief TO Credit Strin-
gsncy Seen by Federal Re-
serve Board.

Price reductions, and their bear
ing upon bank loans. both out
standing and those to be incurred,
was q subject Of major importance
In executive sessions of the advisory
council OF the Federal Reserve
Board, which concluded today with
optimistic vieys Of the business out
PRESENT PRICE TREND.
These financial leaders. discussing
Informally the present price trend,
very generally agreed In their reports
that the price situation Is apparently
attaining q relatively greater degree
OF stability than was In evidence dur
ing october.
The problems or readjustment are
far from settled, II was declared, but
there are definite signs that credit
stringencies are being gradually re-
lieved. through recognition by BUSH
ness leaders of basic factors that II
would not be well to ignore, while
the price recession Is under way.
The advisory council. 1t was said.
finds much in the present financial
Improvement to Justify the restrictive
credit measures adopted by the Fed
eral reserve'system. Reviewing bust
ness conditions throughout the Uni
ted States, financial leaders felt that
the question OF financial readjust-
ment now centers upon the placin OF
goods and accumulated stocks upon a
banking basis to correspond to the
newly established price level. The
bankers expect that the business sit
uation will progress to a more normal
status, as the older accommodations
Of business at the banks are disposed
Of, and new gooA ~ the revised
prices are substituted.
CREDIT STRAIN TO LESSEN.
Bankers, 1t was said. look for a
distinct lessening Of the credit strain
now In evidence in some centers
through this process Of substituting
new for old stocks. Business leaders,
1t was said. quickly sensing the value
Of such steps, are moving now toward
the end of clearing out old stocks.
iiquidating present obligations. and
preparing for new and bigger trade.
Further progress was noted by the
council in the process of converting
non-liquid credit secured by Govern
, ment obligations into liquid credit,
for productive uses. Another note
worthy development observed was
the diversion OF an immense bulk of
, funos from speculative channels to
essential lines. The members OF the
council estimated that more than ST.
900. 600. 900 has been taken out Of the
speculative market. and made avail.
able to producing and industrial en-
terprises.
BUSINESS MORE ACTIVE.
Shrinkage in the volume Of produce
tion In various lines, because Of the
price drops, was not considered as OF
a permanently hampering factor, as
manufactured products, and food
products as we'll, which were held
back for a time when the price cuts
were most pronounced. are now
moving into the markets more reg
ularly, officials declared. Despite
price recessions. business has been
fairly active. and in some centers
above the average, under the stimulus
of lower prices. Improved transport
tation everywhere, with no prospect
Of the rail stagnation OF last winter
was considered by the council as a
favorable development. tending to
aid business stability.
Crop producers threats to hold
products back from market were rid
iculed by these representative bank
ers. The futility OF such a plan, it
was said. now Is amply shown by
latest reports, indicating there is no
check on movement OF farm commo.