The Birmingham age-herald., 1921-02-07
By THEODORE H. PRICE. CEditor Commerce and FinanccD
(Copyright, Theodore H. Price Publish
 ing Corporation.J

4 during the depression last autumn h@ made them abnormally sensitive to uh- favorable barometric indications. An \ alysis of the money situation, however' and opinions of banking leaders with whom I have talked both convince me that the stringency is largely local and temporary and that we shall soon pa~s through it. The factors contributing to | it include the usual heavy demand for funds to meet the February l dividend | and interest payments and the credit needs incident to the absorption of the unusual amount of new bond and note issues which have been made during the past fortnight. Last week such is- sues reached a total of nearly $100,000,- 900; the previous week they amounted to $150 000,0 900, and for all January to- tailed $2sO, O,000,000, the largest of any month since last spring. The chief is- sues of last week follow:
 Atlantic Refining Co. s15, 900, 900 Danish consolidated munich
 pal loan .................- 15,O0o,Uoo American Can Go. - F, 900, 900 Ohio Power Co. ............. lO,0uo,ouo Oklahoma Gas and Flee. Co.,. 6,0O0,0o0 Beaver Board Co. .......... 5,000,000 Southern Cal. Edison Con-. 5,0Oo.000 State of Washington ........ 5.000,0O0 ISSUES ARE POPULAR .@ These issues were quickly sold, but Q considerable amount of credit was nevertheless needed to float them. With dividend requirements they account for the fact that week ago the New York federal reserve bank had become bor- rower from other federal reserve banks to the extent of $50,000,000. At the same time western banks have been withdrawing funds from the New York market and repaying loans to the re- serve banks, as the steady rise in the reserve ratio of the entire system has shown. The flow of funds to the west is not usual at this time of the year, nor is it likely to continue long, and observers generally uxpress the opin- ion that when the present readjust- ments are completed the tendncy of the money market is likely to be progress sively easier
 Though in itself partially responsi- ble for the tight money, the eventual effect of the flood of new security is- sues will be to give a sharp stimulus to the growth of productive activity which is slowly gathering way. Their purpose is to provide working capital for corpora tions, to enabh them to in- crease their operating schedules; to furnish funds for municipalities to con- struct highways and school building ngs; to supply foreign nations and cities with credit here which will enable them to buy our products. They represent
 
 American people in productive ca 'Sbacity, and are therefore among the most encouraging harbingers of pros perty that the week has to offer.
 Reports of increases in manufactur- ing come in steadily. Since January l more than 100 southern cotton mills have resumed operations, following period of partial or complete dleness. number of mills are letting contracts for extension of plants and installation of new machinery Tke New England textile centers report moderate in- creases in output About l5.000 men have been re-employed by the Ford Motor company and other automobile manufacturers are adding to their working forces. Steel mill operations have improved slightly, though there is some doubt whether the amount of orr ders on the books will enable them to maintain the increased schedule very long. Wage reductions are still being made in industries which have Jagged behind, including the iron mining con- panies of the Minnesota ranges, and workers are generally accepting them without complaint while labor effi- ciency is increasing nearly everywhere.
 In the wholesale markets the number of buyers continues encouragingly large, although they are not purchas- ing in as great quantities as they were three weeks ago.. The figures of the federal reserve board for retail trade during December reveal a decrease of 21.S4 per cent in stocks during the month and an increase of PAS per cent in sales over the same month in 1919. pThese figures are measured in dollars Considering the decline in prices. the gain becomes more astonishing and in- dicates clearly how unfounded were many of the pessimistic statements of conditions made by business men last autumn and how completely the out come has failed to bear out their calam- itous predictions.
 For January retail trade no inclusive figures are yet available but the lead- ing department store managers of New York state that their sales have gone well and one owner announces that his business for the month was IS per cent greater, in dollars, than in 1920.
 The Chicago mail order houses, sup plying the middle western farming areas, have another story to tell, for the decrease in the purchasing power of the farmers caused by the continued weakness of grain prices is reflected in a AZ per cent drop in Sears -Roebuck's and 34.5 per cent decline in Montgom- cry, Ward & Co.'S net sales for Jan- uary, 1921, as compared with January, 1920. In many of the articles which these concerns sell, however, prices last month were 20 to- 30 per cent below a year ago. Compared with January. 1919, Sears Roebuck's sales show a decline of only 20 per cent in value, difference represented almost wholly by declines in prices. which, according to Duns and Bradstreet's index numbers, were f l2 to B per cent lower on 'Janaarys l ' this year.
 Bank clearings last week showed a decline of 15.6 perd cent from the same week last year, and failures were 314. against 42s the week before, and 10O,- ll4 and 235 in previous years.
 Clearing our minds of the confusion caused by measuring goods in terms of prices, it seems evident that a larger volume of commodities is changing