The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1921-05-23
BY THEODORE H. PRICE


York.
tCopyright, Theodore H. Price Pub
fishing Corp'n. 16 Exchange Place.
New York;
New York, May 22.-(Special)-It is
rFoftable to us all occasionally to look
back over the events of a month or so
ard see how their developments have in
some cases relieved our fears, though in
others they perhaps have disappointed
our expectations. A month ago the BUSH
ness world labored under two great I'M
certainties, both breeders. of fear. The
first was doubt as to the eventual out
come of the reparations negotiations
with all it's possibilities of continued Eu-
kopean unsettlement and impairment of
tading facilities and foreign purchasing
power. The second was misgivng as to
the possibility Of reducing production
costs to the point where the lower price
Jewel would yield at least working
margin Of profit.
Adjustments of these problems is still
far from complete, as has been pointed
out in these articles. But the policy to
be followed in their adjustment is no
longer matter of conjecture. Within
the month the governments Of Europe
have settled on a plan of payment of the
German indemnity which gives every
promise of working out successfully, ac-
celebrating European recovery and resto-
ration Of purchasing power, and event
ually vigorously stimulating our foreign
trade
Within the month. also, both the pri-
waite leaders of American industry and
the government authorities having juris-
diction over labor have accepted the
principle that wage reductions, with in=
creased efficiency in production, must
help bear the loss imposed by falling
prices. The wage cut announced fort
hight ago by the United States Steel
Corporation was put into effect last
week without trouble, and further reduc-
tons by independent steel makers are
impending. Still more important, the
railway labor board has announced that
a reduction in the wages of common
labor will be made public June 1, and
its acceptance of the principle is assur-
ance that the cut will be extended to
practically all the 100000 railway work
ers in the country. Following a general
cut, readjustment of freight rates, if
IOt a IldC percentage reQuCllOn, appears
to be inevitable as a result of the rap
idly mounting pressure for lower trans
portation charges.
LABOR TO FIGHT
The leaders of railway labor, as might
have been expected are endeavoring to
influence the amount of the coming cut
by thHats to resist it and even to take
it to court, which may be considered
empty, because the board is itself
ri xxitI, ,1a ia I,
duction. Efforts of labor to resist wage
adjustments in other lines are not meet
ing with marked success Strikes in the
building trades are still dragging along,
but the shipping strike gives evidence of
disntegrating. Up to date four-fifths
oe the scheduled sailings had been car
ried out and the strikers leaders have
expressed their belief that the end is
in sight, and that the 10 per cent cut
OF which Admiral Benson is insisting
will be accepted. Government employ
nlent figures TOR IA industries for April
show that while in every case the total
pay roll was less than in April, 1920 in
half the industries it was larger than
in March Of this year, despite the fact
that wage cuts were made in several of
them.
Within the month, too, the improve
ment in the financial situation has pro-
ceeded to degree scarcely expected.
The establishment of settled policies re-
gardlng the two main problems outlined
above has brought new confidence into
the securities markets, which have adj
vanced notably. They hold their gains,
despite technical reactions, notwithstand-
ing the fact that several more dividend
omissions and reductions have been an
nounced
The strengthening of the banking posi-
tion during the period has been even
more marked. Its full significance will
De appreciated when the demand for ag-
ricultural and commercial credit reaches
It's peak late in the summer, for the
fear OF serious difficulty in financing
bumper new crops on top of insufficient
liquidation of the old was ever present
among bankers until the easing tendency
fthe money market became defined
inc credit needs OF farmers are likely to
pc better cared for as result of the
inspection Governor Harding of the fed
erai reserve board is making of agricul-
tural conditions. and Secretary, of the
Treasury Mellon, member of the board,
has expressed himself in favor of more
liberal rural credits and extension of the
present SIX months rediscouRt limit by
federal reserve banks on agricultural
paper to nine months, and on live stock
paper to as high as two years. Reduc-
tons of rediscount rates. he says, is in
itself not sufficient to afford farmers
the credit facilities they require.
The federal reserve systems ratio OF
0Aso 90 ltah rt Il aIn Af hIfcsi