The Birmingham age-herald., 1921-06-06
Business Disappointed That Profits Are Not Returning as
 Large and Fast as Expected
Present Feeling Due to Exaggerated Idea of What Is Normal Than to Any Real Abnormality in Pres ent Conditions-Also Slump in Rail-
 road Gross Earnings

is rather less than was expected if IS to be hoped that with lower prices TOT coal and supplies the managers will shortly ind 1t practicable to reduce rates to point that will increa se their traffic and their gross revenue. so benehting the whole country as we'll as the transportation industry.
 Tn most of the wholesale markets in which fluctuations are officially re- ported higher prices are recorded l wheat has had sensational advance on an increased export demand made more urgent by an asserted impairment Tn the condition of the crop Corn anG the other cereals are higher in sympathy.
 The cotton market has been frmer, as through reiteration estimates of q 30 per cent reduction in acreage are com ing to be accepted, and it is made ap- parent that the existing surplus can be financed into next season. The gov ernment condition of 66 was about as expected and proved to have been dis counted Rice, another important southern product which was for a time almost unstable. is again in demand at slight advance. Coffee is likewise higher.
 The dry goods market is also in much better shape, and buying has been slightly accelerated by the fear that strike amongst the operatives Tn some southern mills may curtail pro- duction. The wooden mills of the country are said to be working at, nearly their normal capacity, though definite information upon the subject IS hard to obtain. The strike in the New York garment trade has beeh set tied by an agreement under which the workers guarantee an increase of 30 per cent in production and accept 8 reduction of Is per cent in wages. This amounts to 45. per cent cut in labor costs and is an arrangement which might well be initiated elsewhere
 Strike Still On
 The strike amongst the marine workers is still on The negotiations for it's adjustment have been badly managed. but the regular liners have generally been able to sail as adver- tised. Mir Teagle, president of the Standard Oil company of New York has declined the chairmanship of the shipping board. To get the right man for the job sems difficult. There is more or less price cutting in the auto 1 mobile trade. 1t is reflected in a de- cline in crude rubber to the lowest prices thus far touched. The shares of some automobile companies have also declined on the New York stock exchange, but the market there has been otherwise steady though dull. A few more industrial companies have passed or suspended dividends, but their securities have not declined much, although the bears have not missed any opportunity to use their | hammers. Railway stocks and bonds are noticeably firm as car loadings in- crease and the number of idle cars is reduced. Liberty bonds, especially the Sks. have declined because the federal reserve board has decreed that they may no longer be accepted as collateral at their par value and that their mar ket prices must hereafter be the basis upon which they are pat in loans.
 The ruling has excited no little indig- nation and people are asking why if they were acceptable at par when the | reserve ratio was much lower they I should now be diScredited when the need for deflation has passed. It is ar gued that the action taken favors the capitalistic class at the expense of the relatively poor patriots who bought the bonds at par until it hurt" and the popularity of the federal reserve sys- tenn has not been increased by the course it has pursued in the matter or | its persistent refusal to countenance a l reduction in interest rates In the let | ters that have come to me widespread dissatisfaction with what some de- scribe as the usurious policy of the fed eral reserve ranks Is expressed and the thing most to be feared. in my judg I ment, is that the history of Andrew Jackson's time may repeat itself and that the feeling against the federal re- serve system may crystalline in a movement that will seriously impair l the usefulness of what properly admin istered promises to be the most useful financial agency ever devised. The re- serve ratio at the close of business last Wednesday shows but little change, be- ing s7.4 as compared with 57.6 a week previously. w
 GOLD SUPPLY
 A gain of sl6.000 900 in the total gold supply has been offset by the credit ex- pansion and increase in circulation in- directly due to the accumulation in New York.of the $S5.o00,000 paid here on ac- count of the German reparation fund This sum has, it Is understood, been passed to the credit of the varioos al- lied governments at the federal reserve bank, but its mobilization involved more or less borrowing.
 The vagartous fluctuations fin the for eign exchange market are attributable chiefly to the dislocation caused by the German buying of. dollars in Europe, I which, of course, depressed foreign bills in New York The balance of the biis lion gold marks tequal to about $250.- 000.00 that was due to the allies has been paid in Paris in foreign drafts having gold value of about $215.00O. 000 from which 1t would appear that German balances abroad were larger N than generally supposed. Berlin cables Intimate that a general first mortgage on all the real property In Germany l will be offered as security Tor the I loans through which it Is hoped to pro- vide for subsequent reparation remit tances. Just who will take these loans l is not specified, but it Is at least clear that the German financters expect to scratch gravel in order to meet the slia- bilities their government has accepted
 Tn London the stock market Is more l cheerful and although the coal strike l is still unsettled and conditions in Ire land seem to/ be worse than better under date of May IS an English friend writes us as follows regarding condi- tions In his country; "A feature on this Iside is the apathy with which people