New Britain herald., 1921-08-06
WEEKS. REVIEW AND
IMMEDIATE OUTLOOK
Henry CleWs, New York Financial
Expert, Gives His Opinions
Especial to The Herald
(SDeCial to The Herald

preparing to take advantage of it is
indicated in many ways. The up
ward movement in the price of
bonds, although slight, is significant.
Bond prices are, usually first in any
upward market, to improve, preced-
ing stocks in their recovery. AS for
the activity of trade, the index of
the Federal Reserve board shows
steady upward movement. Money is
clearly moving toward permanently
lower levels, even though these lower
levels may not be continuously main
tanned. AS is we'll known, railroad
traffic movements, as we'll as earn
ings, are beginning to show improve
ment; and this has become more
pronounced within recent weeks.
Retail trade, as evidenced by the re-
turns of department stores, has been
Unexpectedly well sustained and is in
better volume in most parts of the
year ago. In particular lines of trade,
the indications are encouraging.
This continues to be true in textiles
manufacturers of leather, and nearly
all lines which produce articles ready
for consumption. Even in iron and
steel some decided advances have
week.
The Crop Situation.
Financially speaking, the crop
outlook is proving satisfactory. Even
the unfavorable cotton prospect ar
nounced by the government on Mon
day last, is hopeful to those who are
already overloaded with cotton
carried over from last year, as is
= 1,n Of in, he
ing regions. Yield in most branches
of agriculture gives every promise of
being good and the money return
will be correspondingly favorable.
Thorough arrangements for financing
the crop have now been made. Re-
serve banks in the eastern and
northern districts are carrying nee
essary lines of paper for the, western
and southern reserve institutions. Al
this time last year, the growth of re-
discount accommodation furnished
occasion for some anxiety because of
the Iowness of the reserve ratio, but
this year ratios have grown and are
likely to increase still further, large
ly regardless of the volume Of cur
rent interbank accommodation This
means that. within reason, there is
accommodation with little or no
proba Utility that. Individual CONNER
cial banks will have to bear any
serious strain.
Foreign Trade Prospect Better
One factor in the situation which
has given the greatest anxiety for
some time past has been the foreign
trade outlook. The opening of new
credits for the shipment of staples to
Germany on "a large scale Indicates
the coming revival of Continental
business. Foreign demand for raw
materials and food stuffs is stronger.
How soon the shipment Of manufac-
tured goods will correspondingly re-
cover remains to be seen: but mean
while there is increasing evidence
that the conditions which have aeen
retarding the restoration Of: this
branch Of business will shortly be
corrected. The greatest obstacles are
still found in the South and Central
American countries, but even there
Improvement lis beginning to be OBJ
servable. ''
Close of Defation Period.
Many Indications support the be-
lief that the deflation period is. about
over. Reduction of interest rates at
Federal Reserve banks practically to
Feir ucrmal pre-wa. Level closes the
era of contraction of credits through
high interest rates. Continued i'm
portation CT gold on a large scale is
broadening the holdings of Reserve
banks ut n present rate of around
100000 per month. These large
receipts OF gold have been main
lined curing the past week. There
is disposition on the part CT the
banks generally to grant more lib
eral t,c is to all lines Of trade in
which sound demand can be rec
ognized. A technical falling of IN
the volume of bills discounted at Fed
eral Reserve banks is due in part to
| liquidation Of speculative paper col
| lateralled by Government s- bonds
which has taken some time to work
| out" The volume of actual COM
| mercial accommodation remains fully
as large as it has been in the recent
past, notwithstanding that with a
| lower price level less money is re-
qured to carry. given volume OF
| business. Although foreign exchange
continues erratic, this must be
ascribed in parge part to the fact that
unusual operations growing out OF
| German payments are still in progress
! present series of such payments con-
| tinuing up to the end of this month
| With de1ation at an end, and for
eign trade gradually resuming there
to, it should be possible to restore g
much better adjustment in exchange
at an early date.
Market Review and Outlook.
Bonds are in good demand AS ha!
| been the case for two weeks O.
more, railroad stocks continue to b.
most in favor, for the reason tina
their position is believed to b.
sounder than that of the industrials
Moreover, as often before noted, thu
supply of railroad shares is Away
limited, owing to the fact that thel,
| has been no great increase in capita
issues for a long time, whereas man
Of the industrials are as yet com
| paratively new and have not beel