The Birmingham age-herald., 1921-05-09
By THEORDORE H. PRICE
 Editor, COmerce and Finance Copyright, Theodore H. Price Pub.

COfp.
 New York, May S.-(SpeciaL)-For the second week in succession the news has contained concrete constructive/develop ments pointing toward the removal or some of the spectres which still frighten business man, and the standard baro- metric trade indicators have continued their upward progress.
 : The time for the elimination of the fear some word liquidation from the busi- ness vocabulary seems to approach more rapidly each week. Liquidation of labor which necessity has pointed to over and over as the chief justification of pes- simistic outlook, has received strong impetus by the action of the Steel cor poration in reducing wages 70 per cent as of May 16. The immediate effect un- doubtedly will be to hasten similar re- auctions in other industries which have Jagged behind, and it has strengthened the belief, already discounted by the rise in railroad securities on the exchange, that deciison of the labor board allow ing similar cuts in railway wages VIII soon be announced. More than 75 per cent of the 1000 or 500,O00 employees of the short lines' have accepted cuts, ana the American Railway Express company, employing another 5000, proposes wage revision June l. which will have to be accepted by the employees or approved by the labor board.
 It becomes increasingly evident that lower freight rates will have to follow shortly after lower wages, and it would not be surprising if the interstate com merce commission and the labor board should make their respective announce ments almost simultaneously Big ship 1-x ftvnN ono h. ing guns in a campaign for readJustment of rates at a Washington conference May IS, and as railway officials them selves are generally expected to ac- uuiesce in reductions as soon as operating expenses are cut down, it is not too long a look ahead to say that prospects TOT the removal of another handicap to bust ness are distinctly encouraging. Car loadings are still on the upgrade
 THE OTHER BUGABOO
 As for that other bugaboo. liquidation of commodities, improved trade and firn1er prices in many lines and easing money rates, all give point to the encour- aging statement of Governor Harding or the federal reserve board that "The tune has come for renewed courage and con fidence. There is no advantage in fore ing liquidation further. Many men have liquidated down to the bone. They should
 
 We are reaching every day safer basis upon which to do business
 Eemphasizing the relaxed financial strain which brought for Governor Har- dins's statement, the New York federal reserve bank has reduced it's rate for re- discounts on commercial paper from to 6tA per cent and the Atlanta bank has ctt its rate to per cent. This surren- der to the inevitable is recognition of the casing tendency of open market rates and of the steadily increasing strength of the banks reserve positions. It fol- lows a reduction by the Boston bank fortnight ago to per cent on conner cial paper and it is to be expected that the Minneapolis and Chicago banks where the per cent rate IS stiii III sel- f:st. will shortly lower it.
 Although the gold holdings of the New York bank showed an increase ot nearay !, s11000,000, the reserve ratio for the week is unchanged at 55.5, due to a failure 70 effect further reductions in bills d's- counted, which is in itself favoraple sign as reflecting an increased use or commercial funds. The reserve ratio oi tho entire federal reserve system IS up to 55.3 from 55 a week ago, due prin- cinpally to the continuing golden 1000 which raised the gold reserve $2o,O00.ooO during the week.
 Still more gold is on the way, and de- spite the relief it brings to our own stringency. far-sighted bankers are be- pxinning to deplore the depletion of the reserves of our customers abroad. whc are ecraping bottom to pay their debts. The growth in our financial resources ct their expense makes it imperative that ws give it back to them in the form ol