Pueblo chieftain., 1921-07-24
Normal Midsummer Dizziness
Prevents Many From See
ing Exact Conditions

The United States is practically thru
the period of violent business disturb !
ance which began in May. 1920 accord
ing to a discussion of current market
conditions by the National Bank of
Commerce in New York. We will from
time to time have visible evidences of
the distressing conditions thru which
the country has been passing. but these
occurrences should be regarded not as
induces TO forward conditions but as
relating TO the past. The changes which
have taken place have not as yet been
recognized by the business public for
two main reasons The period of nor
NAL midsummer dullness now at hand
has ohscured the certain evidences of
Improvement and there has been lack |
ing n thoro comprehension of credit |
conditions.
Failure to recognize the passing of
the period of insufficient credit has re-
suited from lack OF recognition of the
fact that for a long time the credit |
shortage has been apparent rather
than real and due in large part to the
unsatisfactory character of some of the
risks offered There is now no bank
credit available for operations designed
to hold prices at fictitious levels. ord
erly organized marketing. II fair, sue
ceeds. but attempts to hold prices
above the levels determined by inter
national supply and demand are certain
eventually to fail American business
cannot avoid their indirect effects. VAL
orizaton schemes providing for indie
finite holding for arbitrary prices of
such commodities as wool, silk. cof-
fee. sisal and sugar. IL successful. would
involve the purchase by American con-
sumers of raw materials at levels likely
- NVN,WR al , -,
these plans contemplate the mainten-
ance of an artificial price they cannot
be disreGarded in consideration of
credit risks
Some business have found difrculty
in getting what they have felt to be
a fair line of credit. This has been
because OF desire to operate on n
basis OF inventories of raw materials
and goods not yet written down or be- |
cause in these Instances heavy invest |
ments have been made In plant. and |
equipment at Inflated prices. In such |
cases they are not yet willing to admit |
that they VIII have to take their losses |
and adjust their operations to make |
prohts on real values bnly.
Altho occasional failure to secure |
desired credit accommodations has
served to keep alive the impre ssion |
that there IL a shortage OF bank credit, |
the truth is that there is now avail |
present business requires. Tho main |
requisite for a return toward normal !
conditions is the will TO try for bux- |
mesa on level where II can he had. |
The period of general liquidation of
the Law material markets of the Uni |
ted States has passed Recent declines |
are due TO conditions of supply and |
demand In specific lines. This ia a |
normal condition. Wholesale prices Of |
many classes of manufactures have
been fully Debated. This is not in all |
lines, but recent cuts in the price of
steel and widespread reductions in
wages Indicate that adjustment In |
wholesale prices Will not be long de-
lsyed. Retail prices show wide irreg-
ularities. and high cost stocks have
been largely dirposed of. Price sta
bilization is, therefore. not far ahead.
Money Rates
Steady betterment of the banking
position which has been in progress
during the current year gives fun as
surance against credit stringency when
crop-fnancinC requirements become
effective. The reserve ratio OF the
Federal reDerva banks now stands ut
SIS per cent against 49, per cent a
year ago. At this season last year.
the bill holdings of the reserve banks
exceeded 81, I6. 00o. e06. They now total
81, 100 100000. During the same period,
hined note and deposit liabilities have
increased moro than Is per cent. Loans
OF reporting mamher banks are far be-
low the level Of year ago The bank
ing system is in splendid position to
meet autumn requirements for credit
which will he much smaller in volume
than last year because of lower prices.
Conditions Abroad
Thruout the continent. except Rus
STA, conditions are steadily improving.
altho the disordered state of public
finances continues to be heavy handi-
cap TO industry. German competition
in the International market is favored
by the position OF the mark. but on the
other hand. continued imitation Of the
German currency after imitation has
practically ceased in other countries.
10 serving to maintain German produc- /
tion costs, including labor. while they
are declining elsewhere. While the
Russian situation imposes heavy