Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1921-01-21
Friday, January q. 1921.
Straws That Indicate the Wind


There are many signs. straws
showing which way the wind blows,
in the business situation which make
for optimism, They come from vari-
GUS quarters indicating somewhat
widespread confidence in the ap-
proach of improvement.
Tuesdays News Bureau says: 1.-THE
turn of the week brings an almost
sensational recovery in the basis in
dcx to the country's credit and busi-
ness position.-the combined reserve
ratio for the Federal reserve system
against notes and deposits. The gain
is partly seasonal. following the holi-
days and year-end adjustments; but
general trend is much more pro-
nounced than Usual, in carrying for
ward a recovery started near the end
Of last year, after the ratio had for
some weeks stood just above AGO.
With reserve Strengthening,
with bank borrowings being reduced
and a pronounced note contraction it
will readily be seen that some of
these straws are blowing from a de-
pendable quarter.
The advance letter on general bust
ness conditions issued by the Har-
ward University committee on eco
romic research, revised to the 18th
inst, Is decidedly encouraging in
tone and indicates distinct slow
: ing-up In the downward trend of
commodity prices" Trying to ar
rive at conclusions from a study of
the business cycles it finds that while
before the war recessions in whole
sale prices were liable to continue for
fifteen to eighteen months, the vio-
lence Of the recent recession indi-
Gates duration of not more than
fifteen months, thus bringing an end
to the present recession about next
April. It also finds that evidences of
reviving confidence are appearing in
those lines where liquidation has
made most progress. Retailers in
some sections at least, report an en-
couraging response to recent price
reductions and that their stocks are
not above normal"
There has been some outcry
against what was termed undue de-
fation and increase of difficulty in OBJ
tanning needed loans, on the one hand,
and charges of imitation on the other.
1t appears that during the past
twenty months the increase of loans
was less than the increase of de-
posts by II per cent, which seems
to support Controller Williams con-
tention that criticism of undue in
fation is not justified. Indeed the
condition Of the national banks ap-
pears to be conservative. The re-
serve is thought to be adequate for
needs. but what seems especially de-
sirable at this time is a defiation in
apprehension. and an imitation of
confidence Of the right sort, conf
dence that there never in this world
was a greater demand for honest
values and honest business. But the
public has got to be assured, In some
degree at least. that the demand is
being met. Then it will begin to buy
and the wheels will roll ahead.
Among the straws now blowing are
Indicators that this is coming about.
also that there is increasing impa-
thence with exorbitant demands of
labor. as seen in building construc-
ton, and with attempts to blame all
the high prices onto labor when the
returns show fat dividends earned
There is evidently money enough for
doing the necessary business when
ever those engaged in doing it ar
Z rive at a fair basis for operating and
demonstrate, the fact to the con-
sumner.