The Birmingham age-herald., 1921-11-28
By THEODORE II. PRICE,


 Copyright, Theodore If. Frice Publishing
 Corp, Is Exchange Fla"e. New York.)
 New York, November (SpecialJ Thanksgiving, a peculiarly American holiday, has been described as "a fes- tival of hope in a land of hope" The description certainly fits the day we celebrated last week. for all over the country there was to be dscerned a revival of optimism as the peopl , stepped work and contemplated for few hours the blessings they enjoy.
 The news from the disarmament congress encourages the hope that an effective agreement along the lines of the Hughes proposal vii! shortly be reached and that under it the world will be able to quick ly redevote itself to the arts of peace. The most important product of the congress remains nevertheless the sentiment created and the better un- derstanding between the nations that has been promoted.
 The United States Congress has adjourned after passing tax ibll which pleases no one. and is described by Senator Shoot as generally and properly "condemned by the Amer ican people," but we can a { least be thankful and hopeful because there is an election in November, 1922, at which an entirely new House of Rep resentatives and 32 new senators may be chosen.
 Still another reason why business men should be thankful is to be found ir letter from the New York Fed eral Reserve bank to the member banks of that district in which they
 
 interest charged by them on paper offered for rediscount This Is as- srmed to be a feeble effort by them to restrain profiiteering among the banks that deal with the public, and while those who are sarcastic are calling attention to the fact that it comes from an institution which made a profit of 129 per cent on its cap ital last year, 1t is at least to be commended as indicating sensitive ness to criticism which it Is to be hoped will become more general among federal reserve officials.
 Federal Reserve
 This I say because many of those who read this letter have of late been writing me asking why they should be charged ', 8 and even per cent for bank accommodation, when
  are so much lower. Such rates would seem to be unjustifiable when good commercial paper is easily salable in New York at per cent and 1 advise those borrowers who feel oppressed to put the facts before the federal reserve bank in their district. The buyers of credit are about the only class In the community who have not resorted to buyers strike" and 1t is about time they acted. for the ever increasing accumulation of gold seems to make still lower rates a certainty.
 Net gold imports for the year up to November 10 were $604 100000, which Is about one and a half times the worlds gold production in that period. and unless the accepted laws of finance are fallacious or suspend ed the effect of this continued influx must be to increase the price of other things as expressed in terms of gold. By impounding the gold in the banks and restricting credit by high inter- est rates, bankers have until recent ly succeeded in averting what some of them have called "gold imitation" but from the action of the markets last week 1t seems doubtful whether 1t will be much longer possible to keep people from exchanging cheap money for things that are really more valuable. Take cotton. for in- stance. Years ago William B. Dana said that because it was instantly convertible and could be held indefi- nitely, cotton was more nearly money than any other form of merchandise. It advanced sharply last week in the face of ginners' report that indi- in of the government estimate. but still too small for the needs of a normal world. Tn the trade the advance Is ascribed to various technical factors, but the real reason Is probably subconscious appreciation of the fact that under present conditions cotton is cheaper than gold. The same statement applies to grain. Wheat is II cents above the lowest and corn is again selling at over 30 cents in Chicago, not because there Is any change in the relation of supply to demand, but because money has be- come or Is becoming worth less than food at current prices. Copper, an other article that has many attributes of money, Is again higher and prob ably for the same reason.
 Security Market
 In the security market the same in- fluence Is at work. Liberty bonds are at the highest of the year Some issues are in fact higher than since January. 1919. and other bonds, tax ables as well as tax-exempt, are in eager demand at advancing prices New issues which total possibly SlOO.- o00 900 a week are readily absorbed. Because of the ease with which bonds can be sold the government will prob ably be able to dispose of all the railroad obligations that 1t holds, thereby putting itself in funds to finance the roads so that the passage of the refunding bill will be unneces- sary Railroad earnings for October thus far reported are better than ex- rected, and as rates are reduced ana traffic stimulated they will probably show further improvement. Some con fident buying of low priced railway stocks is at last noticeable, and the entire stock market IS distinctly firm. It seems to be only question of time when the plethore of money will be felt -in general revival of stock speculation.
 Even expert credit men. who have had greater reason to be depressed than many who have talked more loudly and despondently, are find ing conditions on the mend. At a meeting in New York last week they reported Increasingly successful ef- forts of foreign firms to pay off their indebtedness to our merchants. r,,arked denlation of stoclss ahroad