The Birmingham age-herald., 1921-01-10
By THEODORE H. PRICE, tEditor Commerce and FinanceD

Editor Commerce and Finance.) Copyright. Theodore H. Price Publish ing Corporation.)
 New York. January 9--(Speoial )--Be- cause it connotes the willingness of Con , gress to yield to the popular demand for more credit now making itself felt. the repassage over the Presidents veto of the bill providing for the rehabilitation ot | the war finance corporation is probably the most important event of the week. While the practical effect of the ac- | tion taken will not be great until the treasury is authorized to sell securities 1 (either bonds or certifcates) that will l provide the money needed to put the war finance corporation back in business the l moral effect has been to encourage the 1 belief that further deflation will be suc- 1 cessfully opposed, for the present 1 least and that we may be entering upon a period of credit re-extension with or without government aid.
 ! It may be remarked that in this respect the history of the era that followed our Civil war seems likely to repeat itself, for it was the reinflation permitted from [ 1866 to 1889 that postponed the collapse 1 then threatening in the United States until 1873
 1 Opinions may differ as to the wisdom 1 of the policy then followed and now ap-
 
 with facts as they are that we must deal, and the fact is that thoughtful stu | dents of current events are coming to the conclusion that we shall shortly enter 1 upon what some are already calling period of secondary inflation."
 l PRICE DROP HALTS l Reflectng this, prices on the stock ex- change have stopped declining and have l advanced quite sharply Liberty Bonds ! hay ris ha lrl,at for exchange. especially sterling. is distinctly higher. Cotton and wheat. our two most important export staples, have also inn ! proved in value the Bank of EnglanG 1 reserve has risen from 7.30 to S.S0 per ! cent; the London money market has de1 clined to AZ per cent for day to day and 57s per cent for 30-day loans, and the cheerful feeling noted last week seems to be extending itself over widen ! ing area here and abroad. Nor are future ! developments likely to restrict it's spread, for the creation of private machinery for | credit extension is steadily progressing. l The $00. 900 GOO foreign trade financing cor l, poration has announced the opening of temporary offices and will call for sub | scriptions to it's stock within a short 1 time.
 1 Synchronous with the more cheerful ! feeling is the improvement in the wool, | hide and leather markets, where the maintenance of recently increased activ- 1 ity gives hope that they have turned l definitely for the better. A larger volume of sales and hrmer prices are reported l from all the leading trading ceuters, At the last government wool sales all the | offerings were bought for the first time | in many months. Silk is also stronger, and rubber quotations advanced a full 11a cents in New York last week, These are 1 the commodities which under the pressure | of huge world surpluses led the. down.
 ward procession of prices. and their inn provement during the normally dull holi- day and inventory season gives added i force to the rising tendency of the busi- ness barometer.
 PLANTS REOPENING
 l During the week many reports were 1 received of the reopening of plants pre- 1 viously closed and of increased activity in establishments operating on part | time basis. In industries where read | iustment has been early and thorough the ] revival is likely to be permanent It is a natural reaction from the marked de-
 cline in wholesale buying during the
 same period. Last month I published fig
 ures of retail sales for October. meas ured in dollars, as compiled by the fed eral reserve banks, showing 10 per
 cent increase over the previous year
 The same computation for November shows that they were 11.6 per cent great CT than in November, 1919, and that
 stocks on hand decreased during the
 month by approximately per cent.
 The physical volume of trade hereby
 indicated becomes even greater when
 it is realized that prices during the month were considerably below those of
 a year previous In many cases the re-
 serve bank bulletins call the cuts "dras- tic" Furthermore, every available in-