The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1921-05-31
General Improvement Financial
Status Points to Sterilization

CHICAGO, May 31.-The business
survey for the month of May. as re-
Elected by the federal reserve bank of
Chicago, is as follows:
General improvement in the finan.
cial situation points to gradual stabi-
lization of business conditions. Bust
ness is going through a process OF
backing and filling" as a result of
the effort to liquidate stocks purch,
ased at higher prices, and to replenish
at the new market level, lines of
merchandise as they are exhausted.
One factor stimulating hope in the
business mind is the utterance- of w.
p. G. Harding, governor of the federal
reserve board, at the foreign trade
convention, expressing the belief that
I'VE are now entering the final stage
of the great postwar re-adjustment
period" and that the most of our
problems are now behind us, from
banking standpoint"
Continuing, Mr. Harding said: The
one great problem which still con-.
fronts the banker, and it is problem
which also concerns the producer and
the distributor equally, is the question
of how to thaw frozen credits, be-
| cause, of necessity, after the great
period of expansion that we have wit
messed and the re-adjustment that has
followed, many credits which were
thought to be liquid, have been fro
zen." His utterance that now in the
present situation where many institu-
tions throughout the country find
credits, formerly liquid, now in a fro
zen state, it seems important that
/ something be done to start a move
ment," is stimulating removed activity
| in the effort to break up the frozen
credits and thus facilitate the thawing
| process.
Money Rates Ease.
improvement in foreign exchange is
! encouraging the hope of an increased
movement of farm products, as we'll
as manufacturing, to foreign countries
which will contribute to thawing Out
of many credits in the more strictly
agricultural districts.
Loans and discounts and invese-
ments other than United States Sc
curities owned, reported by individual
member banks, in selected cities scat
tered over the Seventh federal reserve
district, show results of the general
! liquidation in process since the peak
in October.
Total borrowings on May II showed
| decrease of SO per cent from the peak
in October, and of 16 per cent from
April 9. Chicago banks on that date
showed decrease in borrowings Of SO
per cent from the peak in October,
and of "a per cent from April 9, while
| Iowa banks showed decrease in Dor
rowings Of 81 per cent from the peak
in December, and of 10 Fer cent from
April 8.
The Federal reserve bank of Chi
| cago shows a practically steady i'm
| provement since April 1 of this year.
Total bills on hand show a sharp de-
crease since that time, while increase
| in total reserves and decrease in Fed
/, eral reserve notes in actual circula-
ton reflect this change. Total de-
posts have been fairly steady, except
! for the decline on April 81. The re-
| serve ratio indicates the generally i'm
| proved conditions since April 1.
! On March IS, change was made in
the method of computation Of the re.
serve ratio; from which date. total de.
posts were used instead of net de-
! posits as previously.
Farm Work Delayed.
Farm work has been retarded in
part of the Seventh Federal reserve
district by weather conditions. The
unreasonable weather and especially
cold spell and frost has done consid
cradle damage to fruit, especially that
| which blossoms early, although this
damage is quite spotted, and conse-
quently it is difficult to make any.
thing like an accurate estimate as to
its extent. There has been some
abandonment of winter wheat acre
age, but the crop, according to reports
now available, although somewhat un
even in fields, is in good condition, the
late frost not being much of factor
because of the hardness of the plant
While the spring wheat acreage is not
as large as last year, there is compar
atively little of this class of wheat
grown in the Seventh Federal reserve
district. Spring wheat is a factor
however, in our grain markets and
banking activities. The farmer is ex
ceedingly conservative in his pur
chase of goods, and buying in the
farm communities is reported quite
"! limited.
! In the manufacturing centers trade
continues in a surprisingly good vol
ume, in view of the general depres
sion. This is especially noticeable in
those cities where industries expert
enced a sharp slump around the end
of the year, but since have picked ul
in activities, even though considerably
below last years operations. There is
considera BILE evidence-and this is
borne out by the movement of mer
chandise in the centers-that funds
accumulated during prosperous years
are now being drawn upon and used
savings deposits in many instances
show declines.
Collections are somewhat mixed