New-York tribune., 1921-06-28
Little Improvement i'm Situ-
alton Noted by Reserve
Banks as Buying in Many
Lines Shows Slackening

General business conditions In the
middle West and Southwest show little
change from the preceding month, ac-
Goldlng TO June reviews of tho Federal
Reserve banks in Cleveland. St. Louis
and Dallas. A recession in the automo, ,
tive industry, increasing unemploy-
ment, is noted in the Cleveland dis
trlct,. while general summer dullness
and lack of readjustment in prices to
lower levels are held to be depressing
factors in the Mississippi- Missouri
valley and in Texas.
On the whole business men in these
sections seem to be looking forward to
abundant crops to revive trade, beiev-
ing that little change in the situation
can be expected III the meanwhile. 1t
Is felt that readjustment of prices on
more equitable basis will have gone
much further by that time and that
farmers, favored this year by lower
costs of production, will be in better
position to fill their requirements.
With the slowing UP in the automo-
bile industry in the Cleveland district,
building trades have revived to some
extent as q result of wage readjust-
ments. "The automobile business failed
to show as much activity in May as
was expected" says the review of the
Cleveland bank, "but the industry in
general appears to be going along
fairly we'll. One manufacturer reports
his output at about 40 per cent of
normal.
"The rubber business continues to
slow up and orders are affected by mid
season inactivity.
"The thought that various lines of
business which showed such a promis-
ing squirt last spring are now losing
ground is not pleasant one. If we
remember only that unemploym is
plentiful, that wage scales and prices
are unsettled, that the iron and steel
industry is at low ebb, and that the
transportation problem is still unset
tied, the outlook is not encouraging.
However, if we stop to consider that
crops prospects are good, that the
financial condition of the country is
sound that consumption at present is
in advance of production, that we have
labor, factories and raw materials to
produce goods, then it is not difficult to
see business on the upgrade"
Some improvement in placing orders
for future delivery was noted in some
lines in the ST. Louis wholesale mar
kets, but as a rule conservatism con-
tinued predominant. Gone universal
comment among all lines investigated" :"
the ultra conservatism. of buyers, both
merchants and the public. This atti
tude is accounted for by various ex
plantations, chief among which is the
current belief that prices have not
reached the ultimate limit of their
downward trend, especially in the re-
tail section of distribution. Another is
the uncertainty relative to the outcome
of agricultural production ald prices
to be realized on this yea9's crops.
With the approach of harvest for the
early crops, however, this feature is
losing potency as an influence upon
purchasing psychology"
Net sales at retail in the district
showed a slight decline in May COM
pared to the same month year ago.
although in St. Louis there was small
gain. The shoe business did as we'll in
May this year as in May, 1920, while
many other industries were far below
last years figures. Agricultural re-
ports encourage prospects of bumper
yields.
So far as the Southwestern situation
is concerned much depends upon for
eign takings of raw cotton. Demand
from this source has shown, signs of
recovery, and bookings for June and
July for shipments of cotton to Bremen
are said to be the largest since before
the war. Improved inquiry for wool
has been noted, and crop prospects
have improved greatly in the last
month, SO that business, at present in
huenced by mid-season dullness, may
benefit by changes for the better with
in few months.