The Birmingham age-herald., 1921-02-21
By THEODORE H. PRICE. tEditor Commerce and Finance.D

Ing Corporalion.J
 New York, February 20.-(Special)-- )-- Bank clearings for the week ending last Friday, as reported by Brad streets, were 30.9 per cent less than for the same week a year ago. Even mak- ing allowance for the Lincoln day hol- iday, which fell in the previous week last year. an average daily decrease of about 24 per cent is indicated.
 Superficially considered. the figures have been interpreted to mean that business is falling off. This interpre- tation is, however, a mistake. Whole sale prices as reported by the federal department of labor declined an aver age of 6 Is per cent during January. at the end of which month they were 35 per cent below the peak touched in May, 1920, and 2Sl5 per cent under the departments average for January last year.
 The decline in clearings and the de- cline in prices are, therefore. about equal and it follows that the indicated volume of trade is about the same as it <1s a year ago. Probably an ac- tual increase would be shown if we could eliminate from the bank clear ings the exchanges due to speculation, which was active last year, but is dor mant now.
 
 lieve that the feeling of depression is at variance with the facts, in that it is due to the decrease in the dollars that are changing hands and disregards the increased purchasing power that these dollars have latterly acquired
 This belief is confirmed by the steadier tone that is discernible in the wholesale markets. The demand for silk goods and raw silk, for instance. is rather in excess of the supply. Rub Der is firm and higher. The cotton market has been distinctly steader despite the hypothetical surplus that the statisticians are worrying over A premium is being paid for immediate deliveries of both flour and wheat and sugar is firm at an advance of nearly a cent from the lowest figures touched. Incidentally, the American consump tion of sugar in 1920 was the largest on record, being 92 pounds per capita. There are some--w who argue that it is due to the increased appetite for sweets caused by prohibition. It is certainly amazing, when the high prices that ruled during most of the year are con- sidered.
 BUYING IS ACTIVE
 The fact is that retailers, having bought but little during the last four or five months, now find themselves with empty shelves and without the goods requireN to meet even norma demand. Production has in the mean time been reduced and in some lines there has been created a potential short interest that can only be, covered at a costly advance in prices.
 That such condition might be brought about by the hyper pessimisn of the past few months has been more l |. A~1 asa lat ttox,r and I call attention to it again that those who would be wise in time may avoid further crastination in sup plying their legitimate requirements.
 The growing ease of money that has been foreshadowed by the rising re- serve ratios is the main reason for the increased demand for merchandise that is to be noted The very best com mercial paper is now salable at per cent, and while that rate is still paid for renewing call loans on. the New York Stock exchange large sums have been lent at Ion the street"
 The week Has seen some cessation in the offerings of new bonds, but an "ex- ternal' loan for $24,o00,000 advertised for account of the republic of Chile, on rather better than an 8 per cent basis has been successfully disposed of and the copper loan of $40000,000 brought out last week is said to have been ab- sorbed. It had been hoped that this last transaction, which was rather a novelty in that the security offered was merchandise, might open the way for similar loans on agricultural prod ucts such as cotton and tobacco, but for the present at least this seems un- likely. The repayment of the copper very strong corporations acting with loan was guaranteed by group oi a degree of CO., operative concert thai seems unattainable in the cotton and tobacco trades.
 AMPLE CONFIDENCE The changes in the stock marke have been insignificant. There is z little more evidence of speculative in itiative in the industrial department while railroad stocks have been re- markably steady when the lugubriou. reports of poor business to which the railway executives are giving currency are considered. Some 35S.065 freish cars are said to have been idle on Feb ruary 8. A well known Wall stree