The New York herald., 1921-10-03
FINANCIAL NEWS
AND COMMENT
Conference on Unemployment
Brings Out Real Causes Of
Business Depression.
SIGNS OF IMPROVEMENT
Buyers Of Stocks Show Fear of
Discounting the Better
Outlook Too Speedily.
SIGNS OF IMPROVEMENT

PA0oapiS, tiaH dt any olner TIME since
the boom OF 1919 collapsed. Some of the
country's good minds have brought for
ward sound thought on the relation be-
tween slackened activities and slug
sish markets
| Wholesalers and retailers have been
I informed OF their duty to aid in the
readjust;nent by making prices low
enough to attract incomes which are
much less than year ago. The rail-
roads have learned that the public eye
Is upon them in the matter of transpor-
tation charges. but in fairness it is to be
said that the railway managers have all
along shown disposition to lower rates
In proportion to the reduction OF operat-
Ing expenses, the trouble being that
these costs are giving ground with
great deal of stubbornness.
While the conference thus far has not
touched upon labor's obligations. II may
be said that the public will be waiting
for something about wages to develop
before the deliberations are completed.
The whole business situation Is
clogged and obetructed.' says the Ma
tional City Bank, mot only by the high
cost OF railroad operations, but high
industrial costs. placing goods beyond
the purchasing power Of consumers. This
is the principal reason why MILLIONS of
men are out of work and it will have to
be squarely faced before any general re-
covery can take place. The sunshine
cure is no remedy for this situation.
Prosperity will not be created by cheer
full talk while this unbalanced state of
industry exists"
Signs Of Business Enlargement.
The markets. notably the stock mar
ket. have recorded the fairly widespread
impression that business is enlarging.
Taking New York State as an example
It's industries are d,versified-there are
more hands at work than in August.
which month showed an Improvement
in manufacturing over July, so as to
increase average weekly earnings
slightly.
The country's cotton mills have been
taking cotton for spinning since July 81
at rate much faster than a year ago.
The takings last week were 100 per cent
greater than In the corresponding week
Of 1920. The steel trade, while exceed
ingIy irregular in output, is working
fully 10 per cent. more actively than in
July and mills in certain lines are re-
turned from the depths Of summer de-
pression to 70 per cent. or more OF
capacity.
The trend Of railway traffic is toward
gradually enlarging bulk. and II this
growth Is sufficient during this month
and next to warrant expenditures it is
certain that the number OF railroad en-
ployees will be increased this winter
Tho roads cannot continue indefinitely
to Sigh. maintenance, as they have
done since May, and be able 10 handle
normal flow OF business. But IL Is
automatic that IL the unionized en-
ployees cease TO threaten strikes and
show willingness to accept working
conditions that entail less waste and
promote economies. the railroads will
add to their payrolls the quicker and
move more vigorously toward reduced
freight and passenger charges. Rail-
road statisticians can supply plenty of
figures showing that the rate increases
OF last summer added enthusiastically to
the cost OF things carried. Neverthe-
less, the road managers know as well as
anybody else that, whatever the statis-
tics show. business sentiment is re-
pressed by current rates and cut
would impart stimulus 10 manu-.
featuring.
The price movements of stock indicate
show also that buyers are fearful lesc
they discount too rapidly the passage
from depression. United States Steel
common. in its recent course, illustrates
this statement very well. In the week
OF August %. when the upward move
ment was Just getting under way, this
stock sold as low as 1854 Thence it
rose somewhat rapidly until sOM was
reached a little more than a week ago.
1t fell back from this point and fluctu-
atcd through n . to q. point range until
last Friday, when II managed to touch
so7s. Tho momentum which carried II
from around "A to Scst died away for n
time because spectators elected to wait
TO see, II possible. whether business con-
ditions warranted O further advance.
What OF the true situa ton in Germany
and its bearing upon the Industrial stu
alton in the United States? II is diff
cult to rec.ncile definite reports OF busy
plants and busy people I'm the new re-
public with German exchange SO low
over here that cent will buy nearly
one and a quarter marks. 1t is strange
! to hear OF the German Governments
hesitation 10 pay much more of the
reparations In cash and securities at the
same time that one hears OF private
German bank balances in the United
states larger than in pro-wsr days.
That developments in Germany during
The next three months will have pro-
| found influence In other countries goes
without saying. Either the 10000 oce