Webster City freeman. [volume] (Webster City, Hamilton County, Iowa) 1884-1946, 1921-05-02
FIRE :'RbUY'ING
IN 1HEIC'II|ES
Seventh Federal Reserve
Bank Gives a Review
of Businss COndi-
tons in District.
BUSINESS HESITANT
Seeding Conditions Stimu-
late Credit COndi-
lions.

| the seventh federal reserve OlStflct.
sent ont by the Federal Reserve bank,
of Chicago, and which reached this city
today. is, in part as follows:
business continues hesitant. Reports
from diversified industries and terri
tories in the seventh federal reserve
district, while rejecting. as a rule,
operations considerably below a year
ago. may be characterized as variable.
The chief complaints are the limited
market in which to sell the output and
the difficulty encountered in the effort
to reduce manufacturing and distribu-
ton costs. These have contributed to
tie uncertainty regarding future de-
/. mands. The situation is decidedly spot
ted; large concerns III the automobile
industry. for example, in some in
stances report a production equal to or
in excess of the corresponding period Of
last year, while other equally large pro-
duccrs report curtailment Of 40 per
cent.
The employment situation is an i'm
portant factor contributing to the cur
tailed buying power, but Of even great
el influence is the effect Of the sharp re-
duction in prices for farm production,
| which apparently has left the farmer
without the means of payment OF obi
cations some of which We're contracted
before the price decline. The reports
indicate clearly freer buying move
ment in the cities during the last two
months than in the country. Saving
deposits, however, indicate that unem-
ployment or shorter hours of employ
mcnt is forcing some withdrawal of saw
/ ngs from banks, especially in the larger
centers where living expenses are high.
While the decreases are small and may
be overcome later on, they indicate that
the employment situation is forcing the
thrifty to fall back on their reserves.
Taxation A Retar1ing Factor.
Business is feeling also the weight Of
heavy taxation, for not only are the
federal and state taxes to be reckOned
with. but additional income is neces-
sary in practically all Of the munich
palities. because Of higher costs of adj
ministration and the elimination of re-
venues which formerly came from the
liquor licenses and other sources. Re
tell prices in the middle west are not
coming any nearer keeping pace with
the decline in the wholesale prices than
earlier in the year. This disparity is
everywhere evident between prices
which are based largely on raw ma
terials and those for the finished prod
ucts in which costs tend to pyramid
through the continuance of the high
level in wages. transportation and other
factors, until by the time the article
reaches the consumer the necessary sell
! ing price seems to be out of proportion.
The demand on the commercial banks
for money continues to be strong but
some progress has been made in build
| ing up the reserve ratio at the Federal
Reserve bank. The liquidation of loans
| is gradual. Inventories have been writ
ten down generally, while collections
show a slight improvement and are
generally pronounced as satisfactory.
One stimulating feature of the credit
situation is that the soil is working
Up well and seeding is progressing salts
factorily. Recent rains have stimu-
lated the hope for good crops. There
is still some disposition reported, how
ever, TO seed smaller areas, due in some
instances to hesitancy or inability Oh
the part of farmers to borrow.
Cash Reserves.
Total cash reserves of the Federal
Reserve bank of Chicago, Which had in
creased since the first of the year to
3SS millions on February IL, and then
decreased sharply to DOG millions on
April /, showed recovery to 352 mil
lions on April 10. Deposits have been
steady around go millions since March
IS. Total bill on hand showed increase
from $50 millions on March to 439
millions on April l, but on April IL
were reduced to 307 millions. Federal
Reserve notes have shown Il practically
steady decrease from the $50 millions
or January Z to 474 millions on April 1.
The Automobile Industry.
Manufacturers of automobiles IN
scme instances show q marked increase
| j.. Operati lions. Two of the large manu-
lecturers report operations at present
equal to Il year ago, while one reports
a reproduction in April larger than last
year. Some car manufacturers report
about two-thirds of the production of
this time in 1920, while others are pro-
cteding on an employment basis of
about 30 per cent Of year ago, the
production per employee, however, be-