The Birmingham age-herald., 1921-04-11
By THEODORE H. PRICE

writing me in regard to the outlook k says: We can now see daylight aheat
 and that is a good deal. considering
 the darkness of the past" l prefac'
 this weeks review with the above quo
 tation because it seems to summa rig
 the opinions expressed by most Ameri. can business men that are in a position 1 to take a comprehensive view of condi-
 tions. Thus David R. Forgan presi-
 dent of the National City bank of Chi cago voices a similar optimism oi l spirit in an interview in which he says: At such a time as this there are all
 ways pessimists who cannot see what | is ever going to happen to cause a re- 1 covery but in long experience l have never found that the pessimists were right. 1 have great faith in the recu- perative powers of the United States of America.
 Tn many lines, particularly those which were first hit and hardest hit, orders for goods are now quite numer- ous. They are still small and represent hand to mouth policy on the part of the buyers but urgency of shipment is @ very noticeable and encouraging fea- ture of these orders"
 haHy otHer statements rom equally
 good authorities to the same effect could be adduced if space permitted. but the citations made sufficiently att test the growing confidence in the fu- ture that is to be discerned UnderIy- ing it is the fundamental improvement t in the banking position that is evil denced by the federal reserve bank statements published on April 3. The significance of these federal reserve figures is not generally appreciated as 1t should be by the business men of the country.
 RATIO INCREASES
 Last week the reserve ratio of the entire federal reserve system rose from 50,S to 52.4 per cent, while that Of the New York bank separately con- sidered was 56-7, against 50.3 per cent at the end of the previous week. The result has been sharp decline in the New York. money market and a general relaxation of interest rates throughout the country. On the stock exchange the prevailing rate for call money has been o12 per cent, while 'on the street" some loans have been made at 4 per cent
 For commercial paper and collateral loans running not more than 90 days, the market is described as easier at from 6 % or per cent" The lower rates are not, however, as important as the fact that there is now no difficulty in borrowing for legitimate commercial requirements.
 But the changed conditions are not as much due to liquidation as to the remarkable inflow of gold to which have repeatedly called attention. Gold is coming to the United States from every direction. Even bankrupt Aus tria sent us $300000 few days ago and VI, 100000 of German gold is said to be on its way here via Scandinavia. Some or the gold that is coming is supposed to have been hoarded during the war by those who are now sending it to America as the safest repository they can find.
 Since the first of the year the gold reserves of the federal reserve banks have gained s1S7,10S. 900 and stood at s2,24e 900. 900 on April ,. A still further increase is expected during the next lew weeks and experts estimate that. including what is held in and outside the banks more than one third of the worlds entire gold supply is now in the United States. The movement is one of the economic phenomena of the post war period, and if it continues at the present rate much longer it would seem that what is called gold imitation" will be the inevitable result Up to now, however, the speculative spirit that would usually be fired by such a pos- slbility is still chilled by a contempla- tion of last years losses and prices on the stock exchange are practically un- changed, except for an advance in Lib erty Bonds, which are logically the first security to reflect the decline in in terest rates.
 A few more corporations have passed or reduced their dividends to conserve their wnrEinpr r al being the Midvale Steel company. whose omission to make any distribution among it's stockholders has given the numerous bear party an opportunity that has not been neglected.
 HOPED FOR CERTAINTY
 After the bank statements and the decline in interest rates, the most inn portant development of the week has been the Presidents announcement that the leagee is dead and that the Yer sailIes treaty will not be ratified by the United States
 This announcement was made on the fourth anniversary of America's en- trance into the war. While it has eHcited many expressions of regret from those who had hoped against hope Tor m end of the present chaos through a modified acceptance of the plan to which most other nations have assent. ed, it must be admitted that MT. Hard. lng's course is the one logically indi- cated by the vote cast last November. and those who believe that the will of the majority should govern have no right to quarrel with it.
 Its commercial consequences are nevertheless. hard to foresee, and it may be that one of them will be tho loss of the good will that we have hith. 'rto enjoyed in Europe, which has until recently been such an important factor n the extension of our foreign trade This is a possibility that should be kept n mind. but it is mentioned as a possi- oiiity rather than a prediction for tho future of our international relationship s now beyond human prescience.
 Among the indicia of business that become history as the ends the follow ng are the more important;
 Bank clearings as reported by Brad- streets show a decrease of 15.5 per ,ent. It is tiresome to repeat that this decrease is less thap the decline in prices and that an increase in the vol lme of trade is therefore indicated but 1, he present feeling of depression is | argely due to the fact that men ignore l he increase in the value of money and hink that fewer dollars mean fewer | hings and less real wealth, whereas | precisely the reverse is the truth
 The same statement applies to the re- | port of the credit clearing house for l he week ending April 8, which shows | decrease of 5 per cent, as compared | with 1920 in the money value of whole ale purchases. The quantity of goods [ hanging hands must. of course, be ] arger than a year ago.
 DUN'S REPORT
 Dun's quarterly report for the first