The Birmingham age-herald., 1921-08-15
Rumor Mongers Play Hauoc
 With Receptiue Minds and Effect Reflects on Market
Past Week Shows Improvement in Building Iron and Steel, Silk, Cotton and Woolens, Automobiles, and Tres Volume of Retail Buying
 and Primer Prices

good. June returns from all but one of the Class 1 roads show net op- erating income of $o1,77S,000, com June last year. For July, estimates indicate that net earnings will be even higher. Car loadings are stead fly increasing.
 The decision to effect a reduction estimated at $55O.000,0 900 in the na- tional tax bill is welcome, though it has been long deferred. The details of the proposed revision need not be stated here. They are fully given in the daily press. The proposed reduc- ton in the, heavier surtaxes may weaken the market for exempt bonds the further issuance of which Is prohibited in a constitutional amendment that has been offered in Congress, but has small chance of ratification even in the distant fu- ture. The supply of such securities Is meantime undiminished, and bonus bills passed or under consideration by state legislatures contemplate the distribution of s375, 1000. 900 among the soldiers. The House is expected to pass the tax revision bill by Satur-
 
 adjourn for month. Most business men are enviously pleased by the de- cision The money market is static.
 Reasonable Rates
 Borrowers in good credit should nave no difficulty in obtaining the accommodation they need at reason able rates if Governor Harding of the reserve board and Governor Strong of the New York bank are right in the optimism they express. The "gol- den flood" continues, and the federal reserve banks have increased their gold reserves by s23,O00,00 during the week. The reserve ratio stands at 6o per cent, the highest in three years.
 In industry the effects of the steady retail consumption which has kept up throughout the period of depres- sion are being shown in increased ac- tivity New York is crowded with buyers. The demand for textiles is very active and is reflected in the full employment reported by most cotton mills. Silk consumption dur ing July was the largest in year and half Even steel, best barome- ter among the industries, and coal. the chief laggard, show signs of re- covery, for in steel both mill opera tions and orders are above their fig ures of few weeks ago, and in coal there is a frmer tone to prices and evidence that some of the largest consumers are preparing to place their contracts. Building during July, according to Bradstreet's, was Az per cent above the June total. A number of automobile plants report increased pl oduction. Southwestern flour mills o nn ba 1or Ia n, a year, majority of them working 24 hours day seven cays a week. General improvement is reported from the shoe industry.
 July's foreign trade showed sharp declines from year ago but strangely enough the balance of trade in our favor is larger than it was then. Exports totaled s322.00o,0 900, compared with s651,136,47S. and inn ports s17so0o,ooo against s537,11S, S71, leaving balance of s144,000, 900. which compares with s114,017,o07 for July, 1920.
 Foreign Exchange Market
 The market for foreign exchange continues to puzzle the experts and defy the comprehension of the unin- ttiated. In a few hours last Tues day sterling advanced 10 points on dn OTQeI lO Duy tOUU,VUu. plllS TOT other currencies rose sympatheticai,y hut most of the improvement was soon lost. The fact seems to be that as result of the decline in exports and imports the supply of bills is very much reduced, and the market is becoming a very narrow one in which a great many speculators have been caught It's future is inscrutable and cautious merchants will be care full to buy or sell their exchange before committing themselves on transactions which involve drawing or remitting to Europe.
 The news from abroad isl more fa- vorable than unfavorable Ireland's reply to the British governments peace proposals has gone to Lon don, and the promptness of it's answer is taken to indicate that it is favor able British trade for July showed a further increase in exports and decreases in imports. and the textile outlook is so much improved tha, many Lancashire mills are increasing their output. Both Great Britain and France report reductions in note circulation, but in Germany the total is climbing week by week. and re- ports of reviving German prosperity should be read with due allowance for imitation The release of Ameri- can prisoners from Russia and arr engagements to relieve the famine have proceeded without serious set back.
 On this side of the Atlantic the Mexican Congress has at last started consideration of the constitutional provision nationalizing petroleum de- posits, which is the chief bone or con tention with the United States. Re ports to the department of commerce indicate improving business condi- tions throughout the world.
 Balancing these various develop ments against each other l see more cause for hopefulness than Tor de- pressicn, provided we do not let rear get the better of courage in acting upon the facts. which indicate steaoy progress in reconstruction on ootn sides of the Atlantic.
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