Evening star., 1921-09-24
BY STUART p. WEST.

NEW YORK. September 24.-In no
week SO far this year have develop
ments affecting the business and
financial situation been so uniformly
favorable as those of the past six
days.
In the eastern section of the coun-
try. almost the last steps have been
taken in undoing the restrictive
measures upon credit which mark ed
the period of extreme imitation from
the fall OF 1919 to the midwinter of
1920-21. In the midst of the crop
moving season. when money demands
are ordinarily at their maximum. the
federal reserve banks at New York
and Boston have reduced their dis
count rates to per cent-that Is,
nearly back to- where they were two
years ago. The general banking posi-
ton is the strongest IN tour years.
and the present ratio of 6Sa. per cent
compares with 491e per cent in the
/ final week of September, 1912
Low Rates for Loans.
In keeping with the reduction in
bank rates, open market quotations
have fallen so that commercial paper
lis back very close to what it was in
the early autumn two years ago.
while time money is much easier than
it was either then or at the same
period of 1919. In fact. the present
figures of 81 TO 512 per cent on loans
for fixed periods are the lowest and
the supply the freest in long series
of years The lowering of the inter
est rate calls for a lower return on
investments, and, consequently. a
raising of investment values. This
readiustmcnt going on all through the
bond market and affecting stocks, the
dividends on which are limited. en-
boldened syndicates to offer new Sc
curities like the equipment trusts on
terms which would have been wholly
unacceptable even month ago.
Increased steel Activity.
AT the same time the trade news
has been better. The Steel Corpora
tion has followed the lead of the in'
dependents and put up its prices for
sheet steel S. ton. The Iron
Age. not given TO optimism. has
gone on record with the stateme mt
that a gradual increase of activity at
the steel mills is looked for curing
the remainder of the year. although
with no broad buying for forward
delivery expected before 1922. The
tone of the copper market is f-mer
and the demand some what better than
a week ago.
Railroad Business Increases.
| What is of still more consequence,
| railway traffic statements have shown
| that the Improvement in business Of
| fered to the railroads during August
was considers bly, greater even than
| had been looked for 1t is true that
! the increase over July is mainly due
, to the larger movement OF grain and
! cotton to market. Nevertheless. be-
f; tween the August gross gain and the
heavily reduced operating costs the
! railroads appear in the most comfort
able position they have been in fo1
| years.
DenatiCn Has Run Its Course.
! The reserve banks in the east would
! have not cut down rates had there
| been any more liquidation to do in
| their districts or had any further en-
| ceptional demands been foreseen from
| localities outside. Their action is open
! to one Interpretation only-that in the
| Judgment of the heads of the banking
| community defiation has run hs full
! course in the eastern part OF the coun-
E! try, and is so far along in other sec.
| tions that ii is safe to lift almost com
/ pletely the credit barriers which have
| been in force for the last two years
! What this assurance means to Ameri'
can business it is difficult to over.
| estimate 1t is certain that its full
| stimulus has by no means been meas
| ured either in the Wall street markets
! or at the trade centers by the move.
| ment of the past week.
! StahilixntIOn Of Cotton Prices.
/ In the cotton trade the fear that
F, further rise in prices would lead tt
| curtailment of manufacturers de
/, man.;S has proved counterbalanct
/ to the most sensational estimates toi
| crop deterioration. If, however, cot
! ton prices are stabilized around Che
/: tWenty-ce pound level it should
! be all that cotton growers have a righ,
! to expect. No matter what some ex.
| tremists may say regarding produc.
! ton costs, the south. if it can sell ai
/ 20 cents. will be able to pay off its
! debts and have a buying power left