The Birmingham age-herald., 1921-08-01
Gold mfloW Continues Ln
 Undin1inished Stream With
 Interest Rates at Lou Ebb
Easier Money Is Helping the Commodity as Well as In- vestment MsAkets, and Those Who Have Hes- itated to Buy Before They Sold, Are
 Now Reversing Their Programme
By THEODORE H. PRIcu

By THEODORE H. PRICE
 Editor Commerce and Finance, New
 York
 (Copyrtsht, Theodore H. Price Pub-
 fishing Corporation, 16 Exchange
 Place, New YorI<.)
 Now York. July s1.-(special0- 0- Signs multiply that Comptroller Cris. singer was right when he predicted a period of gold imitation. The gold Inflow continues in undiminishec ed volume. and the holdings of the fed eral reserve banks at the close ot business last Thursday showed an in- crease of $23,o00,0o0 for the week AS result the reserve ratio gained nearly per cent, and now stands al 63.4, the highest point in more than three years.
 Call money Is down to 3h per cent and the very best commercial paper can now be sold at less than per cent. Liberty bonds. treasury certifi- cates and other interest bearing ob- legations which have a broad market and fluotuate in inverse relation to interest are gradually advancing This Is always the first stage oi what Is called by some 'inflation' and by others prosperity. No mat ter what 1t may be called, it Is due to the increase in our gold supply and to the apparent reversal of the deflationary policy by which until recently the federal reserve board and banks were inspired. As tc whether their change of heart is due to the criticism to which they have been subjected by ex-Comptrol- Tor Williams. Senator Owen and oth- CTS. or to n quickened sympathy with farmers and business men, we need not now inquire. MT. Williams ap- pearance before the joint committed Of the House and Senate has been postponed until August 3, but the Congressional Record of July 25 con tains some rather sepsational corre- spondence between Representative Bland of Georgia and Vice Governor Platt of the federal reserve board from which 1t would appear that the federal reserve policy is rapidly be- coming political issue of the first magnitude.
 Money to Move Crops
 Meantime 1t may be taken for granted that there will be plenty oi money to move the crops without any financial discomfort or drain upon the investment funds of the country. The volume of new security issues has accordingly increased sharply during the week ,an offering of $500, 00o,00o of treasury notes, part of which bear the lowest interest rate offered this year. being heavily oversubscribed.
 But easier money is helping the commodity, as well as the investment a rl af nd hA ha0 al tated to buy before they sold are now becoming more confident of their ability to distribute merchandise, and are therefore willing to replenish their exhausted stocks. As I point ed out last week, in many lines they are finding that they have delayed too long, and that earlier underpro- duction has created something of 8 shortage.
 This is particularly apparent In the textile trade. The latest market let ter of the National wholesale Dry Goods association comments upon the acute scarcity of at least four lines, one of which Is ginghams. This report should be read in connection with others showing unusually heavy retail sales of cotton piece goods, a notable increase In the distribution of dress patterns, especially of the sim pier kind, and a remarkable growth in the sale of sewing machines by Chicago mall order house. The revival of home dressmaking, the as- tonishing maintenance of chain store sales at & high level and the in- crease in savings deposits in Greater New York by $11o,000,000 during the first six months of 1921 are each in their way evidence5 of the hard work and economy to which we must look for increased production at lower costs and complete resumption of business on a basis mutually profitable to capital and labor.
 Lower Railway Rates
 Agitation for lower railway rates shows no sign of decreasing, and their reduction may be the next great specific influence to bear on business improvement. Industrial leaders are taking care that the public is not left Tn the dark as to the important relation freight rates have to prices For instance, in announcing recent price cut prominent steel man showed that the making of a ton Of finished steel requires the transport of more than five tons of raw ma terials and the increase in the charge for this transportation repre- sents more than a third of the total increase over the pre-war cost. Ru- mors are already in circulation that the roads will soon ask another re- duction in wages, to be followed im- mediately by a reduction in freight rates, and where there is so much smoke there is likely to be fire.
 The condition of the roads is stead ily improving The crop movement is beginning to bring the surplus cars into use, June earning reports show ing radical reductions in expendi- lures. and their financial position will be greatly strengthened when President Harding's plan of funding their debts to the government, wnlle at the same time paying the gove<p- ment's debts to them Is acted upon Therefore, 1t seems improbable al present that it will be necessary to act on the appeal of 400 Michigan fruit growers that Henry Foro should be put in charge or all the railroads.
 Improved Prospects
 Public appreciation of the improved prospects of the railways is shown in the firmness of their shares on the stock exchange, but it may still be pointed out that their total securi- ties are selling at little more than s12,0O0, ,00o, 900, while their originai cost of construction was around s2o,-- o0o,0o0, and their reproduction cost at present values would of course be considerably more.
 More idle employees are being re, called and put to work on delayed improvements and repairs. The re- yiyal of railroad buying, which IS not far distant. will give impetus to many industries, especially the laggards, lumber and steel l was surprised the other day in talkins to a prominent rubber dealer to nno that even he was looking forward 10 tn sfranRthen Ine