Norwich bulletin., 1922-12-02

| the business and financial situation dur ing the past month than for some time, and there is considerable difference of opinion as to the significance of many of the current changes, writes Frederic H. Curtiss, chairman and federal reserve agent of the Federal Reserve bank of ] Boston in his monthly review of indus trial and financial conditions in the New England district
 Money rates are always an important factor in the business situation and they should of course, be carefully considered in any analysis of it. Money. rates. fol- . lowing their long decline from the latter part of 19z0 to the summer Of 1922. turn . ed upward In last August rather sharply and suddenly. Such a movement would not have been noteworthy in the years previous to 1914, before the federal re- serve system was put into operation, be- cause of the annual crop moving require ments practically always resulted in Q seasonal increase in money rates in au- tunn. But during tine pre-federal re- serve era Of banking, money rates had
 seasonal decline in November, afteI
 the heaviest of the crop movement had
 passed, and yet this year they held firm
 and did not fall. In fact. the former
 seasonal movement of money rates has
 not been in evidence since the federal
 reserve system became operative. It
 may be argued that since the general
 improvement In business activity has
 caused Q larger demand for commercial
 credits. money rates should naturally
 tend to be higher through the operation
 of the law of supply and demand. One
 answer to. this Is that, even with the
 recent Increased demand, the amount of
 credit being loaned by banks is relatively
 small, compared with the available sup
 ply. Its difficult to ascertain just which
 are the motlvating causes for the recent
 upward trend in money rates, and even
 bankers opinions on the subject are not
 unanimous.
 The course of commodity prices is an-
 other Of the important factors in the
 business situation which should be con-
 sidered at the present time. An index of the price of 20 basic commodities which
 are usually sensitive to changes in bus
 mess activity showed only half as much
 increase during the first four weeks of
 November as during the corresponding
 four weeks in October, and one-third as
 much increase as during September R.
 G. Dun & Company's weekly tabulation of
 approximately 300 wholesale quotations
 showed that, while during the first three
 weeks of November more commodities ln-
 creased in price than decreased, the sur
 piUS Ol lICEedSeS was utll as large as it averaged throughout September and October. In other words, he movement of wholesle commodity prices during No- , vember was not as strongly upward as during October
 Another vital factor in the situation is the trend of the retail distribution Of . merchandise. The volume of retail trade in both the department stores and wo- . mems apparel shops In Boston during
 October was larger than in the cor , responding month of any of the three ! previous years, according to reports re- ceived by the federal reserve bank. On : the contrary, sales during October in a group of department stores situated in 2 other New England cities were less than in the same month in either 1920 or 1921. Of even more importance, in none : of the groups of reporting stores was the 1. seasonal gain between September and October as large as. usual
 t The above, as we'll as several other factors, seem to point to the conclusion n that there has been at least a temporal l or seasonal slowing down in the ratt ] of improvement in business during tht 8 past few weeks.
 e Manufacturing ActIvityAThe averag 3 rate of manufacturing activity in Nev n ngland during October was higher thai r at any time since the beginning of tn Q business depression in 1920. Production | was at the average rate of nearly 90 pc 0 cent, of full time capacity.
 Most of the larger industries of Nev A England participated in the increased ac 6 tivity exp fenced between September an
 October, Ind the improvement was wide s spread. The textile industry, however n which is perhaps more noteworthy tha e any oth-r- because it Is the largest i a this district, is operating at higher rat v than its normal average. Worsted spiS . ming spindles ran at 94 per cent. of thei .- single shift capacity during October an ,t wide looms at 79 per cent Production i l- the cotton textile industry, while not quit s at as high per cent. of maximum as i Ii the woolen and worsted sections, never V theless shows an improvement.
 d Conditions in the paper industry ar d relatively good-prices were firm durin n the past month Paper production durin Is September was 27.4 per cent. larger tha "a in the same month last year. Manlfactul e CTS stocks are lower than last year whi. IA shipments are larger.
 .s There was little change in the activit d of the metal trades industry between Ser d teTnber and October and in fact dealel ys reported during November that the
 sales had fallen off. The metal trade
 however, are nevertheless operating at 'e 1 higher rate than they did in the fall 7. 1921, or, in fact, at any time since Il ee business depression started.
 u ot Manufacturers of jewelry and silve y ware report that while their sales durir .e the spring months of the year we, t' lower than in the preceding year. N !. marked improvement started in the mi .- !. dle of the suInmec which has continue U, throughout the fall.
 LII The confectionery industry in this di - trict has operated at a higher rate du sn ing the past few months than it did y year ago, though this industrys like Il - jewelry and silverware manufactures D.