The Birmingham age-herald., 1922-02-21
NATIONS BUSINESS IS NEARING POINT
 OF UPWARD SWING
New Era of Prosperity Near, Declares Annual Report of the Federal Re-
 serve Board
By Associated Press

Washington, February 20.-Busi- ness throughout the country pro gressing through we'll defined cycles is nearing the point of the upward swing of the economic pendulum, ac cording to the annual report of the federal reserve board, transmitted today to Congress.
 'erhere are those," says the re-
 port, 4who believe that the be-
 gfnninE of revival is not far
 distant. When ii does definitely
 set in. it will he followed in due
 course by a new era of pros
 perity.
 Business in one Of it's Hong swings from prosperity, the report said. has followed it's usual rotation which it described as business activity and in- creasing production: excessive ex- pansion and speculation. follow ed hitherto by panic and forced liquida lioni a long period of slow liquida ton, business depression and stagna- ton and then revival. In the light of recent experience, the report warned, we should remember when we again enter into a period of fuil prosperity, that reaction will follow sooner or later. and if the How of the incoming tide can be controlled so that the crest may not be reached too rapidly, nor rise too high, the subsequent reaction will be less se- we're, and tho next period of indus trial and commercial activity and general prosperity will be marked by saner methods, greater achievements along constructive lines and by a longer duration than any which we have had before.'
 No Suggestions Offered
 The board confined it's report to an account of the operations of the or ganization for the year 1921. with out offering any suggestions for legislation affecting the board. or tae federal reserye Bystem- The earning assets of all federal reserve banks, the report said, amounted OH December 28. 1921 to $1,535,S51 ,000 compared with ss, 26S, OPT 900 on De- cember 30. 1920. a reduction of $1.- 727 tt6.000 or 53 per cent and re- duction of s1SS6, 125,000 or 55 per cent from the high point reached on october IS, 1920.
 This reduction in loans. the report explained, was accompanied by a steady increase in gold reserves and an almost continuous reduction ill Federal reserve note circulation, the loan reduction continuing despite substantial decline in discount rates.
 Earnings Are Less
 Gross earnings of the federal re- serve bank for 1921, the report con tinued, amounted to s122,S65, 900, com pared with $1S1,297 coo in 1920. the falling off in earnings being due to decline in the volume of rediscounts and reductions in rediscount rates. Member bank borrowings, according to the report, showed d continuous decline from S2.6S7. .O00. GOO at the end of 1920. to about S1.144, 1000, 900 at the end Of 1921, due to a reduction of over 900.000,0 900 in the volume of Ted . cral reserve notes in circulation, caused by lower price levels and by net imports of gold amounting Co s667 ,000, 000 practically all of which found it's way into federal reserve banks.
 As a franchise tax the federal re- serve banks paid into the treasury l s59, ,974 900 for the year 1921.
 Huge Reserve Noted On December 2S, the report con tinues, the federal reserve banks held d gold reserve of $2.s70. 900, 900 and combined reserve against member banks deposits and note issues af slightly more than Fl per cent. If the legal minimum reserve of 35 per cent could be set up against deposits, the report added. there would remain a gold reserve of more than 97 per cent against federal reserve notes m circulation.
 For some months past the re- | port said, there has been mark ed casing in domestic rates of interest | Notwithstanding some unfavorable ! features in the revenue laws. the in vestment market is now absorbing 1 securities at reasonable rates which could not have been considered a few months ago. Market quotations oi Liberty bonds have steadily advanced until they are now approaching par | Good railroad and industrial bonds have also appreciated and there have been some noticeable advances in standard stocks. High commodity | prices and lower money rates bring i bfsrher market prices for bonds"