Great Falls tribune., 1922-02-19
FINANCIAL DIGEST
4 THE WEEK I'm BUSINESS .
BY STUART P. WEST
Deeial CerrespoRdsHt d Great Falls Tribune
opyriRht 1922 by The Great Falls Tribune
BY The Tribune.

BY STUART P. WEST
3pseiaI cerrsspeRdent d Great Falls Tribune
Copyright. 1922. by Ths Great Falls Tribune
New York, Feb. 1S.-Nothing very
important has happened to affect the
general estimate Of financial and busi-
ness affairs in the actual business days
Of the past week. It is still the nor
Asally dull season in trade and so it is
not surprising that the volume of COM
mercial transactions shows little
change. Confidence is still felt that
the spring will see business recovery
enter its second stage. The first period
of this recovery started in the mid
summer of 1921, and lasted through
the following November. Then came
lull, without, however, any real re-
cession. Taking the trade Indications
as a whole, they show that operations
fell off slightly in most lines in De-
cember and have remained on about
the same scale since then.
The New England labor troubles
have curtailed the demand for cotton.
The copper trade has been a distinct
disappointment, for instead of buyers
becoming restive at the steady
dwindling of available supplies, they
have been holding off to such an ex-
tent that the selling agencies have
had to lower quotations in an effort
to stimulate demand.
But these are special conditions
and do not influence the judgment that
Improvement win begin again by late
March or early April, and that this
second upward swing will carry far
ther than the one last autumn.
Recovery In Farm Products
The important feature of the i'm
mediate situation is the recovery in
farm prices. At this weeks high of
$1.421@, May wheat was up "a cents
a bushel from month ago. This,
with the corresponding rise in other
grains and in livestock, means a very
decided increase in the buying power
on the farm. If sustained it will as
sist general business recovery more
than anything else that could possibly
happen.
Next to the return of more profit
able condition in agriculture, increase
of the foreign trade would be the most
important factor in industrial re-
vival. The unfavorable position in the
foreign trade could not be remedied
while European currencies were at the
discount they were even as late as last
buL slllCc lutA StSlIuS Ado
risen almost two-thirds of the way
the German mark, other foreign ex-
changes have undergone a similar re-
cOvery.
Foreign Trade Improvement
The February figures of exports and
imports will be a fairer test of wheth-
er the recent advance in the exchanges
IN offonf Itryrnnpuu IaDoQn1
for American goods. In January, when
exports dropped to the lowest total
since August, 1915. the latest and
most rapid part of the rebound in ex-
change rates had only barely set in.
But whether or not there is an I'M
mediate response in the outward
movement of commodities, the rise in
foreign currency values points the
way to certain improvement at no
distant date.
Grounds for Brighter Outlook
The movements coming together
and the rally in the grain and the
fresh upturn in the exchange have
added greatly, even within single
month, to the grounds for the con-
fidence in the general outlook.
They should have their effect in
the investment movement, helping to
sustain bond prices, despite the con-
tinued output of the new issues. They
have had much to do with preventing
the reaction which the stock market
had been looking for after its Janu-
ary upturn.
Effect Of English Rates
Next in Importance has been the
world wide evidence Of progress to-
ward normal conditions. The Bank
Of England has put its discount rate
to Az per cent, where it stood in
July, 1914. This action has been
foreshadowed by the fall in London
open rates and by the cessation of
British government borrowing on
short time bonds. Nevertheless, it
was Of much Importance as setting the
seal Of official approval on complete
removal of credit restraint an da re-
turn to the pre-war state. 1t seems
altogether improbable that the fed
eral reserve board will be influenced
by the British example to put their A
present discount rates down.
German Currency
The reaction against the soldier
bonus with its threat of onerous taxes
or else a heavy bond issue, has been
reflected favorably in all the markets
but especially in the market for Lib
erty bonds. An unpleasant feature in
the general situation is the plan of the
German government 10 accomplish any
results in the line Of advancing the
budget. There has been resort to
another huge expansion of the paper
note currency to meet the monthly
reparations payments. This note cir
culation now stands at 116 billion
marks as against 81 billions a year
ago, and less than two billion before
the war. Necessarily the renewal of
this desperate expedient Of initiation
has led to fresh weakness in the Ger
man mark.
BUSINESS IMPROVEMENT
G0MTlAlIEC RIIH lC IIAnEDr IA