Great Falls tribune., 1922-03-13
FAVORABLE BUSINESS NEWS
HELPS OPTIMISTIC FEELING
By Wells -Dickey Co.

BY WeIIs-Dickey Co.
Probably the one thing which has
tended more than any other to crystal
ize an optimistic sentiment during the
past week has been the general run of
favorable business news both in this
country and abroad. The rise in the
grain markets is of particular signifl-
canoe to the northwest because It
means so much in purchasing power.
It is true that the advance which has
taken place in this direction has tend
ed largely only to lessen the dispro-
portion between what the farmer pays
in making his purchases and what he
receives for his output. 1t cannot,
therefore. be translated into purchas-
ing power to the fullest extent. In
larger part it is simply making it pos
sibIe for him to liquidate his indebted
ness just as the upturn in cotton sew
eral months ago in the south helped
the southern farmer. This increase i'll
price for farm products. therefore. is
having it's immediate effects in an I'M
proved banking condition throughout
the rural districts. This IN its turn.
however. must eventually be reflected
in the purchasing power Of these com
munities.
Another factor of outstanding i'm
portance has been the continuation of
the upward trend in foreign exchanges.
The advance of sterling to around 4.45,
the upturn in francs and of other for
eign currencies affords the belief that
the rehabilitation of Europe is being
accomplished with a rapidty fully as
surprising to the people of Europe as
it is to us. 1t is being predicted now
that sterling will reach par before the
end of the year but whether or not this
actually happens the fact remains that
sterling is now actually within striking
distance Of par. much to the confusion
of those economists who short time
ago were advocating new gold vaiue
in the pound to establish a new parity
of around $50.
The stabiization of foreign exchange
upon these higher bases means much
to our foreign trade, especially with
those countries with whom heretofore
trading has been fraught with unusual
hazards because of the speculative ele-
ment in the exchange situation.
Mail Order Sales
Reports of Chicago's large mail or
der houses show that mail order sales
from the northwest are showing sub
stantial increase. Coming at a time
when agricultural conditions appear
permanently on the mend this turn for
the better in the mail order business
seems to be we'll founded. Farm prod
ucts started their slide in February.
1920. and by May of that year there
was decline under way which had not
run its course until December. 1921.
Wheat which sold last December at
around 81 bushel is now selling in
the neighborhood of S1.50. Corn like
wise has rallied from a low around soc
TO about 70c per bushei.
The appreciation of 40 per cent in
corn means more to the farmer than
the 80 per cent appreciation in wheat
because most of the wheat was actual
" marketed before the recent rise took
plaee but this rise nevertheless has 4
sentimental effect upon the new crop
now being sown. In the case OF corn.
however. the farmer benefits both dl-
rectly and indirectly. There are prob
ably 1.5OO. 100000 bushels Of corn still
unmarketed, which at an increase ot
oOc per bnshel means an actual IN.
crease in revenue to the farmer OF
around S30o.o0O.OOO. This is size
able amount and cannot help but be
felt both in liquidation and in increased
buying power.
The Bond Market
still being influenced by the progress
of soldiers bonus legislation. yet the
general tone throughout the week was
unusually absorbed. New offerings
we're present in fair volume and in
most eases were quickly absorbed.
Rapid oyersubscriptions of the king
dom of Netherland 6's togethsr with
the tendencies toward lower rates for
money and for higher exchanges al!
reacted towards I'm increased demand
and created market fully as active
as has been experienced for some
weeks. Foreign governments and the
low priced rails both registered sub
stantial advances and under the stiInu-
lntion of improved exchange number
of the foreign issues were actively
traded in and prices throughout the
foreign list remained unusually firm.
active. New offerings at high levels
were quickly placed in the hands OF.
investors. It is reported from the
field that the competition for new is
sues among investment houses is keen.
which situation of itself presages u
further hardening in municipal retail
prices.
The popular demand for legislation
to render imperative further issuance
of tax exempt securities doubtless IL
going to be a vital market factor in
the sale of muncipals during the next
few years. nasmuch as these bonds
are rendered tax-frec through the
United States constitution 1t will be
necessary to secure constitutional
amendment before municipals are taxed.
This necessarily will consume lot of
time during which those investors for
whom tax exemption Is vital feature
will have an opportunity to accumulate
long time taS-cxempt bonds. Inc tax
;nr of municiDals naturally could not
he made operative against securities
already issued and for this reason the
investor need have little fear that
honds whose valuation at the time of
purchase WAS determined by the tax
axamnt feature will ever be affected