New Britain herald., 1922-02-20
BUSINESS SHOWING
 BETTER TENDENCY
Economic Pendulum About Ready
 to Swing Upward Again

Washington, Feb. 20. Business throughout the country, progressing through wcl-defined circles, is near ing the point of the upward swing of the economic pendulum, according to the annual report of the federal re- serve board transmitted today to con- gross.
 There are those," the report said, who believe that the beginning of re- vival is not far distant. When it does definitely set in it will be followed in due course by a new era of pros perity."
 In Long Swings"
 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 eXpan- sion and speculation, followed hither- to by panic and forced liquidation; a long period of slow liquidation, busi- ness depression and stagnation; and then revival "ln the light of recent experience" the report warned, I've should remember when we again en- ter into a period of full prosperity that reaction will follow sooner or later; and if the flow of the incoming tide can be controlled so that the crest may not be reached too rapidly nor rise too high the subsequent re- action will be less severe and the next period of industrial and comme rcial activity and general prosperity will be marked by saner methods, greater achievement along constructive lines, and by a longer duration than any which we have had before"
 No Legislative Plans
 The board confined it's report to an, account of the operations of the or ganization for the year 921, without offering any suggestions for legisa tion affecting the board or the federal reserve system. The earning assets of all federal reserve banks, the report said amounted on December 2S, 1921 to 1,535, ,S51 ,000 compared with $3,- 263 ,O27, ,000 on December 30, 1920, a reduction of s1,727, 5000 or 53 per cent and reduction of S1,SS6, 5000, or S5 per cent from the high point reached on October Is, 1920.
 This reduction in loans the report explained, was accompanied by al steady increase in gold reserves and an almost continuous reduction in federal reserve note circulation, the loan reduction continuing despite sub decline in discount rates.
 Gross Earnings
 Gross earnings of the federal re- serve banks for 1921, the report con tinued, amounted 10 $l22, ,S65,o0o with s1S1,297 ,O00 in 1920, i the falling off in earnings being due 1 to decline in the volume of re- dis and reductions in re-discount rates.
 For some months past" the report sads there has been q marked eas ng of interest Notwithstanding some lnfavorablc features, in the revenue laws, the investment market is now securities at reasonable ,ates which could not have been con sidered a few months ago. Market luotations of Liberty bonds have steadily advanced until they are now approaching par. Good railroad and industrial bonds have depreciated and here have been some noticeable ad tances in standard stocks. High prices and great business lctivity usually mean lower prices for ponds and other securities yielding fixed income, while reduced commo- lity prices and lower money rates ,ring higher market prices for ,onds.'