The public ledger. [volume] (Maysville, Ky.) 1913-1968, 1922-09-25
MONEY ANw MARKETS.

| inc IoTemost Queahoh vi the nv
ment 9 whether tho remarkable activ-
ity Of the midsummer months will be
followed by a period of gradually and
conservetively increased business or
whether 1t is the forerunner of
period of secondary initiation. The in
dications points clearly to the conclu-
sion that good business based primar-
lily on domestic requirements is ahead
for the autoumn months but that in
flation in the generally accepted sense
will not occur.
| Manufacture is on a satisfactory
basis, excepting in so far as some n
dustries have suffered from lack of
coal and inadequate transportation ia
cilitiee. Crop yields are excellent for
practically all crops except cotton, &C
cording to the September estimates,
and the forecast is for a cotton crop
more than two million bales above
that of last year. Unemployment is
|
Wholesale business in the United
States during the autumn will show
considerable expansion over that of
the corresponding period OF 1921.
1t must nevertheless be recognized
that even though crops are large. dol
lar wheat, a considerable decline in
the price of hogs since the first of
June, and relatively low prices of
other agricultural products have re-
duced tn purchasing power of the
| farmer. The situation is similar in re-
spect to other important classes of raw
materials. These conditions and the
fact that not far from one million men
result of strikes during the greater
part of the summer, are major factors
which have effectively blocked infla-
| ton at this time. Business is being
| booked for requirements of the imme-
date future and forward buying is
cautious Good business is assured but
Conditions abroad and the state of
the exchanges are not such as to en-
| courage any idea that there is to be
any large increase in European bust
ness in the near future. Exports from
| the United States to countries where
general business shows improvement,
such as Australia, the leading South
| American countries. Central America
and the West Indies will probably in
| crease somewhat but these countries
are primarily dependent on conditions
in the international market for raw
materials, chiefly agricultural. and
their inhabitants are therefore in
position differing in no important way
from that of the American farmer
They will uuquestionably buy more
freely than they bought last year but
not extravagantly.
It may we'll be that prices in some
lines may continue to tend upward as
price and wage readjustment proceeds
but any rapid general upward tenden-
cy in the prices of goods ready for the
ultimate consumer would be checked
bywillingness and inability on the part
of purchasers throughout the world to
follow uD the market. Manufacturers
and merchants will still find it es-
sential to pursue policy of careful
and economical operation, for the best
prospect of profits lies not in rapidly
rising prices bu in operating efficiency
and gradually expanding volume of
business.
The probable course Of money rates
during the next few months may be
judged in connection with several fac
tors, namely, the degree of activity in
general business, the course of govern
ment refunding operations, the amount
Of slack present in the lending capac-
ity fthe individual banks Of the coun-
try and the change in the effect Of
crop-moving requirements on the
money situation by reason Of the oper-
atoms OF the Federal reserve system.
One Of the prime purposes Of the
establishment Of the Federal heserve
system was to overcome the seasonal
stringency which prior to that time
had bee ma characteristic Of the money
market OF this county. The abnormal
business conditions which prevailed
from the autumn OF 1914 until mid
summer OF 1921 made It impossible to
Judge with any accuracy the probable
Of the system in stabil-
izing the money market through the
season. During the au-
tumn months OF 1921 the dominant
factor in the money market was the
rapid liquidation Of loans as a result
of the general business readjustment
then in progress. The current season
Is the first since the passage OF the
Federal reserve act when the machin-
cry then established has had the OPP
portuniyt to function under reason
ably normal conditions. 1t is never
theless noteworthy that although large
crops were moved very rapidly during
the fall months OF 1921, the resultant
demand for money did not check the
steady decline in money rates.
On the basis Of current conditions