Wood County reporter. [volume] (Grand Rapids [i.e. Wisconsin Rapids], Wis.) 1857-1923, 1922-07-06

around the world, has an optimistic
message here. a message that should
be studied by every financial power
great or small and one that shoulc
be read and absorbed by the general
public.
Despite the continuance Of certain
adverse factors, such as the coal anc
textile strikes, and the unsettline
psychological effects of the proposed
bonus and tariff legislation, as well
as European problems, the business
outlook is decidedly more promising
than at the beginning of the year
For several months after the peak OF
of imitation had been reached and
read Istment was begun, improve.
ment was more pronounced in the
banking situation than in the field o1
production and trade. This was tc
be expected. Not until the strength.
enlng of the credit structure had made
considerable progress was the basis
laid for any marked degree of genera
industrial revival. Meanwhile, produc-
ton costs in many lines Were con-
siderably reduced, due to somewhat
more reasonable wage scales and low.
er prices for raw materials.
In addition to the increasingly
favorable position of the banks as
a whole, an expanding volume of pro-
duction, greater than can be accounted
for by seasonal variations, has been
sustained for some months. This in
dustrial progress, following, as it does,
prolonged period of credit liquids
ton, has substantial bases for con-
tinuance.
Prices Seek the Normal.
A favorable factor of major sig
nificance is the course of commodity
prices in recent months. For nearly
year average wholesale prices have
been fairly constant. Individual
prices, it is true, have fuctuated
sharply in some cases, but the chief
movements have been such as to re-
duce the wide disdispartes in relative
levels. The appreciation in the value
of cotton, grains and other agricultur-
al products, for example, has done
much to restore the balance between
the buying power of the farmers and
that of other elements of the business
community. In turn, banks in the
South and West have benefited great
ly, either through the actual liquida-
ton of loans or increased assurance
that customers will be able to meet
their obligations. The comparative
stability of general wholesale prices
for nearly year, has induced a
marked degree of confidence that for
some time present price levels will
be sustained, or, at least, decline, if
at all, gradually. This is reflected
in an increased volume of forward
buying.
The pronounced building movement
throughout the country is both a cause
and an effect of better economic con-
ditions generally in the United States.
Likewise, the recent improvement in
the autonotive industry is more or
less symptomatic of business condi-
tions as a whole.
1t is also of considerable signifi-
canoe that the railroads are prepar-
ing for increased business activity, as
indicated by the number of freight
cars and locomotives contracted for
thus far this year. Orders for equip
ment have recently been unusually
heavy.
That we have passed the peak Of
business readjustments is evidenced
by the gradual but steady decline in
the number of commercial failures
and the amount of liabilities involved.
Production Stimulated.
The prolonged period of sub-normal
production in most industrial lines has
permitted the utilization of accunru-
lated stocks of commodities. In con-
sequence, current consumption needs
are stimulating further production.
Business improvement, however,
remains spotty. Moreover, produc-
tive capacity in many lines is con-
siderably in excess of consumption
requirements. Necessarily such a
condition will be disturbing factors for
some time to come. There is clearly
foreshadowed period Of intense
competition, domestic and interna-
tional. The recent instance of COM
petitive downward revisions of GER
tain ocean passenger rates is case
in point. Corresponding competition
for survival by domestic units is in
evitable.
The fear, voiced from time to time
in one or another quarter, that our
huge gold reserves and the remark
ably strong position of the Federal
Reserve banks will lead to a period
of secondary imitation" has been in
tensiied by the recent trend of the
stock markets. Nevertheless, there is
; ground for confidence that the Fedora
Reserve Board will direct its activity