The Kendrick gazette. [volume] (Kendrick, Idaho) 1892-1968, 1922-11-24
Money Conditions

In its eighth bi-monthly survey Of
industrial conditions in the United
States in October, the National In
dustrial Conference Board, 10 East
39th Street, New York, says today;
Money conditions have been char
acteIized during the past few
months by relatively low rates of in
terest and rediscount, large availa-
bility of credit, increased specie re-
se'ves and continuance of heavy
investment activity. AS indications of
improvement in the economic situ-
alton are the growth of commercial
loans of banks in all reporting cities
and expansion in note cirulation,
which are traceable more to increase
in fundamental business activity
than to seasonal demands of agricul-
ture which assert themselves at
about this period of the year. The
drain on foreign gold stocks still con-
tinues and the ratio of reserves to
liabilities of the Federal Reserve
Banks hovers around 1870.
Partial explanation of the increas
ing strength displayed by some of the
principal foreign exchanges may be
derived from the fact that absorption
by American investors Of foreign
securities, both governmental and
private, has amounted to 1858 mil
lions in the first half of 1922, COM
pared with $626 millions during the
whole of 1921. A circumstance of
particular interest in this connection
is the large increase in investments
/ in foreign corporate enterprises,
which together with othe evidence
attests to the importance of the
American market as a source of cap
| ital supply. Because of the paucity
! of liquid capital throughout the
world and the urgent demands for it
in the coming years, of requirements
of and additions to existing stocks as
a result of the wars eXigencies,
this country will have to guard
against the financing of questionable
ventures and will have to undertake
the task of diverting investments
along lines consistent with sound
! principles of industrial and CONNER
cial development.
Vexations as the question of rep
arations is bound to be in its recur-
ring forms, it is relief to find the
first of next year. Belgium's ac-
ceptance of the German terms OF
payment has temporarily postponed
the whole matter. Meanwhile, the
latter country continues to be inun-
dated with floods of fresh currency
from day to day, but despite these
measures, the money and credit
stringency remains unabated, para
doxical as it may seem. The Reichs
bank has raised it's rate of discoun
from time to time but it has never
the less failed to stem the tide o.
credit demand. At time when pri
vate banks are receiving from theil
customers higher rates of interest
an increase of 10 or go Of thu
) Reichsbank rate will probably Prov
to be ineffe tive. At the root Of tn,
present choas in Germany lies th'
policy of deficit financiering pursued
2 by the government, and SO long a
+ this evil is not curbed, imitation will
= exact greater and greater tol
through economic disorganization-
Our foreign trade has kept up re
r markably well in the past six month
and the usual tapering off which ap
pears in the summer period did no
: not take place this year. Import
. in August were the heaviest in vol
3 ume of any month since 1920. prob
ably in large part due to anticipation
, of the new tariff provisions, and ex
= ports were somewhat ahead of Jul
e but still considerably below the fig
!. ure for the corresponding month o
/. 1921. 1t remains to be seen wha
/. effect the new tariff rates will hay
l on our foreign trade. 1t is in larg
degree probable that although gov
+ ernment revenues from imports ma
be swelled, this Improvement may b
at the expense of trade volume.
e