Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1922-02-20
PROSPERITY. AHEAD,
CONGRESS IS TOLD
Business Nearing Point Of Up.
ward Swing, Says Federal
Reserve Board Report
NO LAWS ARE SUGGESTED
Nv the Associated Press


throughout the country, progressing
through we'll defined circles, Is nearing
the point Of the upward swing Of tho
economic pendulum. according to the
annual report Of the Federal Reserve
Board transmitted today. to Congress.
'There are those" the report said,
"who believe that the beginning Of re.
vival Is not far distant. When 1t does
definitely set in It will be followed in
due course by a new era Of prosperity
Business, In one of Its ''long ewings'
from prosperity, the report said, has
followed its usual rotation, which it
described as business activity and in.
creased production expressive expan-
sion and speculation. followed hitherto
BY panic and forced liquidation: a long
period of slow liquidation, business dc.
preston and stagnation; and then re.
vival.
''In the light Of recent experience"
the report warned. 1--WE should remem.
ber. when we again enter into period
Of full prosperity. that a reaction will
follow sooner or later; and IL the flow
Of the INCOMING tide can be controlled
80 that the crest may not be reached
too rapidly nor rise too high the sub.
sequent reaction will be less severe and
the next period of industrial and com.
mercial activity and general prosperity
Will be marked by saner methods,
Greater achievement along constructive
lines, and by longer duration than
any which We have had BEFORE
Suggests no Legislation
The board confined its report to an
account Of the operations of the or.
ganization for the year 1921. without
otIering' any suggestions for legislation
affecting the board or the Federal Re.
serve system. The earning assets of all
Federal Reserve banks, the report said.
amounted on December rs. 1921. to
:53S .S51 600. compared with 49,.
283. .O27 900 on December 30. 1920. =
reduction Of 81 ,727 ,176, 900, or 53 per
cent: and a reduction Of 81, 1886, ,125 900,
or 30 per cent from the hiRh poiut
reached on October Is, 1920.
This reduction in loans. the report
explained. was accompanied by a steady
increase in gold reserves and an al
most continuous reduction in Federal
Reserve note circulation, the loan re.
duction continuing despite substantial
decline in discount rates.
cross earnings ct the Federal Ke.
tinued, amounted to si2a seSs SSe. sSSo. com. sHm.
pared with $1s1 .207 900 in 1920. the
falling on in earnings being due to de-
cline in the volume of rediscounts and
reductions in rediscount rates.
Member bank borrowings, according
to the report. showed q continuous de.
cline from S2.0S7 .O00, 600 at the end
of 1920 to about 81 Id. .000. 900 Mt the
end Of 1921. due to a reduction of more
than S9O0.0O0,OOO in the volume of
Federal Reserve notes in circulation.
caused by lower price levels and by the
net imports of gold amounting TO $GG7,. I.
100000, practically all Of which found
Its way into Federal Reserve banks.
As u franchise tax the Federal Re.
serve banks paid into the Treasury
$50, ,974 900 for the year 1921.
Tell Of Gold Reserve
On December %, the report contin. .
ued, the Federal Reserve banks held a
gold reserve Of $3.50, ,000. 900 and n
combined reserve against member banks
deposits and note issues of slightly
more than II per cent. If the legal
minimum reserve of IS per cent could
be set up against deposits. the report
| added, there would remain Il gold re.
serve Of more than 97 per cent against
Federal Reserve notes in circulation.
For some months past" the report
said, "there has been q marked casing
Of interest. Notwithstanding some un-
favorable features in the revenue laws,
the investment market Is now absorbing
securities at reasonable rates. which
could not have been considered few
months ago.
Market quotations of Liberty Bonds
have steadily advanced until they are
now approaching par. Good railroad
and industrial bonds have also apprc.
ciated. and there have been some no.
ticeable advances In standard stocks.
"High commodity prices and great
business activity usually mean lower
prices for bonds and other securities
yielding u fixed income. while reduced
commodity prices and lower money
rates bring higher market prices for
I La