The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1935-01-02
Trends
Optimistic Outlook
Taken by New
York Bank.
by VINCENT :. LYONS
Times Financial Editor

arU- come time the monthly busi-
Il ness reviews put out by banking
institutions throughout the country
have been more or less ierernlads.
Since the ouasi-truce between Gov
eminent and business these reviews
have tended TO take on a more opti-
mistic attitude toward the course
Of affairs. True enough, they still
do not constitute epistles which see
only the favorable signs Of the eco
nonic horizon, but at least they
are showing an inclination TO JOCK
more kindly upon the state OF the
nation.
For instance the National City
Bank Of New York in It's monthly
survey Of general business condi-
tons. released today, dedicates much
Of its publication to the favorable
tenor Of events in the past twelve
months and less TO quibbling over
governmental policies. II declares
that the turn for the better IN trade
and industry during the last TWO or
three months has had a plainly
h%eartening effect upon expectations
for 1885.
The upward trend, the bank as
serts. has been gaining momentum
and. on the basis OF orders on hand
in some industries, seasonal pros
poets IN others. and the reduction
Of merchandise stocks due to good
Christmas trade, it seems likely to
extend at least into spring.
n n
"THE chief question as to the
Il outlook for the latter part of
1885" the Bank says, lis whether
the improvement will spread to the
machinery, construction, and other
capital goods industries. Wear and
tear and replacement of goods of
every day use have brought other
upswings IN the industries making
such goods. but they have not led
to recovery.
The conditions which affect the
demand for capital goods are in
comparably more complex than
those which affect the demand for
consumer goods, especially at a
time when relief expenditures Of
the Government are helping to
make up the deficit in consumers
buying power. If the industries are
10 spend for new productive equip
ment they must first feel assurance
that they can make it pay for It
self. which requires that the goods
produced must be salable at a profit
They must have either money
or credit, and if they find it neces-
saTv to raise capital Of borrow TO
carry out their projects. as is usu-
ally the case where large sums are
required. the lender or investor en-
tiers the picture. He must be salts
fed not only of the correctness OF
the borrowers judgment OF the
situation, but must feel additionally
an assurance that the money repaid
TO him will be of the same value as
the money he lends"
y n -
GETTING of on another track
NJ the bank declares that the chief
requirement for the free produc-
ton and consumption of goods OF
every day use is that they can be
priced, allowing for costs and
profits, ct accord with the ability
Of consumers to pay.
Unuuestionably a principal cause
Of the disruption of trade has been
the disparity that developed between
the prices of finished goods and
those of raw materials, among
which the farm products 7 mos
important, in view of the extent OF
the farm market, it is pointed out.
Until the drought, it is said, little
was made as the MIA
raised prices of goods just as fast as
the AAA lifted farm values.
But since last spring the spread
has been closing rapidly. Retail
merchandise prices in December
have been slightly lower than a
wear ago. and retail food prices are
only SO per cent higher. But farm
prices are up 25 per cent. on o
is the ratio Of farm prices received
to prices paid was 81 per cent OF the
pre-war average, against 69 per cent
-. ~-oo~ r~or1ipV