| Show A prosperous OUTLOOK today there are better grounds for confidence in a period of genuine prosperity ahead than at any time in the last five years says the national bank of commerce new york the agricultural outlook has improved materially since mid june and large crops of cotton corn and spring wheat are now forecast consumption is being maintained at high levels as evidenced by heavy of miscellaneous cellan cel freight b and of less than carload lots and fair gains in retail and wholesale trade over the corresponding period of 1924 in many lines of manufacture seasonal slackening thus far has been less than expected and already there are evidences in some directions of f increasing activity i in anticipation of active fall demand building and construction st are at record levels and contracts let and permits granted now assure a high rate of activity throughout the year expert trade is good and in certain lines american manufacturers are showing in gratifying fashion their ability to meet in international markets the rising tide of competition from europe although in the normal course of things money rates may advance somewhat as autumn requirements quire ments make themselves felt there is is ample credit available uncertain factors there is a singular coincidence of favorable factors but there are uncertainties of which due cognizance must be taken first of them is the fact that even yet the cotton and corn crops might prove disappointing the second possibility is the development of adverse er conditions in other countries with consequent unfavorable reactions here save for the struggle in the riff and the continued uproar in china the international situ situation i aaion is seemingly comparatively stable but the lessons of 1914 have ave taught the business men of the united states the ever present necessity of watching for storm clouds on the horizon british industrial activity is at a low ebb and unemployment is materially higher than a year vear ago business is far r from poland and satisfactory in germany belgium czechoslovakia ovadia ov akia and only moderately good in france only ill 11 italy is is manufacturing man activity unabated brodu production action bet ing 8 stained maintained at high levels in part at least to supply italy s expanding foreign markets the third hazard to which this autumns prosperity may bet et be e exposed is the disrupting influence of labor tro troubles libles the le intentions contentions building labor between certain factions of are enow now temporarily adjusted but the differences between coal oal miners and operators are yet ye t tobe to be settled in addition it is expected that the railway unions will make demands for higher wages this autumn while higher wages may offer the semblance of advantage to those labor organizations now striving for them it seems fairly certain that if won the apparent gains would prove to be wholly illusory for consequent price advances would be followed loll owed by reduced consumption a slowing down of business and increasing unemployment wage stability is is one of the first requisites for a long period of active business and general well wel being money rates the history of commercial loans during the past eighteen months suggests that changes have taken place which may require revision of our former ideas as to the increased amount of bank credit required for the usual seasonal demands and for expanding business the item all other loans in the summarized statement of more than member banks in leading cities which report weekly to the federal reserve banks is fairly indicative of the trend of borrowings iby manufacturers and merchants of the united states the extreme ran range rane n e of fluctuation 0 th this is total in the last year and a half hasteen has been from a low of on january 23 1924 to a high of on march 1 11 1 1925 since e september of last year the entire fluctuation has been between a minimum of approximately and the maximum indicated above despite the fact that throughout the period business activity in in most lines has been at high levels several factors have contributed to the stability of commercial borrowings hand to mouth buying quick tr asportation and rapid turnover with the resultant velocity of distribution considerably lessen the amount of credit required for the rhe completion of business transactions hard ex experience peri ence during 1920 and since has also taught business men the desirability of adequate working capital which has been acquired in various ways many corporations have strengthened their capital position by sale of stock or other securities others have con conserved their resources against times of stress in consequence I 1 many well managed enterprises today possess large cash or other equivalent resources which are entirely independent of their own businesses A condition favoring the accumulation of liquid resources has been the fact that many industries are overbuilt as a result of rapid expansion during duping the last ten or fifteen years so that the need of investing surpluses in fixed assets has been at a minimum an added influence to be considered in this connection is the steady improvement in the condition of banks in some of the main farming r regions egions liquidation by farmers of from the postwar boom has been their indebted indebtedness riess dating a slow process and even yet it is not c complete om the load formerly carried by the banks has now bee been n transferred in large measure to other institutions however and it is likely that the crops of this season will be moved with relatively little aid from the federal reserve banks securities some of the edge clearly is off the demand for bonds this is a direct reflection of the feeling that from now on a firmer tone toile will prevail in money while expanding autumn demand for funds for commercial requirements would probably be reflected reflected in rates there seems seem s to be no reason than moderate advances it seems likely like y that to expect forthe for the more present security prices c es will hold fairly well with trend end becomes more clearly tr soft undertone until the money a that the market marly be overlooked ver looked evident the fact is not to 0 in the constant accretions to t the he support has a strong huge surplus of tho the american people |
