CONDITIONS IN U.S.A.

Dominion, Volume 14, Issue 93, 13 January 1921, Page 5

CONDITIONS IN U.S.A.

MUCH UNEMPLOYMENT

BUSINESS GREATLY RESTRICTED ? ft , ' In thoir monthly, trade circular, dated New York, December 4, 19-0, Messrs. John Dunn, Son and Co. report as follows on the general conditions prevailing in the United States:— The course of readjustment of general business conditions has continued durin November at an unconifol t<j.bly pace. Liquidation, both forced and voluntary, has been severe at most P 1 ’ I '”?}* markets for commodities; raw and manufactured products being equally affected and even shares of industrial enterprises falling in sympathy, lhe general outlook at this time is tor a period of depression lasting for some months, and until money becomes more plentiful. Retail dealers are the object of muw criticism for not more fully allowing the general public the benefit oi these reductions. The people understand the situation quite well, and are reluctant to buy freely in anticipation of the change, that all realise must soon come. The dealers are counting on the holiday trade to help clear their shelves, and are naturally anxious to dispose of old stocks with the least possible loss, anti to- reduce their holdings of goods to a minimum in view of the approaching inventory period. Dus situation has restricted business largely to immediate requirements, and ! while the present volume of trade is fairly large, these conditions are slowly but surely throttling business activity all along the line. That this will confhiue until well into the new year seems probable, but there is a strong feeling among manufacturers that the retailers should promptly take (heir looses and begin restocking with merchandise at current prices. Should their doing so bo long delayed, some large interests are talking of trying direct sales through chain stores or retail branches, but this is probably more of a threat than a serious purpose. The importance of general liquidation of old high cost stocks, is apparent, as the present deadlock is increasing unemployment and so ..diminishing the buying power of the general public. The amount of this unemployment is considerable, nnd for this reason Elfe flood of immigrrt - * tion now arriving, and which is sure to continue unless checked, is viewed with some misgivings by all, and by the labour unions with alarm. It is probable that the question of immigration will receive serious consideration by the next Congress, and some restrictive measures may be adopted. The plan advanced by the Labour interests is for practically a total suspension for two yea-rs, but it is to be Siped that no greater barrier than a more severe .educational test with evidence of self-sup-porting- ability will be enacted. There is ample evidence that wages are beginning to crumble, but this phase of deflation will necessarily be gradual. In many industries agreements exist that run well • into the future. Tn other cases where the industry is unionised, reduction at this time would meet with strong opposition. In some cases employees have accepted reductions without protest where it was a pase of lower pay or no employment. ■ln others, men have been dis- , , charged and immediately re-employed at lower wages. Employers generally are loath to make reductions until the cost of living shall have reached a lower level. Financial Conditions. The unsatisfactory conditions surrounding foreign trade have, been the dominating subject of interest in the financial world, although the -whole business situation is much disturbed by the violent fall in commodity prices. Restrictions as to the financing of exports have made such business difficult, while the refusal or inability te receive consignments by foreign buyers have thrown a great strain on the export houses. Considerl ing the conditions now existing both here and throughout other parts of the world, it is not surprising that the record oi failures for November both as to number and extent of liabilities should be the largest recorded for several years. These have included not only commercial houses, but some ten or twelve ■ small banks in the agricultural districts of the — West, who were forced to close their doors owing to having loaned too freely against grain when at much higher prices than now prevailing. Speculative industrial securities, particularly the motor shares, "have fallen violently at times, and railroad stocks ■and all descriptions of bonds have declined to some extent. Money has been in somewhat better supply, and call money based on stock exchange collateral was quoted on one day qt 5 per cent., the. lowest for the yeiir to date. The range has been from 5 per cent, to 10 per cent., with 7 per cent, the ruling figure. Time loans against the same security have ranged from 7 per cent, to 8 per cent, for maturities up to 90 days, and 6 per cent, to 8 percent. for four and six months. During the past few weeks a considerable volume of business has been arranged at the lower figures quoted. , Commercial paper, choice nanjes, commands from 7} per cent, to 8 per cent. The price of silver has declined steadily, foreign silver now being quoted at 76 cents per ounce, which compares with 82 cents a month ago, and 1 dollar 32 cents at this time last year. Domestic silver continues to bo absorbed by the Government at 99) cents. November has been a month prolific in rumours ol pending financial difficulties, but few ol which were actually based on facts, and it is felt that the weak spots have now been pretty well eliminated, due to liquidation or banking assistance. The expectation of easier money by next spring and the feeling that the worst must now be over in the way of falling prices is quite general. While the situation is still simmering, it is believed that the process of readjustment to normal conditions is well on the way to accomplishment, and that a revival ol business on n sound and basis is only a -matter of months.