AMERICAN TRADE

Evening Post, Volume CXV, Issue 144, 21 June 1933, Page 12

AMERICAN TRADE

; IMPRESSIVE ADVANCE GROUNDS FOR OPTIMISM "Evening Post," June 21. ,' *\Keep your eye on America" is the Advice of a number.of British authorities lon finance.' They expect and state that .the first signs of improvement and trade *will be seen, in the United States and afterwards become more apparent in other countries. If these observers are correct an their view then the remarks made by the Guaranty Trust Company of New lYork will be read with particular interest Jn London as elsewhfere. This prominent American banking institution observes that •luring April and part of May '"the most impressive advances were made in business activity and in price levels since the beginning ol' the depression." The lank emphasises the fact that the clearest evidences of recovery are largely confined .to the heavy industries and the security j land basic commodity markets. ■ j . "But scattered reports indicate that eonetruetive influences have also been felt in ether branches of business where comprehensive statistical information does not become available so ■promptly as in the lines just mentioned. Particularly encouraging are the numerous instances of increased employment and higher wage lates; that have been reported" from all parts of,the country. . , . . . i "There are several reasons for believing that the recent signs of improvement re- • fleet, in part at least, the operation ot genuinely constructive factors in the underlying situation. One is the simple historical fact that the recession has already continued well into its fourth year. Seldom, if ever, in the past has a violent and continuous downward reaction extended over such a long period without effecting the necessary readjustments and laying, the groundwork for a sound recovery. THE UPWARD MOVE. "This view is strengthened by a recollection of the revival that began last summer and'-attained considerable momentum beiore it was halted by a combination of iactors/ prominent among which was the growing distrust of the banking situation. This obstacle now "seems to have been removed/It .is not unreasonable, therefore, to regard the current expansion as the continuation or the resumption of an upward movement that really began almost a year ago.' • "As time goes on; continues the review, the scope and magnitude of the advance in business activity become more apparent. Most of the basic industries, including steel, automobiles, bituminous coal, electric power, lumber, and some branches ot the textile industry, have already riiien above the- levels of a year ago.. Railway freight loadings have exceeded the total for the corresponding period of the preceding year for almost the first time sjnee the depression began. Department-store sales increased' in April by much more than the usual seasonal, amount. Most significant of all, factory "employment and payrolls increased last, month,, contrary to the usual April trend. The increases over the March, figures were moderate, particularly in -view of the abnormally depressing'influence of the banking holiday. Recent reports from various industries, however, indicate very strongly that the upward tendency gained momentum in the last few> weeks of April and that, the complete figures for May will show substantial (gains." ..'■.. . : . i FINANCIAL IMPROVEMENT.. 1 . Improvement is noticed in the' financial • "The exchange value of the Idollar has shown increasing firmness. The Withdrawal of currency from hoarding has proceeded to a point where-the sharp increase in circulation immediately, prior to the banking holiday has largely disappeared. The amount. of, gold, and gold certificates outstanding in the hands of the public has been cut in half-since March 8 and is now the smallest -in more than ten years. The banks open and operating ■without restrictions are estimated to represent 90 per cent, of, the banking strength .of the country, as measured by jdeposits; and: the 5000 or more banks that fare still under restrictions are being rehabilitated as fast as conditions permit. The most striking feature of the rise In commodity prices to wliich notice is Idrawn is the fact that, thus far, it has 'jaffected'chiefly", the prices of basic raw materials.'. The wholesale-price index of •the Guaranty Trust Company, .which is Jbased on prices of 23 commodities of. this fclass, advanced 32 per cent, between February 15 and May .15, while the weekly index of the Bureau of Labour Statistics, jwhich is based' on 784 commodities of all yasses, rose only" 4.5 per cent, between ilarch 4 and May 13; the latest-date for (Which an index number is available, i "This comparison is in line with the Visual experience, inasmuch as fluctuations }Sn prices of raw materials almost always 'occur earlier and are more violent than 'ithose in manufactured commodities. Some ''authorities are of the opinion that the itirastic decline •in prices of leading raw .Materials in recent years has been one 3of the major factors in prolonging and Aggravating the depression and that a susj'jtained advance in such prices, iunless 'it iirfses from artificial -. currency manimilaftjpn, will be among the most definite indications of genuine business recovery."