SIGNS OF IMPROVEMENT.

New Zealand Herald, Volume LVIII, Issue 17895, 24 September 1921, Page 11

SIGNS OF IMPROVEMENT.

CONDITIONS IN AMERICA.

MONEY SITUATION EASIER.

WORKING DOWN TO STABILITY.

The latest reports of conditions in the United States are written in optimistio language. The National 'Bank of Commerce in New York, writing on August 19, states that business conditions reflect more clearly than a month ago the improvement then under way, though it was then, as now, somewhat obscured by the usual midsummer dullness. The increased availability of credit and the marked declines which have taken place in money rates in the last six months are among the surest evidences that the betterment is founded on improved fundamental conditions. Conditions in July have all tended to confirm the helief that genunie business improvement is under way. Manufacturers in many lines are sometimes wont to express a sense of discouragement, however, because forward orders are not as heavy as they were during the late period of abnormal business activity. It is doubtful whether this is justified. Good business policy requires caution on the part of buyers. Failure to exercise it contributed to the difficulties from which the country is beginning to recover. Smaller orders for early delivery if received in sufficient amount to maintain operations on a reasonable basis are at this time an indication of a healthy condition * In a report dated August 8, Messrs. John Dunn, Son and Co., of New York, observe that although little, if any, improvement in general industrial conditions can be seen during the past month, the situation is not without many encouraging features. A fair volume of business is current, particularly in the retail division, which is much more active, relatively, than the manufacturing or distributing branches, a condition which, of course, cannot last indefinitely. Underlying conditions are moving steadily along lines of liquidation and .price readjustment, preparatory to a new start, and rates of wages for labour are slowly but surely following the downward trend. Many observers feel that a full revival of trade is not desirable at this time and that the processes now at work had best be allowed to run their full course, so that when a new order of things arises it will be resting on a firm foundation.

THE DECLINE IB PRICES. . AN OFFICIAL COMPUTATION. A comparison of average prices of various groups of commodities in June, 1921, and June. 1920, was recently published by the statistical branch 'of the United States Department of Labour. Prices ruling in 1913 are taken as the standard, equal to 100, and the table shows those in 1920 and 1921, in terms of that base, and the centesimal decline in the year ;—

Decline June, June, Per i 1920. 1921. Cent. Farm products . . 243 113 53* Food, etc 279 132 524 C'.ofha and clotting 33f> 180 46i Fuel and lighting .. 246 187 24 M*tals. inetal products 190 132 30 Buildine materials . . 337 202 40 Chemicals and drugs 218 166 24 House furnishing goods 362 250 30 Miscellaneous . . .. 247 150 39 All • commodities .. 269 148 45 From tbese figures it appears that prices of farm products and foods are almost back to 1913 levels, as are metals and metal products, while fuel, building materials and household furnishing goods remain at inflated prices. The average over all groups is less than 1£ times the average of 1913, values current in 1920 having been almost halved.