Current Situation

Business has not yet clearly and as a whole shown any tendency to improve. Conditions are still "spotty," with some industries going ahead in fine style, while others hang in the doldrums or even grow worse. The iron and steel trade, the oils and the sugars have shown the most improvement; automobile companies also feel themselves on firmer ground. But the fertilizers, the textile trade, and the leathers are still uncertainties. Yet there is little fear that the difficulties recently experienced in the Northwest will speed East, and a considerable body of opinion inclines to the view that Europe is turning the corner this Winter.

Money remains easy, although the bankers continue rates which are high in proportion to market conditions. The main justification for this policy is of course the fear of inflation. Nevertheless, declining earning assets of certain Federal Reserve banks may be a contributory cause. The expectation of a lowered rediscount rate is general; it is felt that this move is after all the "ace-in-the-hole" of the party which has undertaken to make this Presidential year one of prosperity and confidence. Much "bull ammunition" has already been shot off, such as U. S. Steel's extra dividends and encouraging prophecies by individuals who usually care little about seeing their names in the paper. The lowering of the rate of rediscounts will doubtless be delayed as long as possible, but it should come presently. The recent advance in bond prices has been seemingly in anticipation of such a move, but the stock market has not yet been affected by it.