AMPLE CREDIT AGAIN.

Taranaki Daily News, 8 September 1921, Page 2

AMPLE CREDIT AGAIN.

CONDITIONS IN AMERICA. WORST PERIOD PASSED. The United States is practically through the period of violent business disturbance which began in May, 1920, says the National Bank of Commerce in New York in a report dated July 21. We will from time to time have visible evidences of the distressing conditions through which the country has been passing, but these occurrences should be regarded not as indices to forward epnditions but as .relating to the past. For a long time the credit shortage has been apparent rather than real, and due in large part to the unsatisfactory character of some of the risks offered. There is now no bank credit available for operations designed to hold prices at fictitious levels. Orderly organised marketing, if fair, succeeds, but attempts to hold prices above the levels deters Qnined by international supply and demand are certain eventually to fail. Although occasional failure to secure desired credit accommodations has served to keep alive the impression that there is a shortage of bank credit, the truth is that there is now available, a volume of credit larger than present business requires. The main requisite for a return toward normal conditions is the will to try for business on a level Where it can be had.

Wholesale prices of many classes of manufactures have been fully deflated. This is not true in all lines, but recent cuts in the price of steel and widespread reductions in wages indicate that adjustment in wholesale prices will not be long delayed. Retail prices show wide irregularities, and high-cost stocks have been largely disposed of. Price stabilisation is, therefore, not far ahead. Steady betterment of the banking position which has been in progress during the current year gives full assurances against credit stringency when crop-financing requirements become effective. At this season last’ year, the bill holdings of the reserve banks exceeded 2,846,000,000 dollars. They nowtotal 1,729.000.000 dollars. During the same period, the reserves of the system against combined note and deposit liabilities have increased more than 25 per cent. Loans of reporting member banks are far below the level of a year ago. The banking system is in a splendid position to meet autumn requirements for credit, which will be much smaller in volume than last year because of lower prices.