Current Situation

The markets have acted very well under advancing money rates. Yet evidence accumulates that a turn in the trade cycle is at hand. For the first time in nine months, wholesale commodity prices have shown a general tendency to recede. In the basic industries, production is high and, while consumption is apparently good, a tendency to create heavy stocks and inventories is undoubtedly present. Easy money, by promising the wherewithal to carry these, is a factor facilitating the creation of a top-heavy business situation.

Undoubtedly, however, the spring trade should be generally satisfactory, and in some departments very good indeed. But what the autumn will bring forth is another question; and one largely dependent upon the crops of the coming year. So far, at least, the symptoms of an early spring are encouraging to staple crop farmers as a class.

The action of the Bank of England in raising its rediscount rate from 4% to 5% indicates the financial supremacy of the U. S., and foreshadows vigorous efforts of the British to challenge it in the near future by getting the pound sterling back on a gold basis this year. Probably the decision to take this step, momentous to trade recovery the world over, will be taken before summer.