The Current Situation

The downward swing of prices on the Stock Exchange, in addition to the decreased production of pig iron and the unfilled orders of the U. S.

Steel Corporation, have discouraged the blind optimists and Pollyannas of business, without materially changing the opinion of less one-sided observers. The business outlook holds no great terrors for industry or commerce, but its temporarily downward tendency should neither be blinked at or explained away.

In the ordinary business cycle, it is the raw material manufacturers that first feel an oncoming decline in prosperity, next the manufacturers of finished goods, then the wholesale and retail merchants, finally the consuming public and its landlords. Thus far the first-named class has been acquainted with declining activity; now the manufacturers of finished goods are about to feel it; next Spring, if not before, the mercantile world should be reached by it.

Big depressions, however, have always followed big "booms," while little depressions have come in the wake of short and spasmodic periods of prosperity. The near-boom of 1922-23 therefore seems destined to be followed by a near-depression in 1923-24. But our banking position is impregnably strong, Europe is recovering, prices long out of line are being gradually readjusted. Business must take its medicine next year, in all probability, but it will not be anything like as bitter a dose as was swallowed in 1920-21.