Current Outlook

While production is marking time, belief grows that the safest clue as to future business conditions is to be found in the money market. January is usually a month of "easier money" and this year proves no exception. Funds released from the heavy borrowings for the holiday trade and year- end settlements are seeking investment. Money rates have been somewhat weak and symptoms of a rise in bond prices --a good sign of lowering interest rates --have been apparent. Still the stream of gold imports flows into our Federal Reserve banking system, whose ratios are at record levels.

It is not to be expected that merely easy money can bring about industrial recovery, nor that a heedless money inflation will occur this year. The grip of the bankers on the money market during the threatened runaway inflationary market of March, 1923, proves that much. Yet as the months pass, conditions in the basic industries improve.

Unless "stabilizing methods" had been employed, varying from the picturesque operations and announcements of Mr. Livermore (TIME, Nov. 12) to the steel extra dividend (TIME, Nov. 12) and kindred occurrences, business would probably have deteriorated until this Spring, have been dull all Summer and started up in the Fall. The Presidential election, despite assertions to the contrary, would have small influence on this. Owing to "stabilization," conditions are superficially better than we would expect at this time, but practically worse, since a real housecleaning in our business structure was needed. The stabilizing efforts of bankers and corporation directors have succeeded, but they represent only brilliant opportunism. They may help elect Coolidge, but they won't make his term particularly happy.