New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1919-07-20

OF production, some points occasionally
brought forward as a basis for a pre-
diction of decrease in price. and
hence in cost Of construction. were
omitted. These will now be briefly
considered
In some quarters decrease in
freight rates is expected to decrease
the cost Of construction. The answer
to this is that the transportation in
dustry can be considered as included
IN the analysis Of cost of production
made above. AS long as the cost of
transportation, including wages, ma
terlals and taxes, does not decrease.
tnere cannot reasonably be expected a
OF transportation there have been dur
ing the war no abnormal profits. but.
on the contrary, deficits. The onlv
nope for decreasing the cost of trans
portatlon is increasing efficiency, and
tnls cannot be expected to result in
an early reduction in freight rates.
conditions Following Civil War Not
Analogous
Many persons point to the fall IN
prices after the Civil War as an ]ndi.
cation of falling prices after this war.
but the conditions are not the condi,
lions following the Civil War. and one
cannot reason by analogy when there
IS no analogy. Prices in the United
States in 1865 were high by reason
OF our own Civil War. Prices are
nigh IN the United States at the pres-
ent time as result of European con-
dltlons reflected in the United States.
AS a general rule economic disturb
ances and changes are the more
permanent in proportion as they are
more widespread. Hence, naturally. we
cannot expect as rapid reimbursement
OF prices after the world war as came
ABOUT after our Civil War.
Since it is not ten months since the
arm1stlce was signed, we have already
considerable period for which we NAV
compare the course of prices with a
similar period in the Civil War time.
Let US note the actual price movement
during the four months after the sur
render of the Confederate armies was
certainty and the movement of prices
a1ter Germanys surrender was fore
seen During the four months from
January to April 80, 1865, the index
NUMBER OF wholesale prices declined
from from ZIG to 100, drop Of IL per cent
During the four months from Novem-
Der l, 1918, to March /, 1919, prices in
the United States declined only SO per
cent, according to Dun's Index Number.
During March prices reacted so that
the index figure for April 1, 1919. is
only 40 per cent under that Of Novem-
Der /, 1918.
We cannot expect in the near future
lower prices in the United States as
result Of lower prices in other coun
tries, since our prices are low in COM
parlson with European prices. They
are almost the lowest in the world. In
stead OF needing to fear an influx of
cheap. goods from abroad because of
our high price level and consequent
fail IN price, we can in all reason ex-
pect period of heavy expectation be-
level.
Present Construction Costs Compare
lively Low
what, then, are we to saw concern
ing the construction industry as af
fccted by possible fall in prices? AS
our analysis above indicated, the only
reason for expecting a general fall in
prices is the disappearance of abnor-
NAL and excessive profits of certain
industries benefited by the war. AS al
ready pointed out, it cannot be expect
ed that such fall in prices will be
very pronounced. II prices in general,
and hence costs of production in gen
eral, do not fall materially, it is not to
be expected that costs of building con-
struction can fall materially. since
these costs are at present compare
lively low.
1t IL to bs remembered that tho con-