Pine Bluff daily graphic., 1919-03-18

1 aside for real estate loans or other | purposes. The proportion so set
 aside for real estate loans will depend
 largely on the element of optimism
 which enters into every judgment con ! corning the future. There probably
 never was time when broadly speak ing optimism as regards industry wa. l better justified or meant more to the country than at present. It is dis ] tnctly encouraging to the construc- ! tion industry to note that optimism 1 reasoned Optimism-is most emphatic | Sn the literature published by the
 leading banks of national reputation, compiled for them by trained envest-
 gation.
 l Evidence of helpful attitude on the part of banks toward real estate not i kantng. In tie great borough of Manhattan, n New York City, mort gages aseregating $S,5000,000 in the value were extended (renewed) in January of this year. as against S2,- S00.000 in January of last year. That is to say, the banks and insurance companies are not now, as they were a year ago, calling upon real estate
 Ool ON Cl D CO Dsy OiI OulIo III WHOIC OI in part.
 Many Permits Issued
 Furthermore, 13,5000 buolding per- mits were isued in 152 cities this Jan uary as against $500 permits a year ago. The average value of the Jan uary permits this year was $1,700, compared with $2,300 in January, 1918. A year ago, it will be rememb cred, the government was building extensively, and, besides many factor ies were being erected for war pro- duction. Fifty-four per cent of the cities showed gains in building this January over the preceding January. It is to be noted also that January, 1919. gained over December, 1918, al- though building permits arenormally fewer in January than in December. The signfcansa of these building fig ures is that a tendency to build ex- tensions, to make structural repairs, and to erect inexpensive buildings, including particularly housing. The figures bear the characteristics one looks for at the beginning of revival of the building industry.
 It takes time for private building to get under way, and still longer for public works to get started in vol ume. However, the reports receiv- cd from State, county and municipal officials justify the belief that an ex- ceptionM amount of public construc- ton will be undertaken this year.
 The turning tide in the construc- tion industry that we have all been looking for since the armistice has urquestionabl ycome. However, there are still obstacles in the way of it's rise to normal. The most im- portant of these is the high cost of construction as compared with the pre-war period Not a few bankers and investors decline to consider a building project today merely be- cause of the high cost of construc- tion. Those who take this attitude do not generally stop to analyze the high cost of construction which alarms them so.
 Although construction costs are higher now than in 1913, the union wage scales in the building indus try have not advanced as rapidly as have the cost of living, while build ing material prices are not as high as are commodity prices. Wages in- crease in the construction industry, speaking generally, Jagged behind be- cause that industry was utilized to only a small degree in war produc- tion. The level at which the cost of construction stands today has been pushed up only slightly by temporary war conditions. It has been fixed mainly by conditions that can not be materially changed for years to come
 by the tremendous expansion of money and credit.
 During the war the volume of money and credit increased far more rapidly than the volume of industry and commerce.; hence prices rose But expansion of credit through Gov ernment loans is a worldwide con- dition which musthold up prices ev- anywhere until the Government debts are largely discharged.
 The fact is that the cost of con- struction is not high today. It is low compared with food, clothing and commodities in general. It is high on- ly in comparison with it's own pre- war level. Commodity prices will un- Goubtly recede because food and clothing and many other things were affected bv special war conditions, for example, scarcity of tansporta- tion which prevented shipments, from distant, countries to the allies. But they can not fall to the pjre- war level.
 But. although some readjustments in the wages of industrial trades and ir the prices of individual classes of building materials may take place, the cost of construction will not some down to such an extent as to endager a judicious investment made today in the erection of new building. Where the rents offered will show a ] fair net return on the cost today of a new building after deducting a | reasonable sinkine fund allowance, nc one should hesitate to build or to lend money for building.