The Richmond Virginian. (Richmond, Va.) 1910-1920, 1919-03-10

in many cases also by direct price
axiag. The same was true OF the
wages OF labor. The power of the gov
ernment was exercised toward the low
erirg of prices of materials and the
wages of labor in non-war industries
in order TO prevent labor and mate
rial from being drawn away from the
war industries.
This brief sketch OF the govern
mcnts policy in stimulating war pro
duction and curtailing non-war pro-
duction explains the difference be-
, tween the cost OF labor and OF ma
81 's.,,s !, Y, '' a5ss = e 8
genera which WAS ,S@,sad to exist At
the close of the war.
At the close of the war the index
number OF building materials. not in
Guiding steel. had risen only 81 per
cent over the pre-war price of 1918.
while the index number for commodi-
ties. exclusive Of building materials,
had risen 113 per cent. The average
increase OF wages in the construct ion
Industry in forty-one leading cities
from 1914-1918 was only 28.5 per
~r"i.st a rise of "a per cent
in commodities. When the arm istice
came, there was, OF course. a great
volume of deferred construction pro-
jects, partly in the form of public
works, partly in the form OF semi
public utilities. partly in the form Of
housing and of commercial and indus
trial buildings. This volume of de-
ferred construction represented IN
large part the curtaiIment Of non-war
production which had resulted from
the diversion of one-third of the ma
lions industrial capacity to war pro-
duction.
Fortunately the return of peace did
not mean the complete, abrupt end
of war production yet it threatened
serious unemployment. In order to
minimize unemployment during the
period OF economic reeditlstment the
government promptly removed the re-
strictions which It had imposed upon
the construction industry. There is
ono indirect restriction, however
which it has not removed and could
not remove. that is the moral obliga-
I ton of the financial community TO
/ conserve credit until the Victory loan
is floated Each bank, trust company.
insurance company. etc, must esti-
mate how large a part OF its prospec-
tive allotment Of the Victory bonds II
/ can sell promptly, and consequently
how much of It's funds Il can afford
I ~ SEp~ dS US i0E TSdi tStHAt EOdIS OF
other purposes The proportion SC
set aside for real estate loans will de-
pend largely on the element OF optin-
1 ism which enters into every Judgment
concerning the future. There prob
ably never was n time when broad ly
speaking optimism as regards industry
was better justified or meant more t.
! ire country than at present. II is dis
tinctiy encouraging 10 the oonstruc-
- n a., H..
reasoned optimism---is most emphatic
in the literature published by the lead
Ing banks Of national reputation. COM
piled for them by trained investigH
I tors
/ Evidence of helpful attitude on the
I part OF banks towards real estate Is
not wanting In the great borough OF
Manhattan. in New York city. mort
cages aggregating $500. 900 in value
were extended frenewedl in January
OF this year, as against s2,s00.o6o ir
/ January of last year. That is to say
j. the banks and insurance companies
are not now. as they were year age
calling upon real estate borrowers te
pay off loans in whole or in part
/ FGrthern ro ~ 501 building permits
were issued In l52 cities this January
aa against $500 permits a year ago
The average value of the January per.
/ fAitF &fifS year WbS 81 tuNs EOIIpATNt
with s2,So0 In January, 1918. A yea
ago, II Will be remembered, the gov
eminent was building extensively and
besides many factories were beins
erected for war production. Fifty-foul
per cent of the cities showed gains II
/ building thts January over the pre-.
&c ling January. It is TO be noted also
that January. 1919. gained over De.
cember. 1919, although building per.
mlts are normally fewer In January
i than in December. The significance oil
these building figures Is that there Is
a tendency to build extensions. &c
make structural repairs. and to erect
inexpensive buildings. including par
+ ticularly housing. The figures bear the
characteristics one looks for at the be.
ginning of revival Of the building
! industry.
I It takes time for private building ia
get under way and still longer 70,
Public works TO get started in volume
However the reports received from
state, county and municipal officials
Justify the belief that an exceptional
lamont of public construction will he
undertaken this year
The turning of the tide In the con-
struction industry thar we have all
been locking for since the armistice has
unauestionabiy come, However, there
are still obstacles in the way OF its
/ rise to normal. The most important
Of these Is the high cost Of construc-
ton as compared with the pre-war
period. Not few bankers and inves-
tors decline to consider 4 building nro-
fect today merely because OF the high
cost OF living. Those who take tNes
attitude do not generally stop to ana
lvze the high cost OF construction
which alarms them so.
Although construction costs are high .
err now than In 1919. the union wage
scales in the building industry have
not advanced a. rapidly as have the
cost OF living. while building material
prices are not as high as are COM
modify prices. Wages increased in the
construction industry. speaking gen.
orally. Jagged behind because that In
dustry was utilized to only a small de-
gree in war production. The level NJ
which the cost OF construction stands
today has been pushed up only slightly
by temporary war conditions. II has
been fxed mainly by conditions that
cannot be materially changed for years
to comedy 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 COM
merce: hence prices rose. But expan-