Evening star. [volume] (Washington, D.C.) 1854-1972, 1920-08-21
PRICES
F0RBU|LD|NG SEEN;
CAUSES ARE CITED
Present Reductions Indicate
Premium-Baiting for
Next Year.
Price reductions in building mate

Price reductions in building mate
rials apparent at the close of this
week, when there is absolutely no
change in the supply of materials at
manufacturing points, can have only
one effect-the skyrocketinG of prices.
delays in delivery, batting
and snowballing of wages next year.
declares the analysis of the Dow
service daily building reports.
The view taken by this authority
follows:
1.-THE real perspective of the latest
turn of events in the leading distrib-
uting markets can be viewed from
the two extremes of the industry,
namely, the source of supply and the
ultimate consumer. The present sag
| is in the mean that lies between
those two extremes, namely, in the
ments. Being palpably a temporary
slump, the ultimate effect upon the
building situation is all the more
harmful.
New and second hand brick. wood
! lath, shingles and certain kinds of
! flooring represent the weakest sec
| tions in the price situation So far.
! but there are other departments that
are likely to feel the effect of the
waning market by reflection in price
pruning. a t least for desirabl bust
ness.
Fall UT CurtailS Demands.
Expressed tersely, the falling off
of new construction work has cur
tailed demand. Dealers unlike those
in other lines of commerce, are with
out stocks. Their storage sheds are
literally bare. Deliveries are made
to jobs direct from incoming cars and
lighters and ships. The goods seldom
|apss through the distributors yards.
But the dealers have not been able
ny n a q
turers on orders placed a quarter to
"a half year ago. and to make sure of
adequate supply when the building
movement finally gets under way they
are ordering far in excess of their
normal requirements. mostly without
cancellation privilege.
IF the present tendency toward
weakened market for basic materials
and 4ower prices result from compul-
sorry price cuts by holders who have
desire to dispose OF excess products
in an attempt to force a market for
commodities or to stimulate building
at time when conditions are SO ad-
verse to construction work of all
kinds it will not fill up dealers yards
when railroad embargoes continue to
be declared. as in the case of some
of the railroads terminating in New
Jersey today, when lighterage is de-
fered, necessitating expensive truck
ing. any faster than the yards have
been able to fill up.
Sees Plants Shut Down.
General price cutting as tenn
porary expedient will have the i'm
| mediate effect of closing down manu-
featuring plants. Under the exist
| ing credit curtailment the mills are
being financed out of their own re-
| sources or from current sales. Let
| the sales stop and the mills will i'm
mediately cut off the operating over
heads. make deliveries on back orders
and await more stable market be-
fore resuming.
Under such a condition, the build
| ing market of next year will be once
more undersupplied with materials,
| just as exactly as it is now under
supplied, and with construction work
on clearer path as far as finance
| and legislation are concerned, the
present ragged condition of the build
! ing material price levels will be much
| more aggravated. Exhibits are at
hand to show that this situation is
lalready being nodded,