The Washington herald., 1921-03-13

There is little nkeithood or
boom in building construction this
spring. according to John Whyte.
Pm. D., director Of research, Ma
tionaI Association of Credit Men.
who has Just completed an exten-
sive study of the present situation
and the future outlook. There will
probably be a gradual resumption
of building activity in the spring
that will mount slowly month by
month until, by the late summer, II
may reach substantial levels. and
possibly by the advent of some for
tuitous circumstance may by fall
take on the aspect of great actiV-
ity.
DR.. whyte says: Business men
and economists who are predicting
revival Of business activity this
spring look hopefully to the con-
struction industry. They point out
the familiar facts that the country
Is under-housed. under-equipped; in
short. 'under-constructed.' They
cite with conviction the familiar
words. There Is a shortage Of a
million homes in the United States
They have facts and figures to show
that there Is a shortage Of railway
cars, of railway power-even q
shortage of railway mileage. They
conclude. from these thoroughly
demonstrable facts. that here is a
tremendous demand that must soon
be met, and they look for the open
ing of the building season. which
usually takes place in April to May,
to start q building revival of large
. proportions, and thus to give i'm
petus to a revival of business ac-
tivity along general lines.
There exists, Of course. no doubt
as to the great shortage OF housing.
There Is no doubt. likewise, as to
the existence of q shortage of in
dustrial equipment that extends to
almost all lines. but the mere ex-
istence Of q shortage does not point
to an actual and Immediate demand.
There is a strange fiexibility to So
called demand Take, for example,
the shortage of q million houses.
and assume that each house will
shelter four persons.
People Not Homeless.
The obvious conclusion is that
there are four million people who
are seeking homes. But these four
million people are not now homeless
they are all tucked away some
where. They may be potential buy
ers and builders of homes. but to
make them home builders or own
ers. something more Is needed than
the consciousness on the part Of
the community that they ought to
have homes of their own.
The statistics of contracts
awarded for December and January
show only too plainly how the de-
preston has affected the building
industry. In January, 1921. the F.
w. Dodge Company reported s111.-
sO6.s00 in contracts awarded, as
against s22s.1Is,0oo for January,
1870. The figures for 1921 repre-
sent a smaller volume than the ng-
ures for any of the last fve years,
with the exception Of January. 1918
(the second month after the armis-
ttce). There Is not much encour-
agement to be CLEANED from these
ngures. 1t must. Of course, be en-
phasized that January figures are
not in themselves prophetic of the
May or June or July figures.
More amenable to attempts at
forecasting than the figures of con-
tracts awarded Is the relative price
of commodities in the building in
dustry. What is the situation hereH
The general index number for all
commodities bureau Of Labor Sta
tistics) for the month of December
was 1s. The index number of build
ing materials was 2s6. In an ex-
change of commodity for commod-
fty. fewer building materials can be
bought by other materials than is
normally the case. The index num-
Der for all commodities emphasizes
in detail the disparity between the
price of construction materials and
the price OF other commodities
with farm products at a price level
of IA. the farmer can hardly be
expected to purchase in anything
like his former quantities. With
building materials at a price level
of 266 and household furnishing
goods at a still higher level of 3I6,
the liquidated factors in the eco
nomic community, whether they be
farmer, laborer or merchant. can
exchange their commodities for con-
struction commodities only at a
considerable disadvantage. The
high price of construction materials
is one Of the most discouraging fac
tors in the construction industry.
Constructioa Costs In 1921.
"A large item in construction is
always labor cost. The wages for
building trades labor for 1921 are
now under discussion. There Is
likely to be a general reduction in
the wages Of building trades labor.
Even though the union wage scale
of 1920 may be in force in some
commodities in 1921. II Is more like
g. ~. -.
than il was in 1920. The union wage
scale IL the minimum wage scale,
and in some years may be paid to
only a few workers; the other
workers. through competition for
labor or other factors. receive a
higher scale. One factor that will
reduce construction costs in a
marked degree in 1891 will be the
increased efficiency of labor. Build
ing trades labor in 1890 was noto-
riously inefficient. With great un-
employment in the present depres-
sion. the efficiency of building trades
labor Is sure to be increased per-
ceptibly. One superintendent of the
r T.eLey Construction Company Is
an average of 1 400 bricks
laid per man, as against 400 last
wear. Such an increase is, to be
sure. unusual and far above the
average. but IL is at least indica-
tive Of the trend OF labor efficiency.
Saving continues during a Pc
rtod of depression. The savings at
frst. during the early part of the
depression. do not usually go into
fresh investments in construction:
they are likely to be employed to
buy up business enterprises that are
on the bargain counter. But the