The Washington herald., 1921-10-30
WARNS BUILDERS
OF UPWARD TURN
IN BUILDING COSTS
Former Government Off
cial Holds Construction
AT Present Is Prudent.
INTRICATE FACTORS
Thinks Business Conditions
Are Impr6ying Throughout
The Country.

Is IL prudent for the average
American family to 60 ahead and
build nowr'
more Intimate Importance for the
family OF limited means consider
ing the advisabflity of constructing
The Affirmative answer to the
question Is given by Franklin T.
Miller, vice president of the Ma
tional Federation of Construction
Industries. and formerly chief OF
the Bureau of Public Works and
Construction Developments of the
United States Department Of Labor.
1t seems that the time Is APP
preaching, IL II is not already at
I maud, when people would be war
ranted In going ahead with build
ing material prices have reached
approximately the same level as
general commodity prices and be-
cause a reaction upward Is likely
TO develop" he says. That this
reaction Is likely Is suggested by
the advances In Southern pine and
Douglas ar timber quotations re-
Gently and the tendency of the
steel market to strengthen a lit
tie"
Had Advised Delay.
When the recession from the
high price peak had set in and
many were urging construction
work and home building. Mr.. Miller.
speaking before the National Hous-
Ing Conference OF the Chamber of
Commerce. said that the small
home-builder could AFFORD to wait
because prices would go much low
er. He was in position to know
national conditions at that time,
being then engaged as an assistant
to the Senate committee, which I'M
der Chairman Calder, was conduct
Ing a nationwide investigation.
There are many factors, and
some OF them are very intricate.
which must be kept in mind IL one
Is to approach a sound conclusion
on whether or not il now is safe
for a man of moderate means to
undertake home building" he con-
tinues. Without confusing rather
than clarifying the discussion, four
rof these factors ought to be empha-
sized because a man should know
before he, decides not to build just
what the decision will cost him
Cites Four Factors.
These four important factors
(2) the present and future pur-
chasing power of the dollar, (3)
the future trend of prices, and 90
the effect of European conditions
Rents are high. They will con-
tinue above the pre-war level for
several years because the entire
country is short on housing facili-
ties and IL will take several years
TO make up the deficit.
The purchasing power of money
n below the pre-war standard and
Il wilLimprove only as we re-estab-
, Iish the pre-war ratio between
money and credits, on one hand,
and goods, on the other.
The general trend of prices Tor
many years will be downward with
periodical reactions and, in large
measure, the rapidity of the decline
will depend, from now on, on how
completely we approximate capac-
Ity and continuous production. Now
have in mind the fact that when
we use the full capacity of our
productive facilities continuously
we turn out vastly more than we
can consume in the United States
md II becoSes rather clear that
European conditions must improve
absorb our surplus before the price
Isvel in the United States will re-
uect the economies and lower pro-
iucing costs possibly only where
NE make tie maximum use of our
! produsing facilities.
Price Drop Checked.
How long will II take Europe to
restore her purchasing power to
where Il was prior to 1914? Ny an
twer Is: Longer than / expect to
live. and yet every reputable au-
Ehority on economies Is agreed that
his purchasing power and a re-
Tumption of normal business rela-
Hons with Europe are conditions
precedent to the lowest possible
price level in this country.
For a long time II has been ex-
,ected that there would be a halt to
he downward reaction in prices,
m dthis now has occurred.
Building materials. including
Tteel, have fallen to 1855, notwith-
Ttanding the extra burden Of freight
rates which they carry and will
continue TO carry for sometime.
Il have been talking in terms of
wholesale prices which finally are