The Washington herald., 1922-05-14
.AVAILABLECAPITAL
CAUSE OF BUILDING
REORGANIZATION
Reduction in Freight.
Rates on Manufactured
Products Needed.

NEW YORK. May 13.--After four
weeks OF continuous heavy trading.
where sales have been more than a
million shares. q day. most Of the
time more than a million and
half and once more than two mil
lion, there must in the nature Of
things. be a reaetion from the
technical standpoint. Within the
past week that tendency has been
manifest. but II speaks well for
the market that such declines as
have occurred have been orderly
and. in fact, have been sharply
contested. The undertone is still
stronk. business improvement In
still going forward and the reac-
tion in stocks Is merely the desire
TO turn paper profits into cash.
II does not follow that the up
END. That would imply an altera-
tion In Fundamental conditions, and
there has been none.
Within the last three months the
recovery In business has been all
that could be asked for. II was
not to be expected that business
could snap back into position as
quickly as 1t dropped. As q matter
of fact II Is further advanced than
was anticipated at the beginning
of the year.
building Boom.
The building boom is In a large
measure responsible. but that, In
turn. was made possible by the
availability Of capital. Halted de-
mand for food and clothing cannot
be made up. but deferred construc-
ton work has to be taken in hand
sooner or later. .s
Bearing in mind that the normal
additions to housing facilities werb
not made during the war period.
but that the need for them has
gone on just the same. IL has
meant that at the first opportunity
this need would be supplied. The
high rates for money have been one
of the principal deterrents. as we'll
as the high costs of building ma
terials. While there has been some
decline in the latter, IL was not
the controlling factor so much as
the ability to finance.
Liquidation of frozen loans
throughout the iountry is progress
ing fairly well. This is reflected in
the decline in the redfscounts Of
the Federal Reserve system of s52,-
100000 for the week. The total
redisoounts outstanding at this
time amount to $500, 900. which
Is the smallest since October, 1917.
and compares with s1.I7s,o00. 900 at
the beginning of the year and 81.
063.000.0o0 q year ago.
statements of railway earnings
for the month OF March, now COM
ing forward. reflect the improve
ment in Industrial conditions in
increased revenues from freight,
but emphasize the necessity for .
decrease in passenger rates, the
revenue from that source having
fallen off materially. A point worth
noting is that increases In net
revenues are in considerable meas
ure due to deferred maintenance,
but IT il also of Importance that
considerable saving is shown in
greater efficiency of operation.
Further reductions in freight rates
are likely to be ordered by the
Interstate Commerce Commission
shortly. These will probably affect
coal. coke and iron ore. iron in
cruder shapes and building ma
terial. such as brick, stone and
structural steel.
reductions in freight rates on
manufactured products + are also
needed. but these cannot be OBJ
taned all at once, for It would be
placing the burden entirely upon
the railways, whereas the roads
themselves are entitled to some
consideration in the matter of pro-
duction costs. This brings up the
question of the coal strike ana
the necessity for some basis of
settlement that will bring lower
prices for the consumer, of which
the transportation system of the
country is the largest. Cheaper
fuel costs will affect the costs of
all material and supplies the rail-
roads need. and make it possible