Evening star., 1923-12-31

tivity for the rise has continued
throughout the balance of the year,
with railroad stocks and bonds
competing with industrials for mar
ket leadership. This latter develop
ment was based not simply on the i'm
proved financial position of the car
riers. for that, had been evident for
months, but rather upon confidence
that the administration at Washing
ton would insist upon fair treatment
for railroads and that threats of rad
ical action in Congress would never
get beyond the stage of talk. This, in
brief, is the summary of year of
unusual interest.
Decline Went Too Far.
Looking back over the year, it is
hard to see justification in the course
of business and trade for the extreme
fluctuations in securities. Doubtless
the advance early in the year went
farther than the commercial situation
warranted. but it seems equally sure
that the subsequent decline was car
ried too far as well.
The reasons assigned for the specu-
lative pessimism of the midyear are
varied. They include advancing labor
costs, which 1T was argued manufac-
turers could not pass on to consumers
in higher prices for finished goods,
and SO must necessarily result in
smaller profit margins. Predictions
of buyers strike similar to that of
two years ago were freely made. In
April the Steel Corporation announced
a higher wage scale for its employees.
Later in the year the, twelve-hour
day was abolished In the steel indus
try and eight hours made the basis.
This, il was held, could not but af-
feet adversely net income in the steel
trade In the textile industry also
much ado was made over high labor
costs, but the chief struggle came in
the building trade end. For time
construction work was halted and
financial institutions which make
business of loaning money for new
projects withdrew from the market.
But all this was temporary. and as
the year ended the general wage
level remained around the high point
and the menace, IL 1t was menace,
to general industrial prosperity from
this source was forgotten.
Low Farm Prices.
Second to the matter of wages as
an adverse factor, SPECTATORS put
great emphasis on the prevailing low
ably wheat 1t was repeatedly point
ed out that the price of wheat was
fixed in the world markets and that
our farmers would have to take for
their surplus what the world was
willing to pay. in year when supply
was running ahead of demand. AS
far as it went this point was we'll
taken. The farm price of wheat con-
tinued below the cost of production
up to the end of the year and the IA
vorite diversion of politicians and of
agricultural economists was the de.
yising of a remedy. Various schemes,
including price fixing the taking over
of the surplus by the government and
limiting future production were pro-
posed That the exclusively wheat
farmer has had q bad year is not
open to argument. His misfortune
has been reflected more or less in the
earnings of. the northwestern rail-
roads.
There are two considerations to be
kept in mind, however. The first is
that while the price of wheat Is. in
deed low, it has displayed remark
able resisting power in the face of
the statistical position. Part of this
may be due to the expectation that
some one of these relief plans al
ready referred to will be put in oper-
alton and part may be due to the
attracted to a commodity selling
below the cost of production The
other point which is vital in this
connection is the small proportion of
pendent entirely upon wheat. There
has been no depression in corn and
cotton has scared to sensational
heights. Examination of the sales
statistics of the mail order houses Tor
the year shows that the alleged loss
of buying power in the agricultural
section has been greatly overestf-
mated as a factor bearing upon the
country's economic position.
Excess Oil Supply.
Over production in the oil industry
was another condition which intensi-
fed the pessimism of the midyear.
The facts about the excess supply of
oil are too well known to require
discussion here. Suffice it to say that
for time concern was freely ex-
pressed as to the solvency of some of
the smaller and weaker oil producers.
At the close of the year. however.
production has been falling off and
the crisis appears to have passed. Oil
stocks have begun to regain favor
and as, is generally the case the
stronger companies appear to be bet
ter intrenched than ever.
Looking at the whole episode calmy
in retrospect over production of oil,
or under production either for that
matter. was never a barometer of the