Evening star., 1923-04-14
BY STUART p. WEST.
Special Dispatch to The Star.

Special Dispa tch to The Star.
NEW YORK. April 1.-THE finan-
cial community this week has passed
through varying phases of opinion
regarding the business outlook Those
who have been maintaining that the
peak of the expansion during the last
six months has been reached found
some encouragement for their view in
the cut in oil prices and in the state
ment by the Iron Trade Journals that
new buying had fallen off, partly be-
cause of the shortage of labor and
partly because consumers were filled
up on their requirements.
Later on the markets were inclined
to adopt a more favorable judgment.
Overproduction in the oil trade was,
of course admitted. 1t has been
known for a long time that the Cali
fornia wells were far outrunning local
demand and were shipping more and
more of their surplus to the Atlantic
seaboard. Competition has been in
creasing, with the normal result that
prices have been lowered.
No Steel OverprOductiOn.
But the oil trade represents unique
case. The position in other industries
including steel is quite different. True,
down to "a minimum during 1921 and
the first half of 1922. have now been
replenished. There is no need for buyers
to get panicky on the subject of future
supplies.
But while this condition applied to
steel and TO many other lines, 1t does
not indicate over production. The main
point to emphasize is that the only
thing which might bring about serious
check upon commercial buying Is a
f,,- Cd, in,
merchants and manufacturers perceiv-
ing this danger, are doing their utmost
to avert it.
Trade Expansion Nears Peak.
Undoubtedly it is a fact that trade
expansion since the first of the year has
gone as far as it is reasonably likely TO.
Steel mills unable to get their full
equipment of workmen. are extended to
their utmost when they are operating
at 81 to 93 per cent of capacity.
The wooden mills going over time.
the building trades breaking all rec
crGs for activity. the railroads carry
ing the largest volume of traffic ever
known at this time of the year-
these and many other indications
point to the forward wave having
approached pretty close to the crest
This, however is not to say by any
means that serious movement of
reaction is impending. There is no
resemblance to the conditions of three
years ago. when manufacturers ana
business men generally, seeing no
limit TO price lnhatlon. had over
stocked their shelves. All they have
done so far is to bring their stocks up
to normal. with moderate provision
for requirements during the next
three to six months. II prices keep
around the present level there Is no
reason to anticipate any important
falling off in demand: i'll other words,
the present satisfactory volume Of
business so far as now appears, is
likely to be maintained for some time
to come.
Higher Wages Cut Profits.
The main qualification upon optimis-
tic conclusions comes with the labor
problem. Already the 10 and 10 per
cent increa Sc in wage scales announced
ALI over the country during the last
few weeks bas cut heavily into the
profit margin Of industrial companies
as this was calculated up to month
ago This is not the worst, for it
will not be until the late summer and
autumn that the demand for laborlng
men will reach its height
Even now it is officially reported
that the labor supply in the agricul-
tural regions is 10 per cent below
necessity. What will this be when
the harvest season comes four months
from now? When farmers have to bid
against the high prices paid common
laborers at the manufacturing cehters
there Is likely to be an outcry and
the promoters of the restrictive i'm
migrate laws. il is easy to see, will
be the object against which public
censure will be directed.
Reduction in Reserve Rediscounts.
The most important incident of the
week was the further reduction of
s4o,OOo.O00 in federal reserve redis-
counts This following the decrease
of previous weeks was Interpreted
to mean that there was no likeli-