Evening star. [volume] (Washington, D.C.) 1854-1972, 1923-08-04
Financial Outlook Unchanged
? By Nations Very Great Loss
Continuance of Harding Policies by Ne'O
President Viii Giue Wall Street No
Chance for NeU Fears Ouer Future.

other crops in which there is less
rivalry and better opportunity for
profit.
other Crops Besides Wheat.
The way Wall street has been dis
GUESSING the wheat situation and its
bearing upon the future buying power
of the agricultural states one might
suppose that wheat was the only crop
to be considered. AS it is the wheat
harvest represents less than Z per cent
of the total output of the farms. The
Agriculture Department estimated a
month ago, taking prices as they stood
on July l, that the total value OF all
the crops this year would exceed by
81 600. 900. 900 that of 1922 and by So
900, 000. 900 that of 1921. This. after
all. is the main criterion for judging
the farmers capacity to buy.
No Basis for Wage Increnses.
There is no question about wages be-
ing abnormally high in various INES.
The main contention of those VINO LOOK
at the future pesslInisticaliy is .nat
labor costs cannot be brought down
without a period of depression. Against
this is the fact that conditions are quite
different from those of three years ago,
when we had the vicious cycle OF con-
slant initiation in commodity prices
produing constantly increasing demands
on the part of labor for higher pay.
The average price level at the close OF
July was s per cent below the peak in
April. 1t was back pretty we'll to where
it stood a year ago. This means that
the agitation for higher wages no long
er has the excuse of rising costs OF liv-
ing, and consequently can no longer be
conducted with success.
If the country has reached. as is rea-
sonable to suppose, the limit of wage
increases, the question then becomes
whether manufacturers and merchants
can maintain scale of prices that will
not discourage buyers and yet leave an
adequate profit margin.
Test In Wooden Industry.
This is to be tested, in the wooden in
dustry. where. to match last springs
wage advance. quotations on next
springs line of goods have been raised
IL per cent. 1t is to be tested in the
steel trade when. changing over from
the twelve to the eight hour working
day, the companies will endeavor to
pass the extra cost over to the con-
SumerS
The outcome can not be judged
ahead of time. All that we know
now is that with the exception of
pig iron. oil and certain branches of
the leather trade, buyers have not
stood off for price concessions. They
again, not in any large way, but still
sufficient to indicate a distinct up
ward turn as compared with a fort
night ago
Railroad Outlook Unsettled.
The railroads. have a problem of
their own which does not belong to
other enterprises They are not free
to raise the price of transportation to
meet increase in costs On the con-
trary, it is altogether probable that
the demand for a reduction in agri-
cultural freight rates will prove in
the next congress To" strong to resist.
Wall street has evidently been look
ing ahead to this possibility in its
treatment of the stocks of roads
which, even under present conditions,
are either not covering fixed charges
or. in cases where dividends are being
paid, are earning but slight margin in
excess"
In these instances any lowering of
freight rates would spell receivership
for some and the passing of dividends
for others, unless the Supreme Court
stepped in and decided. regardless of
the pressure from the farmer ele-
ment. that railroads must be allowed
to charge enough to bring them in a
reasonable return on their invest
ment. II is this which the railroads
are relying upon to happen.
Copyright 1872