Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1923-07-20

The slowing down of business,
which became noticeable in some lines
in April and was more pronounced in
May, has been the subject of absorb
ing, interest in June. Uncertainty as
to the extent of the reaction has in
creased. Doubt as to the staying
powers of our newly-found prosper
ity has spread. For this increased
degree Of unsettlement certain events
in and around the stock market seem
to be mainly responsible The mar
ket has been shaken by several fail
urcs, which were in no way signifi-
cant of general business conditions
but were of the sensational class of
news which gets general attention and
is always disturbing to confidence.
1t is evident that the country was
dis.rustful of the March boom, with
its wage and price advances, and has
been moving cautiously ever since.
Everybody with a memory three
years long recognized the danger of
sitting prosperity by rising costs and
prices. Caution was enjoined on all
sides.
The effect has been to put a def
mite check upon buying which has
been maintained long enough to raise
the question whether the country is
not lapsing back into depression.
Construction Work the Principal
Factor in Boom Times.
There is general agreement that
except in war times the most import
ant fluctuations in industry are in con-
struction work, either house-building
or the construction Of industrial equip
ment or durable structures of some
kind constituting lasting improve
ments. The variation in this class of
work is much greater than in the
production Of food-stuffs, wearing ap-
parel and other goods that are quick
y consumed. A large proportion of
the population is required on the
average over a period of years in the
industries that supply the new houses
and furnishings, industrial equipment
and public facilities Of all kinds needed
By our growing population and that
result from the changes In tastes and
customs IF this portion Of the popu-
lation- could be steadily employed
year in and year out our industrial
fluctuations would largely disappear,
hut this class of work does not have
to be done with regularity, and in
Fact there are great variations in it,
which affect general prosperity. When
construction work is in full swing. in
Gliding the industries that supply the
materials, we have full employment
and the highest state of prosperity.
When construction work falls off, not
CnIy is there unemployment in the
trades directly affected but loss Of
purchasing power in their members
th1t affects all the industries.
| All construction work involves an
investment Of capital which is only
released over a term of years, and if
uuwisely invested may be unremune-
rAtive for q long time and may be
lost. There Is a marked tendency to
uverdo construction from time to
time, making It necessary to wait for
demand to catch up with supply, and
these fluctuations have been the chief
factors IN our periods Of marked pros
perity and depression
| Crisis of 1920 and Revival Of 1922
Thu crisis and depression of 1920,
however, had different origin. It
was not brought about by an excess
of construction work. The great in
fntipn of prices was not dne to activ-
ity in building operations, but to &C.